Unilever and the case for sustainable business

Can businesses like Unilever ever be sustainable if they keep trying to get people to consume more products?

After committing to phasing out non-certified palm oil and giving unsustainable paper the chop, the launch last year of Project Sunlight marked the latest effort by Unilever, one of the world’s oldest multinational corporations, to burnish its green credentials.

The cross-brand initiative aims to encourage its customers to become more aware of their environmental footprint and how to improve it. Key is demonstrating how its products can help them do that.

The corporation is banking that with its reach and influence – Unilever products are sold in more than 190 countries – it can create greener consumers, helping it meet the ambitious targets it set out in its Sustainable Living Plan in 2010.

Key among them is the pledge to double revenues and halve negative environmental impacts by 2020 – to “achieve absolute reductions” across the lifecycle of the goods it sells, halving “the environmental footprint of the making and the use of our products”.

But critics suggest it is impossible for an enterprise so vast, and predicated on profit, ever to be truly green. And the company has yet to quantify precisely the carbon cost of manufacturing each of its hundreds of product lines, let alone that of their consumption and disposal.

Read also: Saying goodbye to a throwaway consumption culture

Most observers agree that it has already taken huge steps forward, certainly in comparison to its competitors. For example, it has developed concentrated cold-water detergents and introduced smaller compressed aerosols to its deodorant ranges, helping to save the equivalent of one million tonnes of CO2 since 2008.

Operational changes are also positive: Unilever has reduced energy, materials and water use in its factories; improved waste disposal; fitted CHP (combined heat and power) systems and biomass boilers, and created regional transport hubs to cut down on vehicle emissions.

Still the claim to be able to “decouple growth from environmental impact” – to harm the environment less while making more money – sounds a false note for many.

“The logic of halving environmental impact while at the same time doubling revenue appears to suggest there will be no real change,” says sustainability expert Jules Peck, a founding member of communication consultancy Jericho Chambers. “Unilever’s argument is that other companies are not as efficient, therefore growing its market share at their expense will drive down the carbon footprint of its customers. The bigger its market share the better, is the argument. This is highly questionable.”

Ben Kellard, head of sustainable business at Forum for the Future, a UK-based NGO, supports Unilever’s efforts. He underlines the fact that all businesses will need to take a longer-term strategic view of challenges such as resource scarcity and climate change. He says the scale of the challenge it has set itself shouldn’t be underestimated, likening it to “turning a supertanker” onto the path of sustainability.

“Consumers want sustainability. Retailers want it. It drives innovation and cuts costs. Companies like Unilever are recognising the growing risks and opportunities that sustainability mega-trends are presenting to business. As governments prevaricate they are deciding to step in and benefit from ‘first-mover advantage’.

"Unfortunately, too many businesses are so focused on the short term, so much so that they are risking their ability to adapt to future challenges that could fundamentally undermine their business model,” says Kellard.

Stephen Howard, chief executive of London-based Business in the Community, says businesses have a “huge opportunity” in terms of encouraging their customers to change their habits, improving both the financial and environmental bottom lines. And in an increasingly connected world “any action business can take, however small, will travel further and faster than ever before, influencing greater behaviour change”.

Despite its more “sustainable” products and attempts to engage with and alter the behaviour of its customers, what Unilever (and other businesses too) is not doing is committing to manufacturing fewer products. The one habit it doesn’t want people to kick is shopping.

Instead, it intends to build new factories and attract new consumers in countries like China. By 2020 the corporation expects developing markets to account for 70% of its total sales (the figure currently stands at 57%). In this context, any claim to be able to limit negative environmental effects, let alone decrease them, seems implausible.

“What Unilever is categorically not doing is saying, ‘Do you need this?’” says Jules Peck. “Until it is actively communicating the need to use less, it will have no overall impact on consumption and thus on sustainability. And with a vast market like China opening up, it has a responsibility not to manufacture need and encourage the same pattern of consumption as we see in the West.”

In terms of sustainability and climate, geared as it is towards profit, neither it nor any other company is going far enough, he adds.

“In terms of climate change, to keep temperatures globally within a ‘safe’ threshold, a rise of no more than 2C, by 2050, then we need an 11% per annum reduction in the energy intensity of every global dollar of economic output. The energy footprint of every unit of economic output should fall by 11% every year, year on year, by 2050. Does Unilever’s commitment to halving its environmental footprint by 2020 equate to that – let alone factoring in increased production? It doesn’t. Are any companies currently equal to what’s required? No.”

So is Project Sunlight just a higher grade of greenwash, asking consumers to become more eco-minded in order to ply them with a proliferating number of “eco” products?

Gideon Middleton, senior lecturer in business and climate change at the UK’s University of East Anglia, says it’s difficult to tell at this stage: “If a company did seriously want to help catalyse a change to a more sustainable world then this is the type of action they would be taking.

“Paul Polman, Unilever’s chief executive, seems very committed and actively engages and promotes corporate responsibility internally and externally, and the Unilever programme seems to be following the principles of the circular economy and shared value [addressing social problems that intersect with the business], which is spreading fast and being adopted by lots of organisations.”

For Peck, it is governments that ultimately have the responsibility to change consumer behaviour, however: “The problem currently is that too many people have given up on governments and let them off the hook, thus putting pressure on companies – but in reality companies are just slaves of the market and it is government that sets the rules.”

Unilever were asked to comment on the issues raised in this piece, but declined the opportunity.