Learning from Unilever - the impact of sustainability

Jan 2017

BY Duncan Carmichael-Jack

Over the last decade something exciting has been happening in the world of startups. Many big businesses have been publically criticised for crossing the line. Smaller counterparts set up to exploit their downfalls and make a fast buck have become ineffective. Instead, the public’s desire to purchase socially viable goods from fair businesses has not just changed the marketplace, it has created a new one. Big firms are adapting and startups with a responsible and ethical approach to their operations have seized this opportunity resulting in sustainable entrepreneurs who are now thriving.

According to Social Enterprise UK, businesses with a sustainable focus now outperform their mainstream small and medium sized counterparts in almost every key business metric. This includes turnover growth, start-up rates, diversity of leadership, innovation, workforce growth and business optimism. Whilst it is very encouraging to see that their ethical approach is beneficial, we believe those at the helm should be able to integrate their sustainable perspective into every other part of their lives too. Their investments should be no exception.

We are seeing an increase in clients wishing to invest into companies and sectors that have a positive impact on the environment, rather than just looking to avoid companies that do not fit with their individual ethical values. Looking at the positive effects that a business has on our planet can be anything from developing new waste technologies to enhancing the use of renewable energy.

Unilever provides an inspiring example of a sustainably focused business. Despite being a giant it is progressive and is leading the way on sustainability for other businesses to follow.

Under the leadership of Paul Polman, Unilever is now widely viewed as one of the most sustainable companies in the world. Not only has it sought to find ‘purpose’ across its brand offerings, the company has also made some impressive commitments on its own environmental impacts over the past five years.

Unilever has set ambitious environmental goals as part of its Sustainable Living Plan:



- Halve the greenhouse gas impact of its products across their lifecycle by 2030.
- Halve the water associated with the consumer use of its products by 2030.
- Halve the waste associated with the disposal of its products by 2020.
- By 2020 it aims to sustainably source 100% of its agricultural raw materials.

The company has also announced that it intends to become carbon neutral by 2030, reducing the energy it consumes and using more renewables to lower their total carbon footprint

Apart from the energy and associated emissions from operations, Unilever’s other main impacts come from raw material production in the supply chain. Unilever is the world’s largest single purchaser of palm oil, and has set a goal of reaching zero net deforestation by 2020 for its palm oil. This goal has also been set for soy, paper, board and beef. Unilever buys about 3% of the world’s total production of palm oil and about 1% of global soy. Shifting to 100% sustainable sourcing is a major impetus for sustainable development in these supply chains.

Another impact is waste production, which the company is also aggressively targeting, with a 97% reduction in waste per tonne of production since 2008 and 600 sites now sending zero non-hazardous waste to landfill.

Additionally, the company aligns its aims with the UN Sustainable Development Goals, an increasingly popular signal to responsible investors that the company is moving in line with global trends towards sustainable development.

Furthermore, Unilever has been successful in reducing the negative impacts associated with its core business activities. The targets set by Polman illustrate the group’s intentions to further reduce their carbon footprint and eventually have a net positive environmental and social impact. For such a substantial and global company, the fact that this is a commercially viable objective is exciting. Unilever sets a great example and with a 44% total return since the beginning of 2014, the positive impact it has also had on portfolios is clear.