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October 13, 2009

WORLD: Sustainability agenda must improve – Unilever

The food industry needs to transform its strategies on sustainability to more effectively tackle issues like climate change, the chief executive of Unilever claimed today (13 October).

The food industry needs to transform its strategies on sustainability to more effectively tackle issues like climate change, the chief executive of Unilever claimed today (13 October).


Paul Polman said each company’s “sustainability agenda” remained vital even in times of recession and, in particular, he urged business to address their use of natural resources in a “fundamental way”.


“It is no longer enough to rely on eco-efficiency programmes in our factories, video conferencing facilities to reduce travel or simply carbon offsetting schemes,” Polman told a conference held by the IGD in London. “Important though they are, they will not bring about the level of change that is needed. We have to find a way of decoupling growth from the environmental impacts.”


The Unilever chief acknowledged that there was no “master plan” on the issue of sustainability and admitted that the Anglo-Dutch conglomerate would need to overhaul its business.


Polman added that the company would look to improve its record on sustainability by expanding its procurement of environmentally-friendly commodities.


“We’re taking big initiatives in our agricultural supply chain. We are publicly committed to sustainable tea and sustainable palm oil and we have plans to ensure that all of our crops will be sustainably cultivated by 2015,” Polman said.


Unilever has had a mixed 2009. Price cuts helped Unilever revive volume growth in the second quarter of the year although operating profit fell.


Nevertheless, analysts have expressed confidence in Polman’s strategy and the Unilever boss said the Wall’s ice cream maker’s ability to increase R&D and advertising investment amid the downturn was “the exception” in the industry.


Polman also stood firm on Unilever’s recent policy not to issue annual financial guidance for 2009, which when it was revealed in February, had hit the company’s shares.


“We freed Unilever from the tyranny of offering guidance to the market. Eyebrows were certainly raised at the time …  however, I believe it’s the right thing to do to manage the business for the long term and not to chase our short-term tail. I believe that this got us into trouble in the first place.”

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