No trade-off between purpose and performance

For over 120 years we’ve believed that being a responsible, sustainable business makes us a stronger, better business.

Most recently, this belief underpinned the Unilever Sustainable Living Plan (USLP) which, when launched in 2010, was a game-changer for us and for others.

But ten years on, the world is a very different place.

The role that business needs to play in addressing the challenges we face – particularly climate change and social inequality – is not only about doing less harm but doing more good. It’s no longer good enough to have a sustainability plan that sits apart from the business strategy.

That’s why, with the Unilever Compass – our new strategy – the growth of our business is inextricably linked with sustainability. In other words, we have fully integrated sustainability into everything we do.

As our CEO Alan Jope says: “For our sustainability efforts to be sustainable, they have to drive better business outcomes. The Unilever Compass will prove that our purpose-led, future-fit business model drives superior performance, and is better for both people and planet.

“We must end the misperception that there’s a trade-off between purpose and performance. Because we know there isn’t. And we know that this misperception is so damaging to the progress the world needs to make.”

At the heart of the Compass are five strategic choices that will help us deliver sustainable, responsible growth.

1 - Develop our portfolio into high growth spaces

The first of our choices is to develop our portfolio into high growth spaces across home care, beauty, personal care and foods. Within these, we have identified five categories that we will disproportionately invest in: hygiene, skincare, prestige beauty, functional nutrition and plant-based foods. Across all of these, we will seek to grow while working to have a positive impact on the world.

For example, as we grow our hygiene business, we will continue to expand our work on handwashing and sanitation, led by Lifebuoy and Domestos. As we grow our plant-based foods business, we will help consumers shift to a diet of less meat, reinforcing all the health and environmental benefits which come with that. And as we grow our prestige beauty business, we will build on the work of brands like Dermalogica, which has helped thousands of women entrepreneurs in the beauty salon business.

2 - Win with our brands as a force for good, powered by purpose and innovation

All our products deliver important functional benefits, whether it’s unbeatable hair protection from Dove shampoo, perfect whites with Omo laundry capsules or a nutritious bowl of soup using Knorr stock cubes.

But functional benefits alone are not enough. Increasingly, people are expecting brands to take a stand, and act on the social and environmental issues they care about. And the evidence confirms that when brands do so – and do it well – they grow faster than brands that don’t.

That’s why we’ve said that all our brands will have a purpose. In the years ahead, they will all help to build a healthier planet, improve people’s health and wellbeing, or contribute to a more equitable and inclusive society.

At the same time, innovation is the lifeblood of our industry. That covers both innovative, superior new products and innovating to meet the world’s sustainability challenges – for example, innovation to fight the Covid-19 virus, to have fossil-free formulations in home care or to develop new plant-based products.

3 - Accelerate in the US, India, China and key growth markets

Our third choice is to accelerate our business in the US, India, China and other future growth markets. These include Indonesia, Turkey, Vietnam, Pakistan, Brazil and the UK, as well as places like the Philippines, Mexico and South Africa.

These countries – which will make up two-thirds of global economic growth in the next decade – are where much of the world’s environmental and social tension sits. So that’s where we will disproportionately invest and use our scale to make a difference.

For instance, we will address important sustainability challenges such as ethnic discrimination in the US, food waste in the UK, deforestation in Indonesia and plastic waste in the Philippines and India.

4 - Lead in the channels of the future

The explosion in e-commerce is changing our relationship with consumers, who are increasingly going online to buy their everyday essentials. It is also transforming the decades-old distributive trade in developing and emerging markets, and opening up new opportunities for the millions of small businesses we work with.

There are over 14 million small stores in Asia and Latin America. We directly serve 5 million of them today, and we reach the rest through wholesale or other indirect routes to market. By the end of 2020, our e-business-to-business programmes had already created opportunities for 1.5 million stores, and that number is growing by the month.

The retailers grow their business, and we grow ours.

5 - Create a purpose-led, future-fit organisation and growth culture

Our people are our most important asset. We know we are at our best when we are living our purpose, bringing our whole selves to work in an inclusive environment, and acquiring and developing new skills that equip us for the future.

That future looks very different, with the infotech and biotech revolutions disrupting so much of what we know today, at speed and at scale. So, building the right culture for our business is going to be critical to our future success.

This culture will be inclusive and diverse, with unconscious barriers eliminated. It will be agile and flexible, reflecting how the world is moving away from the 9–5 working day and linear career paths. And we will focus on reskilling and upskilling, as old roles disappear and new ones are created.

Five choices, one goal

These strategic choices work together, to the benefit of all our stakeholders: our people; consumers and customers; suppliers and business partners; the millions of people who work in our extended value chain, society, the planet – and our shareholders.

We can’t lead in the channels of the future without helping small businesses in our retail value chain grow. We can’t contribute to a fairer and more socially inclusive world if we don’t ensure that our own business is a model for equity and inclusion. And we can’t develop our portfolio into high growth areas if our brands aren’t a force for good for people and the planet.