Unilever’s climate-proofing strategy

Student comments on Unilever’s climate-proofing strategy

1. November 26, 2017 Monika says:

   Unilever has recognized that the long-term viability of the business depends substantially on managing climate change. However, many companies still struggle to take the long-term approach and sacrifice short-term gains.

   I believe that in order for companies to implement climate-proofing strategies, sustainability performance metrics should be included as part of the compensation. This would provide incentive for leadership to think not only about short-term results, but about the future of the business [1]. Additionally, the cooperation between companies and their suppliers would be the key driver to encourage smaller players to think about climate. Large companies, such as Unilever, have strong bargaining power and can influence their supplier to implement practices that protect the climate. Unilever, could work with its competitors e.g., P&G or Mars, to define industry standards for climate change practices.

   [1] PwC. “Retail & Consumer Insights: Megatrends in the retail & consumer products industry”. (June 2015). Available online: https://www.pwc.com/us/en/retail-consumer/publications/assets/rc-insights-climate-change.pdf
2. November 29, 2017 Shaira Bhanji says:

   Unilever can make climate change an opportunity to generate value by using more recycled materials and providing cash back or discounts to those retailers who return recycled goods to Unilever. Retailers could in turn provide a discount to consumers who return used Unilever product packaging to stores for distribution back to Unilever and eventual recycling. This creates value for retailers and consumers via discounts, and it also creates value for Unilever in potentially reduced costs of materials.

   Unilever has a large platform by which it can motivate organizations and governments to act against climate change. One way in which it might more effectively do so is by hiring celebrity spokespeople who have good relationships with the countries in which Unilever is negotiating.
3. November 29, 2017 Andre Romelle Young says:

   I found the idea that nearly the enterprise value of CPGs to be driven by expected future growth to be very interesting. A lot of the strategies the traditional CPGs and Unilver have historically taken have been on the back-end – from procurement to operations to distribution – I’m curious if these companies, particularly with their marketing might, can do more to impact end consumer behavior. They have a keen understanding of order frequency and behavior, and have nudged consumers along the way to buy more, trade up, etc. I wonder if they can’t put those same learnings and capabilities to helping consumers trade off between more and less environmentally friendly behaviors.
4. November 30, 2017 Victor Oliveira says:

   Great article! It is really interesting to see a large company such as Unilever actually taking steps to address climate change issues that are so relevant today. I am, however, a bit skeptical to which extent this is a real policy that permeates throughout the company and goes all the way to the individual brands or just a PR stunt. Because of the decentralized model Unilever has, actually enforcing that the individual business units and brand implement and prioritize climate change related initiatives is really daunting. As conscious consumers, it is our job to verify if Unilever is actually living by the standards it has imposed on itself and held it accountable to achieve the long term goals it has set.
5. December 1, 2017 Meg Takada says:

   Gayathri, I learned a lot in how Unilever puts efforts to transform its supply chain to avoid the environmental risks. Thank you for your analysis and perspective! I was especially impressed to know that Unilever practices eco-efficiency methods in 263 manufacturing sites in 71 countries. Scaling the practice is hard given that the product processes can vary tremendously from countries to countries. I feel that the global scale of this effort makes them a committed leader in the industry for the environment.

   Regarding your discussion points in how Unilever can turn climate change into an opportunity for value generation, I think that Unilever, the leader of the CPG industry taking these measures to combat environmental risks is a competitive advantage. A lot of consumers are also now aware of environmental issues, and Unilever truly practicing these solutions is a way that they are leading a transformational change for the industry. As a consumer, knowing that Unilever carefully picks suppliers who pass their standard for sustainable practices is a way that I become loyal to the brand. Also, when Unilever invests in environmentally-friendly practices, this become an industry norm – other companies must follow the similar practices to well compete with the company. The impact Unilever puts to consumers and the industry is tremendous in my opinion.

   To your second question in how Unilever can inspire conversations and actions among organizations and governments who are indifferent to fighting climate change, this is a challenge that the private sector faces. One way is that Unilever can conduct a research in the eco-friendly supply chain model, and publish it to scale the practice and technology it employs. Leveraging the research team, this is the way to move the governments and other companies to start the discussion. It is a challenge to involve the governments to take actual measures, however, with other large companies in CPG joining Unilever, I think that the impact is elevated to involve the government.
6. December 1, 2017 Triston Francis says:

   Gayathri,

   I enjoyed reading your post. Unilever has been a topic of discussion in so many of our classes throughout the semester and it was interesting to learn even more about the company. Overall, I agree that Unilever is making commendable efforts to fight the climate change battle.

   I felt that the data that they are collecting on whether farmers in their channel are using sustainable practices is a compelling strategy. For this to be effective, they will need to gather a large amount of data for that information to be meaningful. In a nutshell, I would be doubtful of the success of this initiative; however, I am optimistic because I feel as though they have a thoughtful execution approach which they plan to use. I feel as though offering the tool for free makes their objectives a bit more feasible. I think that there will be a way for them to share some of this data with the user so that they are able to market the perks of collaborating with Unilever to focus on sustainability.

   The incentives of Unilever and farmers are aligned because both of their businesses are so deeply impacted by climate change. Unilever has scale which helps shield them from particularly negative things such as a natural disaster which happens with greater regularity these days do to climate change. Farmers don’t have that same scale and therefore the risk to their business is significantly greater and this will make them more inclined to form partnerships and collaborate with Unilever to de-risk their business.

   Overall, I have confidence in the scale and depth of relationships which Unilever has which I believe position them well to protect their company against climate change.
   Thank you for the very thought-provoking read. I hope that we have an opportunity to discuss further.

   Best,
   Triston