Unilever Plc’s Alan Jope has a message for business leaders across the world: stop using costs as an excuse to shy away from making your companies more sustainable.
“We got to get out of this thought that sustainable business is costly,” the chief executive officer at the maker of Dove soaps to Magnum ice creams said during a panel discussion at the World Economic Forum 2022 in Davos. “It is in some places, but net-net we’ve saved $1.2 billion just by getting on to efficient energy early.”
Unilever’s investors, Jope said, have exhorted them to focus on sustainability as a core part of business. And there are “hard commercial” reasons for them to do so.
“Unilever is not an NGO. We are a commercial organisation and we are finding more evidence that consumers, particularly young people, are making brand choices based on social and environmental impact,” he said. “Our sustainable brands, that outperform on environment and social, are growing much faster than the rest of our portfolio.”
Another compelling reason for companies to improve their sustainability quotient is that it will become harder to acquire talent if they don’t do so, he said. “Try attracting people to join your organisation if you’re not clear on what you stand for.”
The consumer goods maker has set a target to achieve net-zero emissions for its own operations by 2030, and have its entire supply chain be net-zero by 2039. The plan entails a 100% reduction in emissions from direct and indirect sources from 2015-levels by the turn of the decade. It wants to halve the carbon footprint of its products during the same period.
Jope said eventually consumers will start making informed choices on the sustainability impact of the brands they are buying. And that is what will move the markets.
“Think about it, 20 years ago none of us cared much about kilo calories. But now you look at a pack and see it very clearly. 50 kcal is not too bad, but 500 kcal on a product and you’ll think twice about it,” he said. “We need to do the same for carbon. Let consumers make the choice about the carbon impact of their decisions.”
The CEO called for standardisation in the way products are labelled to clearly spell out the carbon impact of each one of them. “The market will move towards low-carbon alternative. The final flush will be when end users make those decisions.”