Tag Archives: Unilever

Could business hold the key to universal access to safe drinking water?

Imagine a life without safe drinking water. It isn’t easy. Most of us take for granted that we can just turn on a tap and fill a glass. But that’s not an option for roughly one in four of the world’s population — the 2.1 billion people who still lack access to safe drinking water today.

With half of all hospital beds in low-income countries occupied by people with water-borne diseases, it’s hard to overstate the importance of reaching the UN Sustainable Development Goal of equitable access to safe, affordable drinking water for all by 2030.

While the current rate of change isn’t fast enough to hit that target, some fantastic research by EY’s Wayne Simper suggests grounds for optimism, thanks to the growing number of impact entrepreneurs innovating new models for the scalable and sustainable provision of safe water in underserved communities.

That story of optimism is one that Unilever and EY were shouting loud and proud at World Water Week in Stockholm, late last month, drawing on a joint report based on Wayne’s insights, and which I had the pleasure of writing.

Co-signed by Kees Kruythoff (President, Home Care, Unilever) and Alison Kay (Chair of the EY Global Accounts Committee), How can a trickle become a torrent? shines a light on the critical factors influencing impact entrepreneurs’ ability to build truly scalable and self-sustaining Safe Water Enterprises (SWEs) with the capacity to bring safe drinking water within reach of hundreds of millions more people.

The market leading SWEs, analysis of whose businesses forms the basis of the report, are already serving more than 15 million people across Africa and India, and we may only have scratched the surface of what these, and others like them, could achieve with the right focus and support. Wayne’s research and analysis suggests this rests on recognizing three things above all:

  1. That the high fixed costs inherent in any SWE operating model mean that only SWEs that operate at scale can achieve true sustainability
  2. That there’s no “ultimate” SWE model that works best in all circumstances, which means that the path to scale depends on finding the best fit to a particular blend of market conditions
  3. That we need investors who are prepared to take a more balanced view of SWEs’ potential to generate returns — from a social impact as well as financial perspective — so as not to overlook promising and scalable models for safe water provision

Picking out just one of these themes, to give you a flavor of the kind of insight you’ll find in the report, it’s worth taking a closer look at the third point.

We’ve all seen the power of a “magic metric” to galvanize action, a prime example being how a single piece of data such as grams of carbon dioxide emitted per kilometer (gCO2/km) has transformed perspectives and behaviors across the automotive industry. The report introduces a new one that has the potential to create a similarly seismic ripple effect: Impact Return on Capital, or IROC for short.

In the case of safe drinking water, this metric represents the number of daily water consumers whose needs can be served per thousand dollars of invested capital. It’s an important measure because it opens up an entirely new way of looking at the capital efficiency of SWEs — one that properly takes into account the purposeful trade-offs these life-changing businesses make, often intentionally running close to breakeven in order to keep prices low and make safe drinking water as affordable as possible.

With innovative SWEs clearly so vital to reaching the SDG target of equitable access to safe, affordable drinking water for all by 2030, we can’t afford to overlook any model with the potential to accelerate that access. Combined with more the more traditional measure of Return on Invested Capital (ROIC), IROC paves the way for a more holistic approach to building and evaluating investment cases that can help guard against this eventuality.

For more on this and other insights for accelerating growth of SWEs, I urge you to read and share the full report. The health and wellbeing of more than 2 billion people could depend on following the advice within its pages.

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Building a better working world: Unilever style

As regular readers will know by now, I have a massive man-crush on Unilever CEO, Paul Polman (and not just because he was kind enough to say something nice about my book!).

Here’s a leader who really gets new-world sustainability – a world in which Corporate Responsibility/Corporate Sustainability (whatever you choose to call it) is indistinguishable from business strategy, based on the knowledge that best prescription for long-term success these days is making a positive social impact on the world.

Among many memorable quotes from a speech of his I attended a few months ago, as part of Hult Business School’s Visionary Speaker series, was his assertion that “I don’t believe that any brand should be there, if it doesn’t serve a purpose that actually makes this a better world.”

