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Over the past decade perhaps no major diversified consumer products company has done more to burnish its sustainability credentials than Unilever, the 91-year-old conglomerate that owns brands ranging from Dove soap to Lipton tea to Ben & Jerry’s ice cream. A driving force behind this shift was Paul Polman, who took the helm of the British-Dutch company in 2009 and led it to declare a goal of decoupling its environmental impact from its growth.
That Unilever emerged as a globally recognized leader in sustainability may seem surprising given Polman’s pedigree — as an seasoned executive at Nestlé and Procter & Gamble he wasn’t known for greenery going into the role. But early in his tenure at Unilever, he make bold and unconventional moves that seemed heretical to some investors accustomed to a focus on short-term profits. Polman stopped issuing quarterly guidance, warned that climate change was costing Unilever hundreds of millions of dollars annually, began requiring suppliers develop plans to eliminate deforestation from their supply chains, and acquired companies known for their eco-friendly approach, including Seventh Generation, Schmidt’s Naturals, and Tazo tea. One of his biggest moves was to establish the Sustainable Living Plan, a blueprint to move Unilever toward more planet-friendly growth, including shifting to 100% renewable energy supply, substantially reducing plastic waste and water use, achieving a deforestation-free supply chain by 2023, and pressing world leaders to adopt the Paris climate accord.
These decisions weren’t always welcomed by Wall Street and in February 2017 Polman faced his biggest test when Kraft Heinz made a $143 unsolicited billion bid for Unilever, which valued it at an 18% premium on its then stock price, a tempting offer for investors, but one that could have driven a sharp shift for Unilever. The two companies couldn’t be more different in terms of their sustainability strategy: while Unilever had distinguished itself on its environmental performance, Kraft Heinz was ranked among the companies least committed to sustainability, according to CERES, a shareholder advocacy nonprofit that pushes corporations to adopt robust corporate social responsibility policies. Unilever quickly rejected the offer.
Since then, the financial fate of the companies has sharply diverged, with Kraft Heinz’s stock plunging 67% and Unilever’s climbing nearly 50%. Polman chalks this up to the company’s different approaches.
“Creating value for a few billionaires is not the answer to today’s challenges,” Polman told Mongabay. “The difference between the two models is stark. I described it at the time as creating value through values, versus pursuit of value at any cost. The battle between a few billionaires and our model of serving billions of people. If you look at their valuation today, it seems the financial markets have also caught on.”
Polman says the metrics of success need to be more than a company’s stock price.
“Business can in fact be a tremendous force for good and make a huge contribution to solving the biggest problems facing our people and planet. Actually, this is the only way for business to be accepted in society and it should always strive to have a net positive impact.”
Polman is now working to drive this mindset among a wider range of companies via IMAGINE, a social venture he co-founded with Valerie Keller, Jeff Seabright, and Kees Kruythoff, colleagues at Unilever who helped engineer the company’s sustainability transition. IMAGINE’s mission is “unleashing business to achieve our Global Goals” including addressing the climate crisis and widening inequality.
During an October 2020 conversation with Mongabay founder Rhett A. Butler, Polman talked about his career at Unilever, IMAGINE, and the need for transformative change to tackle critical challenges facing the planet.
