Sustainability ‘contributes to the bottom line,’ Unilever CEO says

As the backlash against ESG takes an ideological turn, Unilever CEO Alan Jope rejected the idea that sustainability is a distraction from core business fundamentals.

In fact, he said, the two are linked.

“We’re not an NGO,” the CEO of major brands like Dove soap and Hellmann’s mayonnaise told Yahoo Finance Live (video above). “We are a for-profit organization. And the reason we care so much about sustainable business, B Corps and other expressions is because we believe it contributes to the bottom line. We are seeing that our brands that offer consumers a sustainable choice are growing much faster.”

Unilever CEO Alan Jope speaks at the Clinton Global Initiative, Monday, September 19, 2022, in New York. (AP Photo/Julia Nikhinson)

Earlier this year, Unilever’s main shareholder and Fundsmith founder, Terry Smith criticized the consumer packaged goods company for sticking to sustainability, saying, “In our opinion, a company that feels it has to define the purpose of Hellmann’s mayonnaise has clearly lost its way.”

Jope, for his part, said disgruntled investors like Smith are in the minority: “We overwhelmingly listened to shareholders and board members, all of our board members, to stay the course,” he said.

Unilever began cleaning up its sustainability reputation in earnest in 2010 when former CEO Paul Polman unveiled the company’s Sustainable Living Plan (USLP) amid growing awareness of climate change and the company’s lackluster performance on climate change. with competitors like P&G.

By 2020, the company made significant progress towards a number of its goals, such as the sustainable sourcing of palm oil and cocoa, but fell short on several others, such as its goals to reduce waste and greenhouse gas emissions.

Dove, a Unilever brand, is displayed at a store in Manhattan, New York, U.S., March 24, 2022. REUTERS/Andrew Kelly

Dove, a Unilever brand, is displayed at a store in Manhattan, New York, U.S., March 24, 2022. REUTERS/Andrew Kelly

Under Jope, Unilever reiterated its commitment to a purpose-driven strategy by instituting the Compass program, which serves as the next phase of the company’s sustainability plan. That vision establishes that Unilever will achieve an absolute reduction of 100% of its emissions in its operations by 2030 and zero net emissions in its entire value chain by 2039, among other goals focused on nutrition, health and diversity.

Jope has championed this mission since taking office in 2019. Although he plans to retire next year, he suggested the company will not back down on its goals, especially as the effects of climate change continue to add risk to business operations.

“We have removed €1.2bn of costs from the business through sustainable sourcing,” said Jope. “We know that it reduces risk. A world on fire or under water is not a great place to sell soap or soup.”

Grace is an editor for Yahoo Finance.

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