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Unilever Global: Making sustainable living commonplace
Contents
INTRODUCTION.....................................................................................................................................1
ABOUT HUL...........................................................................................................................................2
OVERVIEW OF THE ORGANIZATION.................................................................................................2
SUSTAINABILITY STRATEGIES AND CHALLENGES.............................................................................3
SUSTAINABLE STRATEGY PLAN.............................................................................................................4
IMPLEMENTATION AND BENEFITS.......................................................................................................5
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Unilever Global: Making sustainable living commonplace
INTRODUCTION
The word sustainability essentially means meeting our needs without putting at stake the ability of
future generations to fulfil their needs. Human intervention in various forms had had adverse
impacts on all ecosystems since the last century. The threat of global warming, pollution and
extinction of various life forms has stimulated people, though lately, to take actions to conserve the
ecosystems. Sustainability, however is not just limited to environmentalism, it includes social and
economic aspect as well. In a corporate context, it is something that is crucial for long term survival
and growth. Though 90% managers consider sustainability to be important, only 60% of the
companies have a sustainability strategy (Forbes, 2021). Sustainability helps organisations achieve
brand value, competitive advantage, meet consumer demands and create new opportunities.
The influence of a business on the environment and the impact of a business on society are listed as
two categories of sustainable business practises by Harvard Business School, with the purpose of a
sustainable practise being to have a positive impact on at least one of those areas. This sense of duty
motivates firms to strike a balance between long-term benefits and short-term profits in order to
achieve inclusive and ecologically sound goals. This encompasses a wide range of different practises.
Cutting emissions, cutting energy consumption, obtaining items from fair-trade organisations, and
ensuring that their physical waste is disposed of appropriately and with as little carbon impact as
possible are all examples of sustainable practises (Cavaleri et al., 2018).
The report focuses on how environmental issues are impacting businesses. Consumer sentiments
inclined towards being associated with an environmentally conscious brand and employee health
and morale affected by environmental conditions are some of the issues that the organizations need
to look out for and develop sustainable strategies to tackle. There is a need for alignment of
organisation sustainability goals with the goals defined by the United Nations. Sustainable strategies
that can be adopted at Unilever will be analysed along with a critical review of the long-term
effectiveness of each. These positive outcomes resulting from the project may span enhancement of
brand value, increasing customer loyalty, positive brand image and hence, increases revenue and
profit. These will be discussed extensively in the following report. Rise in health consciousness can
change customer preferences and shift towards other products.
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ABOUT HUL
OVERVIEW OF THE ORGANIZATION
Unilever is one of the largest fast moving consumer goods companies in the world with more than
400 consumer brands and successfully operating in more than 180 countries throughout the world.
An outcome of the merger of Dutch company Margarine Unie, a producer of margarine and British
soapmaker Lever Brothers, Unilever has since then split into three main divisions: Home Care,
Beauty and Personal Care & Food and Refreshments. The wide range of products available cater to
2.5 billion people every day. The company was rated the third largest company in 2012 in terms of
revenue. A strong organization culture, fuelled by the integrity and initiative of the employees have
played a key role in building up the organization. Acting at the local level and thinking globally has
been at the core of the organization’s operations. Through trial and error, the dynamism of Unilever's
leadership over the years has highlighted the company's drive to excel, innovate, learn and get things
done. It had realized that responding continuously to changes in external environment was essential for
long term growth. A strong focus on research and development has enabled the firm to cope up with
changing customer preferences and maintain a competitive edge above others. At Unilever, the purpose
is to make sustainable living commonplace while minimizing carbon footprint. At the same time, the
organization focuses on creating a positive impact by working with brands and services helping people
feel and look good. There is also focus on continuous training and capability building of the employees in
order to improve overall productivity and hence output.
SUSTAINABILITY STRATEGIES AND CHALLENGES
The negative changes in the external environment poses challenges to a global company such as Unilever.
