Unilever CEO announces strategic shift in sustainability approach

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Unilever CEO announces strategic shift in sustainability approach
Credit: © Reuters.

Unilever (LON: ULVR )'s CEO, Hein Schumacher, has announced a significant shift in the company's sustainability strategy, according to a Q3 financial presentation. The new plan deviates from the Sustainable Living Plan initiated by former CEO Paul Polman in 2010, which was criticized for being too scattered and not yielding enough short-term impact. This move comes after Unilever's stock hit a five-year low in October 2022 and increased pressure for financial growth.

Schumacher, who assumed his role on July 1st, believes that sustainability can enhance product superiority without being imposed on every brand. He plans to incorporate sustainability into a composite score for evaluating Unilever's performance and will reveal an updated climate transition action plan at Unilever’s next annual meeting. The company intends to submit revised targets to the Science Based Targets initiative in 2023 for validation.

The new strategy involves structuring the company's sustainability around four pillars—climate, nature, plastics, and livelihoods—with division heads and brand managers setting progress metrics. Planet Tracker commended the shift, while the HSBC’s consumer category research team expressed skepticism, likening the plan to Polman’s 2012 agenda and stating that investors would need more evidence before supporting Unilever's new direction.

In addition, Schumacher announced a strategic shift away from forcefully integrating purpose into brands, following criticism from major investors like Terry Smith over excessive sustainability promotion in products such as Hellmann's Mayonnaise. Brands like Dove, despite being praised for addressing unrealistic beauty standards, have faced criticism for their preachy approach.

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