- July 27, 2015
- 9:23 am
- John Caltagirone
- no comments
Unilever Mission to Humanize the Supply Chain
Traditionally companies have adopted shareholder strategy in their approach to maximizing their profit and satisfying stockholders. But with growing corporate scandals and unethical decisions being made daily by corporate leaders, a general sentiment of corporate social responsibility has been slowly shifting to the forefront and abandoning a “slave” model of please shareholders.
Paul Polman, Unilever’s CEO, recently announced to stockholders that they should no longer expect quarterly annual reports from the company. He urged stockholders to put their money somewhere else if they were not looking to “buy into this long-term value-creation model, which is equitable, which is shared, which is sustainable.”
After Polman was appointed CEO, one of his first initiatives was the creation of the 10-year Unilever Sustainable Living Plan, which aimed to separate the company’s growth from the company’s environmental footprint by doubling the revenue, cutting the footprint in half and having ALL its raw materials sourced sustainably. Ambitious and gutsy, unfortunately it wasn’t successful, but Polman exclaimed it wasn’t initiated to be successful instead to create a “shift in people’s mindsets.”
By no means was this unexpected either coming from Unilever. The consumer brand company has always proactively and openly created initiatives to drive corporate social work. From delivering products that inspire consumers to be healthier to reducing their CO2 emissions throughout their supply chain. They are the model stakeholder strategy, working for not only shareholders, but customers in developing nations and working alongside environmental activists. In April, Unilever announced its partnership with Global Citizen and Live Earth, both of which target issues related to sustainable development on behalf of the UN Climate Change Conference.
Moving forward Polman aspires to inspire long-term thinking for all stakeholders. Moreover he sees that this proposition is the responsibility of the CEO, the C-suite, to create and maintain a company that serves society, not only itself. He defined short-term decisions as being the driving force of making bad decisions, cutting investments in human capital and ultimately hurting the company in the long-term.
Now the question is what does this have to do with supply chain? In a sense, almost everything. Polman articulated the changing livelihood of society and as a result the sustainability goals. “There are 200 million people unemployed, many young people; over two and a half billion people in marginal jobs. Social standards are not in the value chain what they should be.” Such thinking and understanding of a consistently changing public, has been evident in they way companies source. In 2009, only 10% was sustainably sourced by Unilever and now almost 60%. This has also impacted the company positively from a financial lens. Polman believes that approaching the issues of climate change now will only reduce costs in the future.
A step forward Unilever actively engages with youth by creating a young social entrepreneurs award for social entrepreneurs that are participating in the Unilever value chain and innovating and improving it for the better.
Without a doubt, Unilever is a shining model in creating value in the supply chain. Impeccable leadership and courage hopefully will maintain and in some segments restore consumer confidence in Unilever and its bright future.
-Riti Patel, Assistant, Supply and Value Chain Center
Source(s):
Boynton, Andy. “Unilever’s Paul Polman: CEOs Can’t Be ‘Slaves’ To Shareholders.” Forbes., 20 July 2015. Web. 24 July 2015. http://www.forbes.com/sites/andyboynton/2015/07/20/unilevers-paul-polman-ceos-cant-be-slaves-to-shareholders/