I am sometimes skeptical when CEOs claim to be pursuing a just cause. I think companies often portend to be progressive simply for publicity’s sake, and because they know it is what their customers want to hear. But I recently learned about efforts by two corporations to put a social and environmental twist on their operations that seemed to go beyond lip service to corporate social responsibility. The companies are UK retail giant Marks & Spencer, and Unilever, the British-Dutch multinational that makes consumer goods such as Hellmans mayonnaise, Dove soap, and dozens of other well-known brands.
M&S CEO Marc Bolland gave a talk at London Business School and (among many other topics) relayed his experience of chairing a session at the World Economic Forum in Davos for the CEOs of major consumer goods companies. Coke, Pepsi, Procter & Gamble, Unilever, Nestlé… they were all there. Rather than debate the best way to cut costs, or prophesize about the next big trend in shampoos or snack foods, the CEOs spent the session talking about sustainability.
This was Bolland’s pitch to the CEOs: He said the old way of doing things, in which the goal was simply to sell as much as possible with no regard for the scarcity of resources, wasn’t going to work anymore. He said it was particularly problematic given the birth of a massive middle class in China, estimated by some to be as large as 1.4 billion people within 10 years. He said the western tendency to accumulate possessions as a mark of success was unsustainable, and he said that our children had become fixated on role models who had “stuff” rather than who had accomplished anything. Coming from the CEO of a company that exists to sell “stuff,” it was striking.
The solution to this conundrum, said Boland, was manufacturing goods in more sustainable ways and also getting customers to consume in smarter ways. For their own part, M&S has one of the most respected sustainability plans on the books, called Plan A.
Unilever’s ambitious goal is to double its sales while at the same time cutting its environmental impact in half. What’s so interesting about both Bolland’s comments and Unilever’s commitment is that they go well beyond the environmental footprint of these firms’ own products: both companies are actually trying to change the behavior of their customers when it comes to energy use, water use, waste disposal, and more. With more than 2 billion customers, Unilever recognizes both its vast reach into people’s homes and that its products are inextricably tied to a wide range of environmental issues. For example, Unilever makes shampoo and washing detergent, products that are linked to water consumption. What has long been the purview of government and civil society, namely shaping how individuals use resources, is now central to the corporate agenda.
Unilever’s Sustainable Living plan received a lot of attention when it was first announced. Since then, the company has been working to follow up the hype with concrete action. Key to its success will be a fresh approach to marketing, one that recognizes increasing sales isn’t the sole imperative. Last week Unilever Chief Marketing Officer Keith Weed spoke about this new paradigm for marketing at the Advertising Association Lead 2012 Summit. Here is a video from Unilever outlining how it might go about convincing customers to change their behavior.
There is no doubt that both M&S and Unilever’s efforts are small compared to the scale of the challenges posed by pollution, climate change, and over-consumption, and compared to the important work being done by numerous civil society organisations. But at the same time, it is important to recognize that it is only when the biggest players step up to take action that we will see any real progress. Companies like M&S and Unilever are big enough (and have deep enough pockets) that if they follow through on their commitments, it will create a domino effect across the industry and the end result could benefit us all.
Cross posted to the LBS student blog.