Unilever's Sustainable Living Plan is the firm’s blueprint for sustainability. “Easy to communicate internally and externally and audacious enough for stakeholders to notice”, it has seen the company win environmental awards, and grow its sales and market share.
Writing for MIT Sloan Management Review, trainer and consultant CB Bhattacharya, and Unilever's CEO Paul Polman identify six ways your firm can embrace sustainability too.
SEE PROFIT DIFFERENTLY
Sustainability is about creating value for people and the planet, as well as shareholders. It calls on firms to change their approach to making money. Rather than pursuing profit as the end goal, ask yourself where the world is going and what your organisation’s role in it will be.
Unilever realised there was a growing need for health and hygiene products in emerging markets. These are also the places most affected by environmental issues like habitat loss, water shortages and poor sanitation. There would be implications for product design and pricing, the security of supply chains, and manufacture and distribution. Also, the ease of communication between different stakeholders would challenge the firm to manage reputational risk by improving transparency.
Unilever reached out to all stakeholders including NGOs, customers, shareholders, suppliers, regulators, and rivals, and tried to balance competing interests and priorities in a way that maximises value for all, creating profit as a by-product. The result was its Sustainable Living Plan, a blueprint for corporate sustainability that was to change the way the firm operated, at every level, from within.
GO BEYOND YOUR BORDERS
What your firm does has environmental and social impacts which extend well beyond the boundaries of the organisation. To embrace sustainability in a meaningful way means interrogating the entirety of the value chain – the “full range of activities that are required to bring a product or service from conception… to delivery to consumers, and final disposal”.
When Unilever measured the environmental impact of its products across all its brands, looking at water use, packaging, waste, and carbon dioxide emissions, the company discovered that consumers were using too much product and disposing of packaging inappropriately. Both problems offered opportunities for the firm to cut its environmental footprint and focus resources to boost profits.
GET THE BOARD ON BOARD
Recent research showed that only a fifth of managers think their boards take a lead on corporate sustainability, and just 2% of boards have a senior executive whose brief is sustainability. A shortage of expertise at board level makes it impossible for firms to make the switch to a sustainable corporate strategy model.
When Unilever first came up with its Sustainable Living Plan, it had to work hard to persuade several senior board members of its validity. Now the board benefits from regular engagement with an external “sustainability advisory committee” which keeps members informed about how the company’s sustainability policy is working and what it’s delivering.
Key to getting your board’s support for your own sustainable blueprint is getting members to realise that sustainability is all about swapping short-term profits for long-term shareholder value.
CAPTURE HEARTS AND MINDS
Often, it’s the senior execs and the young intake who “get” sustainability, but to make your sustainability blueprint work, you need to get everyone on board. Sometimes, the problem is “fear of the unknown”, sometimes it’s the economic argument.
To break down barriers to engagement, empower staff by giving them authority to make changes, by talking money rather than higher objectives, and by providing sufficient training. Set targets and hold people accountable for them, but focus on the low hanging fruit first, and don’t expect too much change at once – momentum builds organically once managers and staff see the benefits of the strategy.
Unilever promotes its strategy through the appointment of Sustainable Living Plan ambassadors – staff who talk to other staff about the positives of the strategy.
AMEND JOB SPECS
Your board, managers and employees may buy into sustainability as a lofty ideal, but unless you make it an integral part of everyone’s job, it never makes the transition from concept to reality.
At Unilever, senior executives set the targets but leave it up to departments to decide how to achieve them:
“A savvy balance of rigidity and flexibility helps integrate sustainability into everyone’s job.” To accomplish the goal of reducing food waste by 20-30%, for example, the task has to be broken down: which crops to target, in which countries, and how. This requires the sort of expertise that’s only available at departmental and local level.
“No company can solve the ‘tragedy of the commons’ by going it alone.” Complex problems like the loss of ecosystems require industry collaborations – like when in 2010 Unilever, Nestle, Coca-Cola, and Pepsi agreed to work together to prevent deforestation.
There are significant barriers to working with competitors, including lack of trust, the danger of losing intellectual property, and losing unique selling points. But implementing a sustainability plan opens firms’ eyes to the shared environment, and encourages a more collaborative ethos.
Begin by working with suppliers, and when you step up to collaborating with competitors, use contacts at NGOs, universities, and trade bodies as neutral go-betweens.
Palm oil, beef, soy, and timber production are responsible for half the loss of the world’s forests. But thanks, in part, to business’ public commitment to tackling the problem, in 2014, the New York declaration on Forests was made – a target to end loss of natural forests by 2030. This is the sort of progress that can be made when companies set aside rivalry in the pursuit of the common good.
Sustainability and profit are sometimes seen as mutually exclusive, but they are not. Once companies put people and the planet at the heart of all they do, change follows, and the profits take care of themselves.