For a window into how this translates into action – how Unilever is connecting every one of its brands to a higher social purpose – there’s no better example than this video for Lifebuoy soap (if you haven’t come across this before, I strongly advise you to have hankies at the ready – it’s a tearjerker!):

And here’s a sample of people’s reactions to it — reactions that, I must say, are of precisely the kind that I have every time I watch Gondappa’s story:

What can we learn from this (aside from it being a masterclass in emotive storytelling)?

Three things, I think…

Firstly, terminology. When Unilever uses the word ‘sustainable’, they’re not using it as a synonym for ‘green’ – exclusively about environmental stewardship (although ‘Reducing environmental impact’ is a key area of focus for its Sustainable Living Plan). It’s much bigger than that. It’s about increasing their social impact and, in so doing, creating consumer preference for their brand(s) and increasing the long-term viability and prosperity of their business.

Second, positioning. Note how the Lifebouy brand is explicitly connected to the higher purpose of preventing disease and unnecessary deaths through the simple act of washing hands with soap. Note how it fits neatly under ‘Improving health and wellbeing’ (another – and the first – of their three topline areas of focus). Note, too, how its campaigns to encourage healthy hand-washing habits across schools and villages, in urban and rural communities across Asia, Africa and Latin America, are a logical extension of the Lifebuoy product and its purpose.

Third, the art of creating value through sustainability. Two numbers tell you everything you need to know about how making a relevant and positive social impact on the world creates brand value. As a result of Hindustan Unilever’s campaign in Thesgora, India, the incident rate of diarrhoea has fallen by 86%. And what effect has that, and other similar campaigns, had on the Lifebuoy brand? Underlying sales growth is 18% per annum over the last three years.

‘Nuff said!

Paul Polman: 21st century leader

“If you want to change consumer habits – if you want to connect for change in society – we have to use our brands. And the most challenging thing is to give all your brands a social purpose. I don’t believe that any brand should be there, if it doesn’t serve a purpose that actually makes this a better world.”

In short, according to Unilever CEO, Paul Polman, a company or brand that doesn’t serve a higher social purpose doesn’t deserve to exist.  (Go figure that I should have a massive man-crush on him!)

Those few lines above represent just one of many memorable passages in a speech Polman gave to a rapt audience as part of the Hult Visionary Speaker Series in London a couple of weeks ago – a speech in which he not only touched on, but also clearly exhibited, the habits/characteristics that he believes are essential to successful leadership in 21st century:

  • To be authentic and purpose-driven
  • To be systemic thinkers (able to unravel complexity)
  • To be comfortable with total transparency (no transparency = no trust)
  • To collaborate and forge coalitions (capable of creating tipping points)
  • To have a long-term orientation

Hult has kindly made a video of his speech, and the ensuing Q&A session, available on Youtube. If you can find 90 minutes to spare to watch the whole thing, I really suggest you do. If you’re more strapped for time, maybe try jumping in around 49 minutes.

An aside:

Watching this back again last night, I was reminded of one of the very first pieces I ever posted on this blog – my reactions to a similar keynote address given by Ray Anderson, founder of Interface, to an audience at Ashridge over five years ago.

For me, the similarities are striking.

Both delivered some very stark messages, but did so with great authenticity, humility and humour – a very down-to-earth style that made those messages hit home, without ever feeling ‘preachy’.

Just as Ray was, so Paul seems to be more than happy to get out in front of conventional competitive thinking and take bold action. His abandonment of quarterly reporting is a great example; likewise his comments during the Q&A session on more collaborative businesses models (starting around 1:25:00).

I closed out my post about Ray with the wish that we might find more leaders like him in business and in public life. In Paul Polman, we most certainly have.

Thumbs up from Unilever’s Paul Polman

I like surprises.

Like returning from holiday this week, firing up my email, and finding a personal message in my inbox from one of the world’s most impressive and influential business leaders – Unilever CEO, Paul Polman – with some very kind words about the 2nd edition of Live Long and Prosper.

Following another spontaneous bout of ‘brass neck syndrome’ a few weeks back, I mailed three copies of the book to him, Sir Richard Branson and Dame Ellen MacArthur – the former two in their shared capacity as leaders of The B Team; the latter as founder of her eponymous foundation aiming to accelerate our transition to a more sustainable, circular economy. (More accurately, my wife mailed them for me and, by all accounts, it raised an eyebrow or two at the local post office!).

