Gavin Neath is senior vice president for sustainability at Unilever, the British-Dutch consumer goods conglomerate. This morning, his company released a progress update for what it calls its “Sustainable Living Plan,” a soup-to-nuts sustainability strategy for the company.
We spoke to him about his company’s goals, progress and challenges around a more efficient way of doing business.
SmartPlanet: Let’s get right into it, shall we? You’re a consumer goods company, and there are several elements in your plan around health and wellness. But sustainability is also a business strategy. Where are the potential wins?
GN: We think the business case is very strong today and will get stronger and stronger into the future.
There is a small but growing minority of consumers who are increasingly becoming aware of, and interested in, how their products are sourced and made, and do they share the values of the companies making these things. We see this in countries all around the world. But normal rules of marketing apply: you still need to provide a really competitive product, at a really good price. But if you can do all that, and provide further benefit…
But I wouldn’t overstate the consumer case.
As you encourage people in your business to look at product development through the lens of sustainability, you open up all kinds of new opportunities and benefits. Products that wash clothes with less water. Products that use less energy. Products that are ethically sourced. We are getting big wins in our portfolio all over the world.
It’s also about market development, opening up new markets. We’ve been exploring the whole area of water scarcity, which has taken us into the market purification market, and which we wouldn’t have done otherwise. It’s doing very well for us in India, and we’ll roll it out elsewhere.
There is also a big cost-savings component. The more you say, “I’m going to manage my business sustainably,” the more money you save. Money does flow to the bottom line, quite quickly and quite a lot of it.
Finally, there’s your people. Business strategy aligns with personal aspirations. To have a business which is trying to do what it can is rewarding and inspiring for employees.
SP: Change like this doesn’t happen overnight, especially for a company as large as Unilever. What are the hurdles you face internally?
GN: It’s interesting how different functions of the business have taken to this. The supply chain and R&D functions have taken to it like ducks to water. They love it; they live it. These guys are going at it with real purpose and quite a lot of success.
The part of the business that has found it the hardest is the brand and marketing teams, largely because product developments in this area might not affect your market share. You’re doing this generally for the medium and long term — this is an agenda around foresight, and not consumer insight. Normally, [marketing teams] interrogate the consumer and do something in response to that. Here, you’re trying to imagine a product in 10 years’ time. That’s hard.
When you talk to a rural Indian consumer who has plenty of water today about a product that uses less water, they say, “We’ve got plenty of water at the moment.” The issue is, do we have the courage to launch some of these products in advance of the need being felt?
Leadership here is fantastically important, from the very top. My boss, Paul Polman, lives and breathes this agenda. It’s an interesting thing. Forgive me [for saying so], but I think this is an agenda that’s easier for an Asian or European CEO to get behind. It’s tougher for an American CEO because America is a country of plenty. You have an abundance of resources here: land, energy, water. It’s tough to look out the window and imagine something else.
SP: Given the demand in Europe and Asia, can you use that to sway your American colleagues? Perhaps they can be interested in more efficient products if overseas business units pay for it?
GN: That’s sometimes true, that innovations elsewhere can be seen as a benefit in the United States. But it’s important to say that, in the U.S., there are things going on here that are addressing different kinds of sustainability. Such as nutrition — eliminating trans fats, bringing sodium down, and so forth. There’s a higher awareness of that here. And that’s not to say the Americans are disengaged with [traditional sustainability] — in many cases they’ve led on the issue. But quite a lot of the leadership [in this area] has come from Asian, European and Latin American companies.
SP: This all makes sense from a business standpoint. Why bother calling it a sustainability plan when the term has the connection of only being “green”? Why not just call it a business plan, and get on with it?
GN: If Paul was here, he’d be nodding his head — you’re right. This is our business plan. This is how we manage the business.
It won’t be long before we completely drop [the term] and just say this is our business plan, and it just happens to be a sustainable one. Remember, we call it the “Sustainable Living Plan” — to help [consumers] live their lives in a more sustainable way. Why do we still do that, rather than integrating it now? I think that’s born out of a concern that if we did that, it would get lost in the great mass of detail that goes into the assessment of how a company like Unilever is doing. It’s brand, it’s cash flow, et cetera. Because this is so important now, we need to highlight and signal it clearly.
It won’t be long before we drop this. This is the way we do things. This is our business plan.