Innovation

Since its foundation in 1930, Unilever has been a company that cares about the environment, the future of people and the planet. The company delivered a number of initiatives that could be qualified as sustainable by today’s standards, but in 2009, when Paul Polman became CEO of Unilever, the company officially announced that sustainability had become the company’s new business model. Unilever realized that there had to be new, more responsible way of doing business, and saw the opportunity to pioneer this business model and to show other companies that it was possible.

This innovative approach was introduced to help Unilever's consumers "to live better lives, in a sustainable way today and tomorrow", using Unilever products and brands, as Irina Bakhtina told us. That means everything that the company does must be in line with its renewed business model and sustainability concept. This really applies to everything the company does. For example, “If you want to launch a new “Domestos” [household chemicals], you are supposed to select a certain type of bottle, type of plastics, size of the sticker containing information. And if you want to select a larger sticker, which is larger than in the previous versions, the eco-design tool will not let you do that. Because the idea of it is to make sure that every new product is supposed to be at least as good as the previous one, or better".

In 2010, the Unilever Sustainable Living Plan (USLP) was adopted with a reporting deadline of 2020. It consists of the three pillars of sustainability and aims to improve health and well-being of people (social pillar), reduce environmental impact of Unilever's performance (environmental pillar) and enhance livelihoods for millions (economic pillar). The period from 2010 till 2020 is "a transformation period from an old business to a new business", which means that after 2020 there will be a new, even more exciting sustainability plan, and this process of becoming more and more sustainable will never stop. To achieve the USLP goals, Unilever is changing its entire value chain.

With respect to environment, the company engages directly with the farmers. As Irina Bakhtina pointed out, "There has to be better water usage, irrigation, protection of soil, no unnecessary chemical stuff, etc". Then it comes to factories, where emissions should be reduced by half. After that comes logistics and transportation, which should become greener, too. Moreover, the company tries to use eco-packaging for their products wherever it is possible. With regards to the economic pillar, Unilever seeks to provide their consumers with products of high quality, which are not harmful for health and available at affordable prices, in order to enhance or at least not to harm people’s health and well-being. As for the social pillar, Unilever values its employees and respects their human rights, considers interests of local communities living next to the company’s enterprises, works with small and medium businesses granting them access to their value chain.

This is the evidence and a great example of the new business philosophy - not to implement some sustainable initiatives trying to help the world around it and to be consistent with SDGs, but to become a sustainable company considering sustainability not as a small project or initiative ("initiative sounds like something temporary: from here to here”), but as a business model. "It’s a new way of doing business", as Irina said, and we hope this large-scale innovative approach that Unilever undertakes will inspire other businesses to consider sustainability not just at the level of initiatives, but as a business model and as a base for future functioning of business.

Inspiration

As Irina noted, Unilever "is growing, getting more market share, getting more people buying our products, and we still have to reduce our environmental impact, we still have to increase our positive social impact, so these should go in one goal". The company is aware of its own responsibility and the ability to influence the current situation, as Irina pointed out "we have massive power across the world, with our extended value chains. We are the biggest purchaser of tea on the planet, just because of our volumes, we are number one tea buyer. We are number one buyer of palm oil worldwide, so we have all the responsibilities, which are linked to palm oil plantations in Indonesia". Unilever started their sustainable development actions completely voluntarily, and now this multinational company with strong responsibility implements not only global initiatives and projects, but also specific local brand programs, when a brand performs the role of a social driver or a change driver, who wants "not only to address a problem in a practical way, but also to show people around that there are simple solutions available".

Unilever, as a leader in FMCG, believes that it cannot stay away from the social needs of its target audience. Irina emphasized the importance of developing smart brands for consumers, "For people it is not only important that the brand really cares, but also if the brand is smart enough, if the brand has a brain". That is how the project Nepoteka was created by Rexona, a deodorant brand. It was a difficult time in 2014 for people because of the financial crisis, "so Rexona decided to run activities in such a way that people could collect miles on their mobile phones or their gadgets while running and exchange these miles to cover all or some significant part of their mortgage debts". This project shows everybody how impossible can become possible and how it could be implemented in a simple way. Unilever believes that we can change the world, because "power is in every one of us", told us Irina. And such philosophy is very inspiring.

Overall impact

According to Irina Bakhtina Unilever's impact on the world is already tangible. Unilever's global performance shows significant results in the period from 2010 to 2017: 538 million people have been reached through Unilever's sustainable living brands, the company reduced CO2 emissions from energy by 43%. In addition, water consumption was cut by 37%, total waste the company makes has a 96% decrease, 51% of used agricultural raw materials are now sustainably sourced, and 920,000 women have received training on capability building. As of 2015, all Unilever factories across the world, both food and non-food categories, including all factories in Russia, have been operating based on a zero-waste to landfill principle.

The company realizes the scale of existing problems and takes action in an evolutionary way to change the current situation in the world. For instance, it is planned that by 2030 there will be a switch from regular vehicles to electric vehicles and to the renewable sources of energy like wind, solar or hydro power. Year by year, the positive influence of the company is growing and it helps other companies and partners "to become a better version of themselves", concludes Irina Bakhtina.

Business benefit

It has to be noted that sustainable way of doing business seems to be a win-win strategy for the company and its consumers, because when business acts in accordance with corporate and social responsibility, it also upholds company’s reputation on the market among stakeholders. Sustainable development programs help improve the image of the company in the eyes of consumers. As a result, consumers become more trustful and committed to the brand.

Irina added that "it is really important to develop social ambition for the brand which actually has to be financially sustainable as well, because there is no point of doing it otherwise". A good example for that is Unilever's project Nepoteka by deodorant brand Rexona, that was mentioned earlier. Rexona measured its sales when the campaign was actually promoted, and “registered sales & business growth resulting from Nepoteka activation”. Therefore, this project made a direct impact on sales and customer engagement and increased it.

Irina explained that Nepoteka’s success is based on the fact that the program proved to its consumers that Rexona is a “brand with a brain”. Consumers "vote with their wallet" for smart brands, and it is true for any smart brand (not only Rexona). Therefore, smart brands will bring their companies more benefits than other brands, and it is profitable to develop brands with brain, with something behind them, which brings companies both tangible and intangible benefits.

Social and environmental benefit

Such a global and complex approach to sustainability is likely to lead to significant results including societal and environmental, because these are the two out of three sustainability pillars, which the Unilever business model is based on. Moreover, it has to be noted that both these two pillars and therefore their benefits cannot be separated from each other. There were some examples above that show the positive societal and environmental impact of the new sustainable business model of Unilever in figures, and show that Unilever really comes closer to achieving its social and environmental USLP goals.

But in this part, we want to note again that Unilever looks into the future, and wants to go beyond the USLP plan, and enhance people’s lives and environment. During the interview, Irina told us that by 2030 the company is going to switch to the renewable energy sources, "and we will produce more energy from the renewable sources, from green sources, than we need for our business. There will be energy efficient factories, and we will give all the excess of energy to local communities. So, local communities will also be green". This is a great example of how business can help local communities, and how it can accustom people to a more sustainable way of living, that will make the planet a better place for life in the future.

Interview

Irina Bakhtina, Vice President Sustainable Business & Comms NAMET RUB & Africa, Global SB & Comms Capability & Training