The Unilever Experience

Transforming Strategy Through Conscious Leadership & Sustainability

“Companies are starting to understand that you need to be restorative, reparative, regenerative.” – Paul Polman

As part of our “Conscious Leadership in Action” series, this article examines how Unilever, under the leadership of former CEO Paul Polman, successfully transformed its strategy execution by embedding conscious leadership principles into its business operations.

Conscious leadership at Unilever focused on long-term sustainability, ethical decision-making, and aligning the company’s strategy with broader societal goals. This article explores key insights, examples and the measurable impact of this leadership approach, demonstrating how conscious leadership can drive both business success and positive social change.

Key Insights

1. Integration of Sustainability into Core Strategy

One of the most significant shifts under Polman’s leadership was the integration of sustainability into Unilever’s core strategy. Polman launched the Unilever Sustainable Living Plan (USLP) in 2010, which aimed to double the company’s size while reducing its environmental footprint and increasing its positive social impact. The USLP set ambitious targets, such as sourcing 100% of agricultural raw materials sustainably and improving the health and well-being of over a billion people by 2020. https://www.unilever.com/files/92ui5egz/production/16cb778e4d31b81509dc5937001559f1f5c863ab.pdf

Integrating sustainability into the core strategy not only aligns with global trends but also helps build a resilient business model that can withstand market fluctuations and regulatory changes. This approach positioned the company as a leader in sustainability, enhancing brand loyalty and attracting top talent.

2. Long-Term Value Over Short-Term Profits

Polman’s conscious leadership approach involved a shift away from the traditional focus on quarterly earnings. Upon taking the helm at Unilever, Polman eliminated earnings guidance and quarterly profit reports, a bold move that allowed the company to focus on long-term value creation. This decision underscored the company’s commitment to sustainable growth rather than short-term financial performance. https://www.forbes.com/sites/andyboynton/2015/07/20/unilevers-paul-polman-ceos-cant-be-slaves-to-shareholders/

Prioritising long-term value over short-term profits fosters a culture of innovation and sustainability, encouraging leaders and employees to think beyond immediate financial metrics. This approach also strengthens stakeholder relationships by demonstrating a commitment to enduring success.

3. Empowerment & Accountability

Under Polman’s leadership, Unilever emphasised empowering employees at all levels to take ownership of sustainability goals. This was achieved by integrating sustainability into its core business strategy, fostering decentralised decision-making, providing training, incentivising innovation and creating a culture of accountability and leadership through sustainability champions and performance-linked rewards. All this helped contribute to the company’s mission of making sustainable living commonplace.

Empowering employees and holding them accountable for sustainability objectives not only enhances engagement but also drives innovation and efficiency. When employees understand how their roles contribute to the company’s broader mission, they are more likely to be motivated and committed to executing the strategy effectively.

4. Stakeholder Engagement & Collaboration

Polman believed that business success should be measured not only by financial performance but also by its impact on society. Unilever actively engaged with a wide range of stakeholders including governments, NGOs, suppliers, consumers, investors, employees, local communities and academic experts to co-create solutions to global challenges. This collaborative approach ensured that Unilever’s strategy was informed by diverse perspectives and aligned with societal needs. https://www.unilever.com/sustainability/responsible-business/engaging-with-stakeholders/

Engaging with stakeholders beyond shareholders helps build trust, enhance corporate reputation, and ensure that the company’s strategy is responsive to external challenges and opportunities. This approach can lead to innovative partnerships that drive both business and societal value.

5. Measurable Impact & Continuous Improvement

The USLP included clear, measurable targets and timelines, allowing Unilever to track progress and adjust its strategies as needed. The company publicly reported its progress, fostering transparency and accountability. By 2019, Unilever had made significant strides in its sustainability goals, including reducing waste, cutting greenhouse gas emissions, and sourcing 62% of its agricultural raw materials sustainably. https://www.unilever.com/our-company/our-history-and-archives/2010-2020/

Setting measurable targets and continuously monitoring progress is crucial for effective strategy execution. This approach ensures that the company remains on track to achieve its goals and can adapt to changing circumstances.

Key Results

Every year, Unilever has reported progress against targets in their Sustainable Living Report. Some of the achievements include:

Reaching 1.3 billion people through health and hygiene programmes.
Reducing the total waste footprint per consumer use of products by 32%, and achieving zero waste to landfill across all factories.
Reducing greenhouse gas emissions from our own manufacturing by 65%, and achieving 100% renewable grid electricity across our sites.
Reducing sugar across all our sweetened tea-based beverages by 23%, and 56% of their foods portfolio now meets recognised High Nutrition Standards.
Enabling 2.34 million women to access initiatives aiming to promote their safety, develop their skills or expand their opportunities, they’ve moved towards a gender balanced workplace in which 51% of management roles are held by women.

This article provides an overview of how Unilever’s conscious leadership approach helped to transform its strategy execution, offering insights and lessons applicable to leaders in other organisations aiming to align their business strategies with broader societal goals. Here are some reflection questions to help you thinking about leading in your business:

Reflection Questions

1. How can your organisation integrate sustainability into its core strategy?
2. How can you drive long-term value?
3. What steps can you take to empower employees to contribute to your organisation’s broader mission?
4. What stakeholders could your organisation engage with to enhance the strategy execution and societal impact?
5. How can setting measurable targets and promoting transparency improve your organisation’s strategic outcomes?