Harking back to my previous post, the fact that Paul should even have read the book is yet further proof in support of the 55-minute guide concept – offering busy executives the most possible insight and taking from them the least possible time.

The fact that he enjoyed it enough to write and tell me he thought it was great is obviously very nice too! If it’s good enough for the CEO of one of the world’s most influential companies – currently ranked number one in GlobeScan’s Sustainability Leaders’ poll – then it should be good enough for anyone.

Order your copy here.

Seven signs that the “Age of Sustainability” is truly upon us

Anyone who doubts that we’ve reached a tipping point where sustainability is concerned would be wise to take a look at the latest news from the Management Innovation Exchange.

Last Friday, those great bastions of left-brained management thinking, Harvard Business School and McKinsey, jointly launched a new leg in their “M-Prize for Management Innovation”.

The Long-Term Capitalism Challenge seeks – and I quote – “to accelerate the shift toward a more principled, patient, and socially accountable capitalism – one that’s truly fit for the long term,” and calls for real-world case studies, progressive practice and bold ideas around “reinventing capitalism for the 21st century”.

This is just the latest in a long line of developments that signal that sustainability as I’ve long been wont to define it – as “a perspective on brand and business strategy that inextricably links long-term success with serving a higher social purpose” – has now well and truly hit the mainstream.

Consider the following, and that these are by no means an exhaustive list of developments. These just happen to be the ones that have most caught my eye over recent years…

  1. 2008 – The emergence of the “low-profit limited liability corporation” (L3C for short) and “B-corporation” marks the birth of new forms of incorporation in the US – ones that enshrine putting long-term value and social impact ahead of short-term economic gain.
  2. 2009 – Jack Welch, erstwhile CEO of GE and poster-boy for the Milton Friedman/Chicago School mantra that a company’s only social responsibility is to increase returns for shareholders, deals a stinging body blow to that whole philosophy when he describes maximising shareholder value as, “the dumbest idea in the world.” (More on that in a great Forbes article by Steve Denning here.)
  3. 2010 – In December, outgoing chairman and chief executive of M&S, Sir Stuart Rose, delivers a stark warning to business – that the combined forces of population growth, diminishing resources and climate change represent a perfect storm that will see those with unsustainable business models dead within 20 years.
  4. 2011 – Just a month later, doyen of competitive strategy, Michael Porter, confidently asserts in an HBR article that “the next great transformation of business thinking” lies in creating shared value – reconnecting company success with social progress. This should no longer be seen as something peripheral to core business, says Porter, but absolutely front and centre.
  5. 2011 – Paul Polman, CEO of Unilever, launches their Sustainable Living Plan. He does so with very carefully chosen words that, “This is not a project to celebrate, but a new business model to implement,” and clearly positions action on sustainability as a critical driver of value creation.
  6. 2012 – In February, Accenture publishes a white paper suggesting that the position of Chief Sustainability Officer is on the wane. Regardless of whether or not you think that’s sensible (and I personally don’t, for reasons described in my previous post), it nevertheless signals a major shift in mindset – the reason for the CSO’s apparent demise being a preoccupation with ensuring that sustainability isn’t seen as a separate agenda, but as an integral part of all aspects of strategy and operations.

And now – because, let’s face it, it deserves repeating – let’s add a seventh sign to that list…

On 2 March 2012, Harvard Business School and McKinsey jointly launch a new “M-Prize” competition on the Management Innovation Exchange. The challenge? To find examples that augur and accelerate the reinvention of capitalism as a force for good in the 21st century.

Yessiree, the times they are a-changin’!

Old-world CSR vs. new-world sustainability. What’s the difference?

Following my last post, Kevin Keohane very kindly gave a nod to his readers that, if they wanted to get to grips with the difference between old-world CSR and new-world sustainability, they could do a lot worse than swing by this blog. (Ta, mate!)

In the same vein, I’d encourage folks to take a shufti at the shortlist for the Guardian Sustainable Business “corporate sustainability innovator of the year” award.

It’s one helluva shortlist, with profiles of the nominees and links to various articles, blogs and Q&As providing some fantastic illustrations of the new sustainability in action – i.e. sustainability not as peripheral greening, but as core business strategy; the cultural impetus to create new business models that emphasise the creation of shared value.