The negative outcomes may range from disruptions in supply chain and labour challenges to resource
constraints and increased insurance cost. A PESTEL analysis can be used to analyse the macro
environmental factors which may affect business at Unilever. Climate change can have serious
implications on ecosystems including social, environmental and economic. Natural calamities can have
large scale impacts on business, resulting in disruption and losses. Climate change would also result in
increased expenditure such as increased air conditioning costs due to increased warming or to modify
their production systems to adapt to the local climate. Air and water pollution contribute to ailments
which causes discontinuation of employee’s work, affecting the organization. Water scarcity is another
rising issue that human beings are dealing with. The lack of this resource now affects a major part of the
population and has the potential to create severe health issues in the future. Depletion of resources
either due to natural disasters or through human intervention creates constraint for essential raw
materials. Disruption in raw material supply results in production slump.
Economic factors such as unemployment rates, interest rates and the country’s economic development
also affects a business. When the disposable income of citizens is low, the demand drops and retail of
products and services decline. When the wages in a developing country are increasing, it leads to
increase in sales due to a higher demand. Social demographics or a combination of sociocultural factors
are also capable of impacting a business. Demographics may include gender, age, nationality. Rising
environmental friendly behaviour will cause a shift towards more eco-friendly products. The corporate
image of the organization depends on how the corporate social responsibility strategy of the company
aligns with environmental regulations. On the legal front, the organization is required to satisfy the
complex environmental regulations, protect its patents and use strong consumer rights laws as an
opportunity to provide better service to its customers. The most critical problem faced by organizations is
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the complex nature and interconnected of the different sustainability issues. Without holistic thinking
and action, sustainability efforts by the organizations might fail.
SUSTAINABLE STRATEGY PLAN
Sustainability strategies in organizations aim to address the environmental, economic and social
issues. The elements of a sustainability strategy incudes a strategic direction, improvement in
operational performance, improvement in value chain performance and relating the strategy to
internal and external stakeholders.
Figure 1: Elements of a sustainability strategy
The sustainability strategy must be integrated across all business functions research and
development, production, finance, planning, marketing, service and others. Each layer of the
organization must be aware of the link between sustainability and public perception of their
commitment to their strategy. The focus of sustainability should not be only reducing operational
costs but also incorporating it across business to create new products for customers. Scenario
planning can be used by managers to discuss alternatives (Amini et al., 2018). Through this
approach, they will be better prepared for unforeseen circumstances. Enhancing awareness and
engaging employees is the next important step. It is vital for companies and their employees to
remain up to date through training and information sharing. Motivation of employees to focus on
and improve their sustainability skills can be done.
The next important step is developing metrics for sustainability. It is crucial for firms to evaluate
their baseline environmental performance. A product life cycle which involves resource extraction,
manufacturing, distribution and use clarifies that the actual environmental footprint made by the
organization is actually much more than that occurring during manufacturing. Such information will
help the firm to reduce or reallocate their resources accordingly. This can be achieved with the help
of a footprint metric. Including supply and product chain in this footprint will still provide a better
clarity of the impact created by it. Sustainability efforts at the organizational level will be successful
only if the different facilities meet sustainability standards. Hence stringent monitoring by
department heads is necessary. Improving value chain strategy is another important component of
this plan. It is necessary to know the footprint at each stage in the value chain. Working with the
suppliers and developing a supplier code of conduct to improve their environmental performance
will play a critical role. The end customers are the last but the most important tool in the strategy
plan for reducing the overall footprint. Customers can play a key role in the initiative by engaging in
environment friendly activities. Simple steps at their ends such as avoiding the usage of plastic bags
at the retail counters will play an essential role. Awareness promotion through different social media
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Unilever Global: Making sustainable living commonplace
channels, frequently conducting environmental campaigns will create a positive image of the brand
in their mind while pushing them to behave in an eco-friendly way.
