June 5, 2013

by Barry Render

Unilever CEO Polman and his products

“Our purpose is to have a sustainable business model that is put at the service of the greater good,” says the CEO of consumer products giant Unilever in Fortune (June 10, 2013).This sounds like the boilerplate that fills corporate-responsibility reports, but Unilever has gone beyond companies like GE, IBM, and Wal-Mart by putting sustainability at the core of its business. In a 2010 manifesto, Unilever promised to double its sales even as it cuts its environmental footprint in half and sources all its agricultural products in ways that don’t degrade the earth. The company also promised to improve the well-being of 1 billion people by, for example, persuading them to wash their hands or brush their teeth, or by selling them foods with less salt or fat.

Whether Unilever’s do-good agenda has driven its financial success is hard to know.  The firm’s global hand-washing campaign, for instance, lifts sales of Lifebuoy soap, while a “brush day and night” campaign helps Pepsodent. Socially responsible marketing around self-esteem for women helped Dove become Unilever’s bestselling brand in the U.S.

The model drives innovation too. Unilever researchers are working to develop a laundry detergent that can clean clothes in a few minutes at any water temperature. The company wants to reduce the sugar in its ready-to-drink teas and remove calories from ice cream. It’s telling the farmers who supply it with palm oil, soybeans, tea, cocoa, and tomatoes to get their crops certified as sustainable. The chickens that lay the eggs that go into Hellmann’s mayonnaise or Ben & Jerry’s ice cream must be cage free. No other company has a sustainability program as wide and deep. Unilever’s plan includes 60 targets, with timetables, such as sourcing “75% of the paper and board for our packaging from certified sustainably managed forests or recycled material.”

This post provided courtesy of Jay and Barry’s OM Blog at www.heizerrenderom.wordpress.com. Professors Jay Heizer and Barry Render are authors of Operations Management , the world’s top selling textbook in its field, published by Pearson.