Purpose and profit: Unilever on how to drive benefits across the triple bottom line
Last summer, the chief executives of more than 180 corporates signed a declaration stating that the purpose of big businesses is no longer to simply generate profit for shareholders - that action must also taken to address social and environmental issues. But how can businesses without purpose "built-in" begin this transformation?
That was the big question tackled by Unilever’s global vice president for sustainability Karen Hamilton during her keynote speech at edie’s Sustainability Leaders Forum.
Hamilton took to the stage at both a crucial time for Unilever – the business has just merged its sustainability and commercial strategies for the first time, after surveying all of its employees for their input on its future sustainability work – and for big businesses more broadly.
The realisation that current economic systems are contributing to climate change, biodiversity loss and social inequality is growing. Last year saw 192 CEOs sign a statement saying the purpose of a corporation must be redefined in order to prioritise positive social and environmental outcomes alongside profits; the Financial Times begin lobbing for “new capitalism”; and businesses give their backing to school climate strikers for the first time.
For Unilever, this realisation is not new, Hamilton explained. 2010 saw the company update its vision statement from “make cleanliness commonplace” to “make sustainable living commonplace”.
Five years later, it set about identifying brands within its portfolio which could be dubbed “Sustainable Living Brands” – those which were addressing one or more social or environmental issues through their scale, partnerships and advocacy.
Unilever identified a total of 18 brands and, over the course of a year, documented how this cohort were collectively growing 30% faster than the rest of the business on a year-on-year basis. Fast-forward to June 2019 and that cohort had grown to 28 brands, collectively growing 60% faster than Unilever’s total portfolio.
“We’re really seeing growth from this platform, and I think that’s an important emphasis to make – we’re looking for win-win solutions,” Hamilton said, arguing that moves which delivered positive environmental or social impacts at too much of a detriment to Unilever financially would ultimately serve to limit its reach in the long-term.
“All brands have a position – something they stand for. But, typically, that position is about meeting an individual or personal need.
“While that’s important and right, purposeful brands need to address an issue in society at large, and one which is really relevant to its target audience.”
Walk the talk
When asked how, exactly, Unilever determined which of its brands fit the Sustainable Living criteria, Hamilton said they are “not necessarily founded on a specific purpose” but “moving in the right direction”.
She noted that some brands have an obvious “functional” purpose that aligns with one or more of the UN’s Sustainable Development Goals (SDGs) – anti-bacterial soap brands, for example, inherently further progress on SDG 3, Good Health and Wellbeing, and SDG 6, Clean Water and Sanitation. But brands lacking this purpose could often be used as a vehicle for “a much more emotional” purpose, Hamilton argued. For example, Unilever has been running public communications campaigns around gender equality and self-esteem through Dove, its largest brand, for several years.
We were so proud to have @aerie join us at our #GirlCollective kickoff event in LA last weekend. We've been big fans of their #aerieREAL campaign and are excited to welcome them to our Sisterhood to raise the self-esteem of women and girls everywhere! #DayOfTheGirl pic.twitter.com/Nqz65CmXbV— Dove (@Dove) October 11, 2018
Whether the purpose of a brand is realised through its function or emotional appeal, Hamilton’s top tip was to ensure that all communications of purpose – to investors and consumers alike – are backed up by evidence that it is making a “real” difference in the context of its size.
“Our brands say, but they also do,” she said. “Talking without walking is purpose-washing, or, as our chief executive Alan Jope has called it, woke-washing.
“Tackling issues like gender equality has to cut across our value chain. Our business has to employ a balanced workforce, but we also have to look upstream – to our smallholder farmers and tea estate workers – and downstream, with our entrepreneurs and brands.”
Beyond walking the talk and avoiding greenwashing, Hamilton set out a clear plan for businesses looking to embed purpose in their brands and communicate that message externally.
She urged listeners to first secure top-level buy-in for three “core beliefs”: Brands with purpose grow; companies with purpose last; people with purpose thrive.
Evidence of these claims can be found in the latest research by the likes of Edelman and Kantar, Hamilton noted, highlighting research linking purpose-led business to benefits such as increased brand loyalty, lower staff turnover and higher staff engagement.
Once the C-suite is on the same page, Hamilton said, sustainability professionals and heads of brands can then collaborate to ask what issue in society their brand is best placed to tackle, and what action they could take to tackle these problems holistically.
For Unilever, action is always realised across three key pillars:
- Advocacy (how the brand can lobby policymakers, rally consumers around a cause, and so on)
- Partnerships (which NGOs, charities and other bodies the brand can support and learn from)
- Scale (how the brand can use its financial clout or reach to drive progress beyond its own operations).
As an example, B-Corp ice-cream brand Ben & Jerry’s uses its scale to inform customers of campaigns on social and climate justice, often through limited-edition flavours and on-pack communications, coupled with blogs and social media campaigns. It partners with non-profits to share expertise, provide funding of its own and connect customers with donation platforms. And, once data is collected from these activities, a petition or letter is usually sent to lawmakers. Issues that Ben & Jerry’s has taken a stand on to date include wind energy policy in the UK, refugee rights in mainland Europe and prison system reform in the US.
Bringing purpose home
While this model covers the first two of Unilever’s three core beliefs, Hamilton was keen to point out that the business views purpose as equally crucial to individuals as it is to brands.
She highlighted the importance of realising that not all people started their brands or chose their role with purpose in mind, but that all employees have the potential to drive progress towards one or more “big issues” in their day-to-day work. Procurement and design teams, for example, are fundamental to meeting any business’s resource targets.
“We’ve been thinking, quite profoundly, about how we can help all of our employees to find their own purpose,” Hamilton explained, outlining how this thinking had led to an “experiment” within Unilever’s UK arm, whereby small groups of staff took part in workshops to brainstorm around their passions and how they could deliver them at work.
Like Unilever’s recent work to help staff co-create new environmental ambitions, the activity proved a success and will have been offered to more than one-quarter of the firm’s 172,000-strong workforce by the end of February.
Hamilton advised those looking to run similar initiatives to ensure that they are “home-made” – developed for staff, by staff – and that they are the start, not the end, of a process. Companies looking to run these workshops should be prepared to upskill or re-skill staff on the basis of the results, she concluded, and to help them find further external opportunities if necessary.