Partnership will local community groups will provide opportunities to understand the concerns and
needs of the local communities (Landrum et al., 2018). Collaborating with social service groups and
non-governmental organizations will lead to informed decision making. The company will have
access to more information and a sustainability knowledge base. Involving them in the local
campaigns will play an important role. At the plant level, limiting over production is essential to
avoid wastage. Usage of accurate forecasting models to associate a balance between the supply and
demand. Overexploitation, overproduction must be under control. This must be a part of the
sustainability target allocated to the corresponding department in order to motivate the managers
and the employees to focus on the same. The essence of strategic management. The goal of
strategic management of sustainability initiatives is to align the source of competitive advantage of
the project with the firm's kind of competitive strategy. A cost leadership strategy is most
compatible with sustainability activities that improve a company's cost advantage.
IMPLEMENTATION AND BENEFITS
There are many benefits associated with implementation of the sustainability strategy plan.
Reduction in energy usage will be the direct outcome. It will reduce the overall environmental
footprint of the organization creating the image of an eco-friendly brand and hence build customer
loyalty. Awareness campaigns will help in generating eco-friendly habits of the customers and create
a positive image of the brand in the minds of the customers. Hence, it will attract more
environmental conscious customers thus expanding the customer base. This would result in
increased sales and revenue. With reduced cost and higher environmental performance, the
organization would have a competitive advantage over its competitors. The positive image gained by
the firm would also assist in attracting investment and funds and help retain employees. Employees
want to work with firms who care for the environment. This would also help the organization attract
more talent.
Inculcating the sustainability tools in the organization and making it an integral part of every step or
process will make it resilient to uncertainties in the external environment. It also creates a good
atmosphere and sets a higher benchmark for the industry. Investment in sustainable strategies by a
company creates higher market standards and deters competitors from pursuing unfair and
unethical practices. Following sustainability practices also helps reduce wastage at different levels.
Proper planning at plant level maintains a balance between supply and requirements, avoiding
overproduction. There is simplification of production by eliminating redundant components and
enhancement of productivity from resource utilization. On the social front, the plan results in
dynamic capabilities to innovate. Awareness amongst employees improves health and safety for
employees.
CONCLUSION
Sustainability is becoming more and more important for organizations across all industries. There is a
need to respond to the drastic changes taking place in the external environment. Sustainability helps
meet the needs of the customer while avoiding exploitation of natural resources. In order to create a
positive impact on the environment, they must invest in the sustainability pillars. Social
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Unilever Global: Making sustainable living commonplace
development which ensures fair treatment of all stakeholders, environmental protection which
causes cost effectiveness and helps develop a competitive edge and economic development which
helps businesses to generate profits. Sustainability is based on a simple principle, that everything
needed for continuance of human life on the planet, directly or indirectly is dependent on the
natural environment. For this, it is necessary to pursue and maintain conditions that will ensure the
ability of future generations to meet their needs. Hence, it is a form of an investment into the future.
Promoting these practices in day to day operation and integrating the same with operations and the
value supply chain. Investing in cost effective technology will reduce wastage of resources and
maintain a balanced approach.
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Unilever Global: Making sustainable living commonplace
REFERENCES
Amini, M., Bienstock, C.C. and Narcum, J.A., 2018. Status of corporate sustainability: A content
analysis of Fortune 500 companies. Business Strategy and the Environment, 27(8), pp.1450-1461.
De Mendonca, T. and Zhou, Y., 2020. When companies improve the sustainability of the natural
environment: A study of large US companies. Business Strategy and the Environment, 29(3), pp.801-
811.
Cavaleri, S. and Shabana, K., 2018. Rethinking sustainability strategies. Journal of Strategy and
Management.
Landrum, N.E. and Ohsowski, B., 2018. Identifying worldviews on corporate sustainability: A content
analysis of corporate sustainability reports. Business Strategy and the Environment, 27(1), pp.128-
151.
Matzembacher, D.E. and Meira, F.B., 2018. Sustainability as business strategy in community
supported agriculture: Social, environmental and economic benefits for producers and
consumers. British Food Journal.
Sanchez-Planelles, J., Segarra-Oña, M. and Peiro-Signes, A., 2021. Building a Theoretical
Framework for Corporate Sustainability. Sustainability, 13(1), p.273.
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