Part one of a two-part series on the Unilever Sustainable Living Plan launched in 2010.
By Aman Singh
Unilever's Sustainable Living Plan was created and launched amid much fanfare in 2010. It was lauded for its ambitious goals, an exhaustive list of metrics and for its commitment to put sustainable and equitable growth at the heart of its business model.
This week, the consumer products company released its second progress report and it began with a stark statement from CEO Paul Polman:
“The world continues to face big challenges. The lack of access of many to food, nutrition, basic hygiene and sanitation, clean drinking water or a decent job should be a concern to all of us. We firmly believe business has a big role to play in striving for more equitable and sustainable growth, but large-scale change will only come about if there is real collaboration between companies, governments and NGOs across all these areas.”
Now, the report is impressive, exhaustive and filled with data. So to get beyond the flash, the avalanche of numbers and statistics, I reached out to Keith Weed, Chief Marketing & Communications Officer also responsible for the Sustainable Living Plan, to discuss not only the challenges of reaching some of the goals Unilever is striving for by 2020 but also the successes, the unforeseen road bumps and the transformation the company is undergoing culturally because of the Plan.
To get started, here are the three overarching goals Unilever began its Plan with:
- Help more than a billion people take action to improve their health and well-being;
- Source 100 percent of agricultural raw materials sustainably;
- Halve the environmental footprint of its products across the value chain.
Ambition: Sustainability in Perspective
"The report is indicative of what we're trying to do. We're trying to do things at scale. This is not a [standalone] CSR project in Africa but something that touches every single element across our value chain," he began.
It takes a mindset shift to put Unilever's plan in perspective. As Weed explained, "The idea that it isn’t just about the footprint of your facilities…we have to think all the way through the lifecycle of a product from consumer to facilities to sourcing to the impact of key productions. The Unilever Sustainable Living Plan guides our direction."
Did his team realize the magnanimity of the goals they were setting? "We knew that we couldn’t achieve all of them but that if we set them like this, we would find solutions along the way by working with others," he said, adding, "When you get interconnected, solutions and opportunities open up. That was the spirit we started with."
And the results encapsulated on Unilever's website and a 53-page PDF download, are in keeping with that spirit. "It's not about mechanically ticking off the targets and goals. OurSustainable Living Plan is a movement to get business to move toward socially and environmentally sustainable future," he clarified.
The Unilever Sustainable Living Plan: Highlights
First of, he reminds me that from the outset, the Plan set out the sustainability goals to be achieved alongside the mission set out in 2009 to double the business. "We serve two billion people a day and another 2.5 billion are expected to be added to the world's population by 2050. So our goal is to reduce our environmental footprint and increase our social impact while doubling our business."
The good news: "We have started to drive sustainability into the core of our business and today, our sustainability efforts are helping to drive business growth." One example is Unilever's popular Lifebouy soap, which was rebranded in 2010 with a social purpose alongside:
"[We went] from selling soap to encouraging people to wash their hands – and wash them correctly. And our efforts have resulted in double-digit growth over the last three years – and reaching millions with our Handwashing campaign. It's proving the coherence of our strategy of combining social impact with business growth instead of just a sales goal," Weed explained.
- Laundry cleaner: Unilever increased its market share by 10 percentage points since 2010 to over 25 percent, with its concentrated liquids, which according to Weed carry a much lower carbon footprint in production and use.
- Dry shampoos: A huge opportunity for the company, right now dry shampoos are mostly sold in the U.S. – where Unilever occupies a 75 percent market share. But as the company enters into more water-restricted countries, Weed predicted an accompanying increase in sales. The environmental benefit? Compared to heated water, dry shampoo reduces CO2 by 90 percent through lower water usage and less heating of water for the shower. An added benefit for developing countries: water conservation.
- Dove: The Self Esteem campaign continued to gain momentum with 62 percent of women who know of the campaign now recommending Dove to others. "The campaign started with the idea that we should think differently about how we portray beauty," said Weed, "Today, it’s a global movement."
- Oral hygiene: Unilever's oral hygiene campaign helped its Signal brand grow by 22 percent in 2012. "People brush their teeth in the morning and evening, which requires more toothpaste, ergo a virtuous circle," contextualized Weed.
A Twist on Purposeful Cause Marketing?
So cause marketing spelt and implemented differently. By attaching value and impact with its core products, Unilever is addressing a question all consumer products companies continue to struggle with: how do you change consumer behavior to scale a company's sustainability efforts?
For Unilever, this has meant active pairing of product and messaging with a focus on impact and growth, yet ultimate success is far away.
As Weed explained:
"This is a coherent strategy that works – we're increasing our social impact while growing our business. However, while we're making good progress, we're still facing challenges across the value chain, whether its with sourcing, food production or disposal."
And each carries with it a nuanced set of challenges, a complex set of solutions and invariably a cobweb of marketing, brand positioning and partnerships.
"We have reduced our CO2 emissions, non-hazardous waste to landfill has been reduced in 50 percent of our factory sites, we're sourcing over a third of our agricultural raw material from sustainable sources, up from 14 percent when we started in 2010…yet we're miles away from our 2020 target of 100 percent," he offered.
Scaling Behavior: Easier Ideated than Done
Of course, a key ingredient in Unilever's Plan is the ability to scale. For the world's largest tea producer, these achievements might mean small metrics today but when scaled are attribution to an entire value chain at work on technological improvements, environmental studies, and more. However, the opportunity is also a challenge:
"The sheer scale of our commitments is tremendous. For example, we want to be able to educate a billion people by 2020 on washing their hands correctly. That's a lot of people – despite the progress we've already made since 2010 –119 million people reached since 2010, of whom 71 million were reached in 2012. Scale has been more challenging than we originally thought," Weed explained.
Another challenge: encouraging people to adopt new behaviors.
Consumer Behavior: The Toughest Challenge Yet?
"When someone tells you something about hygiene, it's easy to do it for a couple of days and then switch back to your old habits. Habits are hard to change and we're seeing this come up in almost every initiative," he said.
Using the example of laundry, he exemplified:
"The biggest use of domestic water across households worldwide is for laundry. Only a few hundred million in North America and Europe use machines. The other billions wash their clothes by hand and usually use four buckets of water to do so: wash in one, rinse in three. Our challenge is to reduce that rinsing from three buckets to one. So we came up with a product that kills the foam – wash in one bucket and rinse in one bucket. Water used is instantly cut to half. And we expected the product to be a runaway success."
The team found that embedding that behavior change of using one bucket instead of three was instrumentally tough. Even in water scarce markets where people have to walk long distances for water. "Rinsing is hard work. I thought this would be a rapid victory but we found that it takes time to change habits and we ended up reaching only 29 million households, much lower than anticipated," he recalled.
When your footprint encompasses billions of culturally diverse populations with very different social and environmental settings, scale becomes an ever-moving target.
Perhaps Weed puts it best again: "If you went to work in a Boeing 747, it wouldn’t make a difference to the planet. If half the planet started doing that, it would make a huge difference. The power of individuals is when you scale them together."
Its hard work.
And Unilever's 2012 Progress Report while celebrating the company's achievements does not undercut the challenges ahead. "We're breaking new ground every day. We're showing results. But there are several pieces we are yet to crack," said Weed.
Part II: What role does a consumer-facing sustainability strategy play in an ambitious plan like the USLP? How is Unilever using brand positioning and clever marketing ["Seductive Nutrition"] to drive change, and how is the company's internal culture evolving? Stay tuned!