Can Unilever deliver Sustainable Consumption growth?


As an update to my earlier piece, “Will Unilever’s Sustainable Living Plan drive costs out?“, here are a few suggestions post the event on 24th April, that marked a special day for Unilever launching its first update on its Sustainable Living Plan and sharing its progress with the key stakeholders through out the world in Delhi, London, São Paulo, Washington and Rotterdam. I had the privilege to be a part of the Delhi’s event where Dr. Veerappa Moily, Hon’ble Minister for Corporate Affairs, and Nitin Paranjpe, CEO and MD of Hindustan Unilever Limited (HUL), unveiled the Unilever Sustainable Living Plan progress report for 2011.
The meeting had an overall feel-good factor associated with the release of the report with the underlying feeling coming out loud and clear – “Increased consumption” albeit a sustainable one as per Unilever. Reaching out to 30 million people with Lifebuoy soap hand washing program and reaching another 30 million with access to safe drinking water through Pureit, a in-home water purifier - calls for a stupendous increase in the sales of its products (but they do create a positive social impact). One of the major highlights of the progress is that Unilever has found a way to convert the massive sachet trash into energy.
Doubling the size of a business whilst halving the environmental impact is a fantastic goal to have. In fact, it is the holy grail of sustainability – if Unilever or for that matter any company is able to do that i.e, decouple growth with emissions, then the world would’ve solved the challenge of our times (temporarily).  It hinges on various factors – technology, economics and politics. All three need to gel well for the goal to be materialized.
As opposed to the common view, the challenge of sustainability is not the overpopulation in the developing world but over-consumption in the developed world. While it is worthy of Unilever to reach out in the BOP market and pull people out of poverty, give them access to health, hygiene and proper nutrition, what can a company like Unilever do to ask people to stop consuming in the developed world (read Patagonia’s “Don’t buy this Jacket campaign”) - after all we don’t need 30 varieties of toothpastes to brush our teeth with or another 30 varieties of soap to wash our hands with.
I’m not opposed to Unilever or any other company in this space - that’s their business and they do it really well! The question is when will this consumption-based growth model in the business world change?
When will we stop flooding our markets with products we don’t really need, and decouple growth with consumption?
In any case we look at, sustainable consumption will eventually reach its tipping point further straining our resources (even after sustainability gets embedded) because then that many people will have become “consumers” wanting to live like the developed world - only we will have delayed the problem a few more years. 
Anyhow, getting back to more pragmatic solutions, I think here are 7 suggestions that a company like Unilever can do with to deliver sustainable consumption:
  • Personal Carbon Allowance/Carbon labelling: Coca Cola and Carbon Trust are researching in this area whereby a company will  have a carbon footprint of each product printed on products for people to see their carbon use and enable them  to not exceed their own personal carbon allowance for the day. Read the report here.
  • Collaborative consumption and eco-system sharing of resources: Coke’s PET bottles instead of ending up as waste are sold to Patagonia as raw material for making their Polar fleece ( a classic Cradle to Cradle approach)
  • Decouple pay with performance and link it to sustainable habits (this is a big one – a challenge for HR guys)
  • Tackle Green-washing issue in the market (mis-leading consumers by printing false “green” claims)
  • Publish A+ GRI report: Quickly move from B+ GRI reporting to A+ rating (infact I was surprised when I found out that Unilever is a B+ reporter)
  • Renounce quarterly reporting: Use its clout and size to influence the media, government and industry at-large to do away with quarterly reporting (as it has done in creating MSC, RSPO etc.)
  • Mandate environmental reporting: Start reflecting the externalities caused by producing products (deforestation, floods, displaced communities, and even diseases caused by coming in contact with products) into their financials by creating a seperate cost category for environmental costs so that products and processes that have high environmental costs are not hidden from the decision makers – to help see where value is added and where it is destroyed (for example, use of Activity based costing)
These will also be shared with Unilever at their Sustainable Living Lab,  a 24 hour online discussion to be held on 25th April that will bring together a cross-section of people from governments, NGOs and businesses to contribute their thoughts and respond to ideas from others (dialogue facilitated by GlobeScan, an independent research consultancy). Lot of ideas will be generated, lot of suggestions will be put forth – but will they deliver sustainable consumption…that remains to be seen.
Contributed by: Pankaj Arora.
http://www.wikio.co.uk