Unilever PLC (UL), the London-based conglomerate whose brands include Dove, Lipton, Slim-Fast, and Vaseline, undertook its first sustainable-agriculture initiative in 1995, says Gavin Neath, senior vice president of sustainability. The project entailed translating the concept of sustainability into a set of indicators related to several of the company’s key crops. These indicators included soil health and soil loss, pest management, biodiversity, and social and human capital, Neath explains. In 1996 the company published its first environmental report. Thanks to such efforts, Unilever was named food and beverage sector leader in the Dow Jones Sustainability Indexes for 11 consecutive years, according to the company. In 2005, Neath says, Unilever instituted Brand Imprint, a policy under which multidisciplinary teams evaluate the economic, social and environmental impact of every one of the company’s brands. Their reports are given to the respective marketing teams as fodder for brand strategy, he says, adding that sustainability sells. “Consumers are increasingly looking to buy from companies or brands that they see as being ‘responsible’ or ‘ethical,’” Neath points out, “so there is a business case for having a sustainable approach.”
Unilever also works with the Rainforest Alliance. The company announced in 2007 its commitment to having the conservation group assess the farming practices at Unilever’s 32,000-acre tea estate in Kericho, Kenya. Once the estate met the standards for Rainforest Alliance certification, the first certified Lipton tea bags hit store shelves in Europe later that year, Neath says, generating positive consumer response. The Rainforest Alliance Certified seal, he adds, also proved instrumental in Unilever’s winning a contract to supply tea for McDonald’s Corp. (MCD) in several European countries.
Boost Your Green ROI
1. Approach green projects as opportunities to develop new products and reach new markets, rather than as mandates.
2. Consider launching new sustainable goods and services in emerging markets, where the need is often highest.
3. Form genuine partnerships with respected environmental and social groups, and have them certify your products.
4. Tap into employees’ interest: They are the ones who will carry out the initiatives and spread the message.
5. Challenge yourself to develop products that require less water, fuel and consumables and to come up with new ways to create alternative energy.
Sources: AccountAbility, InnovaStrat Inc. and SustainAbility
Measuring Success
Every company that excels in sustainability, no matter the industry, has organizationwide commitment to the cause, says SustainAbility’s Lee. It isn’t enough, he insists, simply to create a series of socially and environmentally conscious initiatives and follow through on them; CEOs and other top executives must also establish sustainability as a metric by which every division within a company is measured. “Companies now face new economic challenges, social pressures and environmental threats. There is a new normal — and it’s not business as usual,” says Sunil Misser, chairman of AccountAbility, a global research and advisory firm that promotes sustainable development. “Businesses typically experience three stages in the sustainability life cycle: committing to compliance, integrating sustainability into the business DNA and changing the game. The performance leaders of tomorrow will have to do all three successfully.”
There’s also the question of how to measure ROI from sustainability ventures. Until now, says Lee, most corporate measures of ROI have taken the form of medium- to long-term assessments of operational efficiencies (such as reduced energy and water use) and reputational benefits (from becoming known as an earth-friendly company or having fewer incidences of labor-rights violations). But increasingly, he explains, companies are examining short- and medium-term benefits to their bottom lines, particularly those related to new markets that may be tapped by sustainability initiatives. And it’s not just consumers who are demanding sustainable practices. Sustainability demands on the part of business-to-business customers are growing now too, says Lee. Sustainability clearly has become a “differentiator,” as FedEx’s Jackson puts it, in the B-to-B world. “Companies want to do business with other responsible companies,” he says. “We certainly do.”
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