Unilever Sustainability Goals

Unilever CEO Embraces Sustainability, Long-Term Profits

Written by Green Chip Stocks
Posted April 26, 2012

Unilever’s (NYSE:UL) Paul Polman isn’t like other CEOs. While some CEOs have been justifiably harangued for taking enormous bonuses from bailout money or engaging in other questionable financial activities, Paul Polman is taking the high road.

As reported in the Guardian UK, Polman has bucked the trend of some CEOs being closed off and selfish, saying publicly that NGOs, business leaders and politicians should be working in concert to address environmental and social challenges. This message comes just as Unilever is about to unveil the first update of the company’s Sustainable Living Plan.

The Sustainable Living Plan was launched in November 2010. Unilever’s goal with this plan is to double sales while cutting its environmental impact of its products in half.

Polman has stated the company will reach its goal of using 100% sustainable palm oil by the end of the year. And in just 12 months, the total agricultural raw materials sourced sustainably have doubled to 24%.

Polman has set some pretty honorable and lofty goals for his company, recently saying, “When we look at our supply chain, we think about smallholder farmers, we think about women and employment, we think about land rights, we think about biofuels and because we think about this holistically, our plants are getting better, our sourcing is getting better, these communities have a chance of functioning.” This may sound ambitious, but Polman doesn’t believe he is over ambitious at all.

Polman has also lambasted other companies that claim shareholders demands for short-term profits have made it hard to change their ways. Polman stated, “I don’t think our fiduciary duty is to put shareholders first. I say the opposite. What we firmly believe is that if we focus our company on improving the lives of the world’s citizens and come up with genuine sustainable solutions, we are more in synch with consumers and society and ultimately this will result in good shareholder returns.”

An interesting aspect of Unilever under Polman has been how he approaches investors. Rather than focusing on short-term investors, Polman has been actively approaching long-term investment funds to buy the company’s shares. Under his watch, Unilever’s shares by hedge funds has dropped to just 5%, down from 15% just three years ago. By doing this, Unilever’s share price fluctuations have been minor.

Polman’s methods aren’t universally understood. Recently, when asked about his business model he said, “Does everyone get it in the City? No, and to expect it will ever happen is wishful thinking but investors will increasingly value our business on the basis of what we are doing. It is starting to happen.”