The new CEO of Unilever will be Alan Jope, replacing Paul Polman. That is eminently good news for anyone that is inspired by the ability of the private sector to take on social and environmental issues, a light of optimism in the face of the apparent inability or unwillingness of governments to generate robust creative solutions to societal problems.
It is amazing how the private sector has taken a meaningful, leadership role in combating the serious problems facing the world and its people utilizing their presence, flexibility, and applicable assets and skills. One of the leaders has been Paul Polman and Unilever and Jope, by all accounts, will assume the same leadership role.
The Unilever Sustainable Living Plan
Unilever is a shining light with their umbrella Unilever Sustainable Living Plan (USLP) launched in 2010 and its host of specific environmental goals involving its environmental footprint (the goal is to cut it in half), getting people access to safe water, increasing the use of renewable energy, and stopping all hazardous waste going to landfills.
In addition, social programs abound at Unilever. Consider the Dove programs to raise the self-esteem of girls and women and Lifebuoy’s program to get one billion people to change their hand-washing habits to reduce infant deaths throughout the world (they are half way toward the goal). Unilever is about much more than short-term financials.
The rationale as explained by CEO Paul Polman is fascinating. He notes that in part because of the limits of capitalism we have created an unsustainable set of problems which include global warming, resource depletion, and an increasing gap between the rich and poor; and that business should not sit on the sidelines, but instead be part of the solution. Unilever, under Polman, makes the needs of citizens and communities carry the same weight as the demands of shareholders.
Polman argues that such actions will help business in the end. Better employees—especially millennials—will be attracted to this mission. Enough customers will respect and admire you to make a difference. Brands will get more visibility and energy, key determinants of long-term success. By raising the living standards of third world counties, new markets will open. The risk of catastrophic damage to the environmental, social, and economic framework in which we live will be reduced.
Unilever’s Performance Pressures
There are performance pressures facing Unilever, like other big brand consumer firms, that come from Amazon and other direct digital players, private label retail offers, discount chains, and cost pressures. In this context, Unilever fought off a $140 billion or so acquisition effort by Kraft-Heinz owned by the Brazilian private equity group 3G Capital whose strategy was summarized by Fortune as “Buy Squeeze Repeat.”
There was a choice to be made at Unilever between Polman’s social and environmental higher purpose or Milton Friedman’s admonition that the only social responsibility of business is to maximize profits. Unilever made the right choice.
Alan Jope, a long-term colleague of Polman, is one of the good guys. He has worked with Polman for environmental programs and all indications are that he will continue this philosophy.
It would have been tragic if Unilever had backed away from their leadership position relevant to the role of business in society and succumbed to the temptation to cut social or environmental programs to improve short-term financials. Thank goodness that did not happen.
Unilever will likely continue on the path of a long-term thought leader with their new CEO, Alan Jope. Learn more about Unilever as a leader in social programs and sustainability.