External commentary

Unilever Sustainable Development Group

Our panel of external experts, the Unilever Sustainable Development Group, have been closely involved in the development of the Unilever Sustainable Living Plan. Here they share their views on the Plan.

We also took advice from many external experts to develop the approach, programme and metrics for our Sustainable Living Plan. For further information about the Plan and to watch videos of the panel discussions at the launch events in November 2010, see the Unilever Sustainable Living Plan website.

The Unilever Sustainable Development Group comprises external experts who provide advice and guidance on the development of our strategy. The Group's collective expertise covers environmental, social and economic issues in both developed and developing countries.

It meets twice a year to discuss sustainability issues. We share the insights from these meetings with our Board's Corporate Responsibility and Reputation Committee as well as the Unilever Sustainable Living Plan Steering Team.

Commentary on 2009 progress & report

Four members of the Group commented on Unilever’s progress in our 2009Sustainable Development Report. Below you can read their views.

Ma Jun

Unilever's new vision demonstrates that it clearly understands the constraints posed by dwindling water availability.

The company should be recognised for all the actions it is taking to reduce water use in its own manufacturing as well as through the value chain. But to help with water conservation, especially in the emerging economies like China and India that are expected to create much of its planned growth, Unilever needs to further leverage its buying power.

Unlike the rich developed countries, emerging economies often face water stress caused by a combination of water scarcity and pollution. With massive manufacturing to meet rising local demand and the demand of the western world, the discharge of industrial wastewater and urban sewage as well as farming run-off is destroying limited clean water resources.

Unilever can encourage local suppliers to improve their environmental performance through its responsible sourcing. As it has done in sourcing of tea and palm oil, I encourage Unilever to collaborate with local partners to clean up the supply chain. I am highly satisfied that Unilever tapped into our IPEA pollution monitoring database in 2009 to review its suppliers' water pollution records. As a result, Unilever prompted one of its major Chinese sourcing partners to make its first public disclosure of the corrective actions put in place for 17 tomato suppliers.

Such actions have the potential to check what I call the global 'race to the bottom' that can be caused by globalised sourcing. I suggest Unilever co-ordinates with Walmart, which is also a regular user of our pollution database, to extend responsible sourcing further down through the value chain. This would be a huge help to the conservation of water resources in emerging economies.

• Ma Jun is Founder Director of the Institute of Public and Environmental Affairs (IPEA), China.

Malini Mehra

How can a large multinational company operating in a range of developing countries deliver social and economic value?

Few have addressed this question in as great depth as Unilever. The case studies from Indonesia, South Africa and Vietnam have much to teach us. Unilever South Africa employs directly or indirectly almost 1% of the country's workforce. Unilever Vietnam contributes 1% of the gross domestic product (GDP) of the country. More than a quarter of Unilever Indonesia's revenues go to the government and 95% of the population uses at least one Unilever product. Beyond the obvious points of the economic contribution of the company in terms of employment and tax payments, the studies and Unilever's experiences show us that a company can exert greater socio-economic benefit by re-examining its business model and providing a hand-up to marginal communities. As its Shakti and Alllanblackia initiatives demonstrate, neither of these has emerged due to altruism alone – they reflect a healthy combination of a sense of social responsibility and enlightened self-interest.

Unilever has recognized that its future is dependent on the health and well-being of the people it serves. Healthy people with cash in their pockets will spend money on the essential consumer goods that Unilever provides. This goes beyond just a 'licence to operate'. Unilever has been in countries such as India, China and South Africa for more than a century. No company would have survived that long – and prospered – if the primary economic relationship had been exploitative.

The modern world, however, has high expectations of multinationals. Not only is a whiff of exploitation corrosive to a company's reputation, it can quickly lead to campaigns at headquarters, as Unilever discovered following allegations of labour irregularities in Pakistan.

Perhaps a broader lesson from these analyses is the interdependence between the conduct of multinationals, the design of national policy frameworks and the response of consumers and stakeholders. A lot more work is needed to understand the complex eco-system of interaction between these different sectors which can promote or inhibit socio-economic and environmental benefits.

The studies teach us that we should not expect sustained social change without the engagement of all key stakeholders. It puts us all back in the frame.

• Malini Mehra is Founder and CEO of the Centre for Social Markets, India.

Jonathon Porritt

Where do the responsibilities of any company in the environment, health and well-being, climate change, economic development issues and so on – start and finish?

It is tempting for a Board of Directors to keep things as tight as possible, so that they are held to account only for those issues over which their company has direct responsibility: sourcing raw materials, manufacturing, transport, packaging and so forth. Message to consumers: 'We make it and sell it, but the rest is up to you'.

Tempting – but highly problematic from a sustainability point of view! Time after time, this report highlights the balance between Unilever's direct impacts and the much bigger impacts from the consumer's use of Unilever products.

This is a huge issue: with a mind-boggling 125 billion washes a year involving its laundry brands, Unilever cannot possibly manage its total footprint without working with consumers to reduce their 'impact share'. That's what the Cleaner Planet Plan is all about, motivating consumers to think about and act on their own CO2 and water footprint.

When I first started working with Unilever 14 years ago, they had just developed a rather crude assessment tool called 'The Overall Business Impact Analysis'. The progress since then has been astonishing. The baseline metrics that are now in place still have some gaps, but the knowledge available to Unilever's managers today is in a completely different league. Very few companies have as yet got their act together in this kind of way – but increasingly, that is what customers, shareholders and regulators are now demanding. Show us your workings!

Lots of people today prattle on about 'quick wins' in this area. Quick wins are important, but nothing like as important as the 'long hauls' on which success really depends. To double the size of a company like Unilever – with no net increase in environmental impact – is an extraordinary commitment. But a very necessary one. Scientists tell us that this kind of ambition level is the very least that will be required, on a global scale, to avoid further damage to the life-support systems on which we depend. In that context, such leadership really matters.

• Jonathon Porritt is Founder Director of Forum for the Future, UK.

Dan Esty

It is a great pleasure to see Unilever's new CEO not only reconfirming the company's longstanding commitment to sustainability but extending it with a sweeping vision that offers a real opportunity for leadership.

To "double the size of the business while reducing the company's environmental impact" presents an ambitious goal – especially as the scope of focus covers the entire value chain, not just Unilever's own internal footprint. As a consumer goods company, Unilever cannot meet its target without engaging its suppliers and consumers who generate so much of this impact. As Unilever steps up to this challenge, it has a strong base to build upon with a record of initiatives from the Marine Stewardship Council to its Sustainable Agriculture Programme and its more recent supply-chain carbon management efforts.

Success, however, will require that every Unilever manager, and ultimately every employee, plays a part. But the reward – reasserting the company's tradition of building its brands and business on a strong foundation of core values and playing a recognised leadership role in every market in which it operates – promises to be substantial. Today, delivering value in the marketplace increasingly turns on the capacity to fold sustainability thinking into core business strategy.

• Dan Esty was formerly Hillhouse Professor of Environmental Law, Yale University, US. He resigned from the Unilever Sustainable Development Group in March 2011 in order to become head of Connecticut’s Department of Energy and Environmental Protection in the US.  We wish him well in this new role and thank him for the many years of inspiration and challenge that he has provided to our Group.

Biographies

A short biography for each of our external advisors in the Unilever Sustainable Development Group is available to download in related links.