Unilever CEO says company will double its growth with sustainable practices

You may have read about Ben & Jerry's commitment to using fair trade-certified ingredients in their ice cream or that Lipton has begun sourcing all of their tea from Rainforest Alliance Certified farms. But you may not have heard that Unilever is the company behind these common brands and their shift to sustainable practices.

CEO Paul Polman described Unilever's innovative business model, which launched in November, in delivering this year's Lewis H. Durland Memorial Lecture April 11 in Ives Hall. The company, he said, plans to double its growth while drastically reducing its environmental impact.

Unilever sells products in more than 180 countries, with yearly revenues of approximately $60 billion, he said. Its brands also include Vaseline, Dove, Suave, Axe and Breyers, among others. An estimated 2 billion people use Unilever products each day.

"Many of these brands have been around for decades," Polman said. "What has to be done to ensure that these brands remain relevant?"

In light of what economists call a "VUCA" future (volatile, uncertain, complex and ambiguous), organizations must adapt, he said, "not by seeking to predict the future [but] by identifying the major trends."

These trends, he said, include a shift of economic power to the East, where India, China and Russia have become increasingly powerful and continue to churn out high numbers of students in such fields as engineering. He also cited a shift of power to the consumer, due to digitization and an emphasis on collectiveness among consumers.

"India already is the country that has more mobile phones -- 500 million of them -- than they have toilets," he said.

However, Polman acknowledged that the most important trend is the scarcity of resources like food and water as the population grows.

"By 2050, there will be 2.7 billion more people on the planet," he said. "[That's] the equivalent of two Indias, or an India and a China. And I'll throw an Indonesia in there for free -- since we're in consumer goods, we like to do that."

Polman discussed plans to improve sustainability and become more socially responsible, while expanding into new market segments. Additionally, he said, the company recently stopped quarterly reporting and decoupled its compensation plan in order to emphasize longer-term goals.

"Now more than ever, I believe that businesses need to connect their financial success [to] societal progress," he said. "We're moving into an age where society and the environment are shifting from being servants of the economy to the economy itself being a servant of society and the environment."

Unilever's new model covers all of its brands and countries, but it also deals with "social and economic dimensions," Polman noted. By 2020, the company aims to halve its agricultural footprint, help 1 billion people improve their health and well-being and source 100 percent of agricultural raw materials sustainably -- a "tough challenge," but one that Polman is "fairly confident" can be accomplished.

"Business will have to change very fundamentally in the next decade," he said. "We cannot continue to steal from generations to come."

The Lewis H. Durland Memorial Lecture is sponsored by the Johnson School.

Olivia Fecteau '11 is a writer intern for the Cornell Chronicle.

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