Blog: Dean BestUnilever claims sales boost from sustainability

Dean Best | 5 May 2015

Unilever today (5 May) published news on the progress it is making on its ten-year programme to double in size while reducing its impact on the environment - and claimed its efforts were becoming an engine behind its sales.

The FMCG giant has a set of "sustainable living brands", lines that it says meet the increasing demand for "responsible" products.

The brands include Ben & Jerry's ice cream, as well as non-food products like Lifebuoy soap and Comfort fabric conditioner.

And, in an update on its Sustainable Living Plan, Unilever said there is growing evidence that "integrating sustainability" into its business is driving growth.

"In a volatile world of growing social inequality, rising population, development challenges and climate change, the need for businesses to adapt is clear, as are the benefits and opportunities. This calls for a transformational approach across the whole value chain if we are to continue to grow. Consumers are recognising this too, increasingly demanding responsible business and responsible brands. Our experience is that brands whose purpose and products respond to that demand – sustainable living brands – are delivering stronger and faster growth," Unilever CEO Paul Polman said. "These brands accounted for half the company's growth in 2014 and grew at twice the rate of the rest of the business."

The likes of Ben & Jerry's are seeing "above-average growth", Unilever said, with "high single and double digit sales over the past three years".

The claim could be seen as a shot across the bows of those in the investment community who have apparently had concerns about Unilever's sustainability programme, with accusations the initiatives have proven a distraction. Polman's comments today could be interpreted as an effort to convince sceptics in the City of the business benefit of its work in areas such as sustainable sourcing and water use.

The comments will also be of interest to Unilever's peers. Some, like Unilever, have been at the forefront of pushes to develop more sustainable businesses. To hear the company provide some indication its efforts can help growth will be heartening. For companies that have so far spent less time and resources on sustainability, Polman's remarks could help them become more engaged in areas where there are increasing signs consumer interest is growing.

As for the latest on Unilever's Sustainable Living Plan, the company said it was making "promising progress" within its supply chain, with, for example, over 55% of its agricultural raw materials now "sustainably sourced". The company has set a target for that to reach 100% by 2020.

Unilever admitted the "consumer element" of reducing its environmental impact "remains more challenging". The company said the "greenhouse gas impact per consumer use" had increased by around 4% since 2010, partly as a result of its acquisition of shampoo business Alberto Culver. It noted the "water impact per consumer use" has reduced by around 2%.

The group recognises its work in its own supply chain is a necessary task but not the only way to engender real change. Encouraging consumers to act will be tough. Unilever has looked at ways to prompt changes in consumer behaviour, with its Project Sunlight marketing campaign in late 2013 an example. More work in this area is needed.

Polman is seen in the consumer goods industry as one of the more vocal CEOs on sustainability and, under his stewardship, the company will push on with its efforts. Today's comments on the impact on Unilever's top line may encourage others to join the business on its challenge.

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