Among that list, you’ll find a couple of folks who’ve been mentioned on this blog in the past – Mike Barry, for example, M&S’ head of sustainable business (and point man for delivery of Plan A); also Paul Polman, CEO of Unilever (the man at the helm for the launch of Unilever’s Sustainable Living Plan).

You’ll also find Hanna Jones of Nike (architect, amongst other things, of their GreenXChange open innovation platform) and Ian Cheshire, CEO of Kingfisher (yet another progressive and passionate CEO prepared to shout from the rooftops about a more constructive form of capitalism).

Rationally speaking, any of the candidates would be deserving winners for the work that they are doing to emphasise what sustainable business is really about, but I’ve got a soft spot for Mike and cast my vote for him!

Reason 1: When I was in the throes of my Saudi sustainability project, I reached out to Mike for his assistance in developing an M&S case study. I wanted to scratch beneath the surface of all the public pronouncements and understand much more deeply how M&S were setting about embedding sustainability in organisational culture. Mike very graciously obliged and offered some really great insights – a favour that deserves returning!

Reason 2: maybe it’s the British obsession with supporting the plucky underdog? Whatever, I just feel that the bloke who’s got his sleeves rolled up actually delivering on Plan A deserves recognition, perhaps more so than the big name CEOs.

Reason 3: lest you think that my judgement is based on entirely subjective and emotional reasons, let me just reinforce that there are actually bloody good, legitimate, logical reasons for casting a vote in Mike’s favour too. Take these two further slides from my recent Landor presentation, for example, as illustrations of the scope and ambition of Plan A.

Jonathon Porritt’s verdict, I think, says everything that needs to be said about why Mike and M&S would be worthy winners of the award:

M&S is addressing the right things, in the right way… It’s not just progress against all the specific actions that matter, but the way in which M&S is transforming its core business model through Plan A.

That, in a nutshell, is what the new sustainability is all about.

When elephants learn to dance

I’ve long argued on this blog, and in my book, that business needs to change the way it thinks about sustainability.

Framed as simply “green”, sustainability tends to be viewed as an isolated issue and spawns end-of-the-pipe solutions that, whilst reducing the negative impacts of the prevailing business model, leave that model fundamentally unchallenged. In that world, acting sustainably is a cost – and one that neither addresses the full scope of the environmental challenge (merely slowing the rate decline), nor offers any meaningful prospects for radical differentiation.

Viewed in the context of “longevity”, however – the capacity to survive and prosper over generations – ethical business practices and environmental stewardship become part of a very different and much broader conversation. In this world, acting sustainably is about authenticity and fundamental long-term business viability – a vital lens through which to view innovation and shared value creation in a world of changing frame conditions.

I’ve been fascinated, this week, to read the considerable coverage surrounding the announcement of Unilever’s Sustainable Living Plan, including articles from Jonathon Porritt and John Elkington on the newly-established Guardian Sustainable Business forum, not to mention all the reaction of various members of the Twitterati.

Whilst the proof of the pudding (as John rightly observes in another commentary on CSR Wire) will be in the eating, the language being used by Unilever CEO, Paul Polman, is at least demonstrating the correct framing of the issue. Some of the choicest soundbites include:

“Growth at any price is not viable. We have to develop new ways of doing business which ensure that our growth does not come at the expense of the world’s diminishing natural resources.”

“We are already finding that tackling sustainability challenges provides new opportunities… It creates preference for our brands, drives our innovation and, in many cases, generates cost savings.”

“This is not a project to celebrate, but a new business model to implement.”

In short, then, one of the great behemoths of consumer products is saying that business cannot choose between growth and sustainability. It has to do both, through the creation of new business models. (And, by the way, doing so will be bloody good for business!)

Throw names like Walmart and Proctor & Gamble into the mix (note: Unilever’s announcement follows hot on the heels of a similar one from Proctor & Gamble in September, emphasising the full incorporation of sustainability into its “Purpose-inspired Growth Strategy – improving the lives of more consumers, in more parts of the world, more completely”), and you have to think that something big is starting to happen.

When the elephants learn to dance, you know that sustainability is finally coming of age.