Table of Contents
Unilever evaluated using sustainable value model.
Analysis of Unilever’s sustainable value case
Discuss Unilever’s social, environmental and economic value by using the 1+7 model
The idea that sustainability should be embedded
Unilever has its challenges.
This essay will focus on Unilever’s sustainability case. This section also considers the value creation levels to evaluate Unilever’s consumer goods producer.
Analysis of Unilever using sustainable value model and levels value creation It was the company that first created a separate UN Guiding Principles Reporting Framework human rights report. This led to Unilever announcing their new goal of becoming ‘carbon negative’ in their production by 2030. Unilever is an excellent example of a sustainable producer of consumer goods that creates both shareholder and stakeholder value. The International Fund for Agricultural Development will partner with Unilever for a five year period. They will draw on their expertise in sustainable farming to help farmers and small-scale enterprises get into the markets, and train them in sustainable agriculture best practices. The partnership will allow rural people to get a job but also help them escape poverty. Producers can lower their costs because 60% of agricultural raw material is renewable. Environmental stakeholders are proud of the efforts to end hunger, increase food security, and improve nutrition. Unilever has reduced the amount of plastic used in bottles by as much as 15%. Customers love them for being lighter and more durable than other plastics. Retailers also like them since they can save approximately 1, 000 tonnes per year. Environment stakeholders are pleased with the reduction in plastic resin. Unilever’s social and environmental value can be discussed using the 1+7 Value model. Unilever creates social and sustainability while also building brands and businesses. This topic will be addressed by the 1+7 Value Model.
Level 1. There are three areas in the environment where mitigating risks can be of significant benefit to both shareholders as well as stakeholders. First, prepare for disasters in advance to decrease the chance of them happening. Second, manage remediation projects in a timely manner to reduce remediation costs. Thirdly, reduce product liability insurance by limiting environmental risks for customers, employees, and contractors. Sustainability has a positive impact on business. Unilever, for example, had 60% of its agricultural raw materials sustainably sourced in 2015. This helped to minimize risk from the future supply chain due to climate change.
Process cost reduction (level 2). This refers to using less material or energy per unit production and reducing waste. Pollution prevention is more expensive than remediation. Since 2008, Unilever has saved more than 600 million dollars from energy, water and waste efficiencies in their global network of factories. Unilever’s contribution has been in reducing CO2 emissions during manufacturing. They have achieved a 39% per-tonne reduction by 2015.
Level 3 product differentiation allows companies to offer green products. Consumers prefer green products. According to Lesley Thorne (Global Sustainability Manager) who spoke to Unilever about sustainability, both a Sustainable Living brand and a product must have a purpose. Dove’s purpose is to reach more than 15 million people, and its new compress aerosol deodorants can be used by half of those customers. This innovation reduces carbon footprint by approximately 25% per can.
Level 4 technology invocation opens new markets and creates new businesses that are sustainable. Unilever wins through brand recognition and innovation. Unilever Indonesia is also promoting its goods through direct marketing to customers and ensuring that the products are in good condition. Unilever Indonesia has also contributed to the growth of volume in Java.
Companies can enhance and protect their brand through level 5. This is because they have loyal customers, suppliers’ choice, and investors. Paul Polman is the CEO of Unilever. He believes that companies should take more responsibility for their business operations to benefit consumers, and not just the customer. Unilever, for instance, is more concerned with detergents. Because its products are washed at lower temperatures and conform to the Unilever Sustainable Living Plan, customers enjoy lower transport, packaging and value-chain benefits.
Level 6 companies try to influence the industry standard by promoting regulation over their competitor. Unilever Sustainable Living and its transformational change agenda are examples of ways they embed human right respect into operations as well. They published the UN Guiding Principles Reporting framework in 2015. They also trained 860 employees to be human rights ambassadors. They established the Rin Career academy to aid women in Brazil to gain an education and improve their English skills.
Level 7 – Radical innovation. This process innovation creates value for customers. Unilever Sustainable Living Plan will allow them to make a transformational shift through their brands, innovation and sourcing. The fundamental changes they make to entire systems will be more important than incremental improvements. To combat climate change, they are focusing on three main areas. A sustainable agricultural system is essential to increase food yields as well as improve the lives of smallholder farmers. Unilever’s efforts have greatly improved the status of women. To eradicate poverty and accelerate global development, it is crucial to empower women. Third, ensuring universal access to safe drinking water and sanitation is a priority.
The ES Cloud allows Unilever to identify their core values and mission. Paul Polman is the CEO of Unilever. He stated that shareholders are becoming more skeptical of the idea of short-term maximization. This means that if a company focuses solely on shareholders, it might not last long. Unilever is focusing on making consumers’ lives better in a sustainable and fair way. Unilever believes that sustainability and growth are compatible. The Unilever Sustainable Living Plan is a great investment. Shareholders will get a reward, and the plan can make sustainable living possible for everyone. Unilever reduces waste, energy consumption, and raw materials. This helps increase margins and create efficiency. Since 2008, they have seen their factory’s eco-efficiency improve their cost per unit. While Unilever will not be seen as being green-friendly, embracing sustainability can help improve its competitive position. For example, the waste manufacturing projects have provided a significant cost benefit of around 250m and hundreds of jobs. Their growth was approximately half due to sustainable living brands, which grew at a faster rate than other businesses. Unilever has to reconsider product design in order for it to be sustainable. This opens up new markets for their brands and allows them to communicate with their customers in different ways to satisfy their changing needs. combat climate change. Unilever, in November 2015, announced they will be carbon neutral by 2030. By 2030, 100% of their energy will come from renewable sources. They will make every effort to reduce the greenhouse gas impact of sourcing, manufacturing, innovation and to eradicate deforestation in their supply chains.
Unilever has its challenges. Unilever also faces problems. Unilever still faces major challenges. The vast majority of targets are in operation in an unstable and uncertain world. However, Unilever can’t prove that they will achieve these targets without significant time investment. Also, they have to adapt and modify in order to develop a sustainable marketplace. The number of people leaving farming to pursue other careers is increasing, and farming is becoming less popular among young people. Unilever must now face the challenges of sourcing agricultural raw materials. Unilever Sustainable Living Plan provides solutions to climate and developmental challenges and adds value. However they have to be open to working with government and non-governmental organisations.
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