As the backlash against ESG takes an ideological turn, Unilever CEO Alan Jope rebuffed the idea that sustainability is a distraction from core business fundamentals.
In fact, he said, the two are linked.
“We are not an NGO,” the CEO of major brands such as Dove soap and Hellmann’s mayonnaise told Yahoo Finance Live (video above). “We’re a for-profit organization. And the reason why we care so much about sustainable business, B corps, and other expressions of it is because we think it contributes to the bottom line. We’re seeing our brands that offer consumers a sustainable choice are growing much faster.”
Earlier this year, top Unilever shareholder and Fundsmith Founder Terry Smith criticized the consumer packaged goods company for buckling down on sustainability, saying: “A company which feels it has to define the purpose of Hellmann’s mayonnaise has in our view clearly lost the plot.”
Jope, for his part, expressed that disgruntled investors like Smith are in the minority: “We hear overwhelmingly from shareholders and board members, all of our board members, to stay the course,” he said.
Unilever began cleaning up its sustainability reputation in earnest in 2010 when former CEO Paul Polman introduced the company’s Sustainable Living Plan (USLP) amid growing awareness of climate change and the company’s lackluster performance relative to competitors such as P&G.
By 2020, the company made significant progress toward a number of its goals, such as sustainably sourcing palm oil and cocoa, but came up short on several others such as its greenhouse gas emission and waste reduction targets.
Under Jope, Unilever reiterated its commitment to a purpose-driven strategy by instituting the Compass program, which serves as the next phase of the company’s sustainability plan. That vision states that Unilever will achieve an absolute reduction of 100% of its emissions in its operations by 2030 and net zero emissions across its value chain by 2039, among other goals oriented toward nutrition, health, and diversity.
Jope has championed this mission since taking over in 2019. Although he plans to retire next year, he suggested that the company won’t retreat from its goals, especially as the effects of climate change continue to add risk to business operations.
“We’ve taken 1.2 billion euros of cost out of the business through sustainable sourcing,” Jope said. “We know it reduces risk. A world on fire or underwater is not a great place to be selling soap or soup.”
Grace is an editor for Yahoo Finance.
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Source: https://finance.yahoo.com/news/sustainability-bottom-line-unilever-122328043.html