Unilever buys a lot of palm oil and its derivatives: about 1.6 million tonnes, roughly 4 percent of the world's supply. But as demand for the vegetable oil increases, room for plantations has often come at the expense of rainforests. So the consumer products giant decided to take a stand, announcing in May that all palm oil it uses will be certified sustainable by 2015. The move reflects Unilever's belief that its long-term growth is tied to a sustainable future for the planet and its people, says Gavin Neath, senior vice president of communications and sustainability. As the sustainability philosophy becomes embedded in the company's strategic vision, Unilever is also changing the way it manages and measures project success. Mr. Neath recently discussed the shift.
How does Unilever's commitment to sustainable development fit into its overall business strategy?
More than two-thirds of Unilever's raw materials come from agriculture, so it is of crucial importance to ensure continued access to our key agricultural raw materials. Ultimately, our long-term aim is to buy all our agricultural raw materials from sustainable sources.
Changing weather patterns, water scarcity and unsustainable farming practices could have an impact on our business by threatening the long-term sustainability of agricultural production. Also, where agricultural products come from and how they are grown are issues of concern to consumers, governments and campaigning organizations.
People are looking to companies to take responsibility for these issues in their supply chain. This is consistent with our own approach and the commitments we have made in our Code of Business Principles and Business Partner Code. Failure to act on these issues is not only an operational risk but can be a source of reputational damage.
Our advice would be to focus on how sustainability can most effectively be integrated into normal business practices.
Has Unilever's commitment to sustainability altered its approach to project and program management?
It has already changed the way we do business in several ways, including how we govern projects and programs. One area where this is the case is the Brand Imprint tool, which makes brand teams look at their brand through a sustainability lens. This, in turn, involves engaging with external stakeholders that brand teams have not engaged with before, providing new ways of looking at things, new ideas and new ways of working.
Today's societal and sustainability challenges cannot be addressed by one actor alone. There is a need for all relevant actors to work together. This also means we increasingly engage with external partners. In some cases, this engagement has been institutionalized. For example, we have formed a Sustainable Agriculture Advisory Board, which comprises individuals from research institutes in the voluntary sector, academia and non-governmental organizations. Members advise on our overall approach, as well as the standards for Unilever's selected key crops.
What direction would you offer to companies looking to develop sustainable business practices?
Our advice would be to focus on how sustainability can most effectively be integrated into normal business practices. How this can be done depends on the business sector and type of business, and therefore there is no one single approach that we would recommend. In our case, it was crucial to find a way to integrate social, environmental and economic aspects into our brands. Other companies may need a different focus. PM
OCTOBER 2008 PM NETWORK