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Polman gambles on sustainability paying off

Paul Polman, chief executive of Unilever, is either a very wise or foolish man. At this stage it is difficult to tell which. All we can say is that he has embarked on a courageous and momentous enterprise.

Ogilvy & Mather, which recently won Unilever’s multi-million pound corporate development account from Fallon, will shortly unveil details of the company’s 10 year sustainability strategy – Polman’s brainchild – to a largely unsuspecting public.

We’ve heard a lot about companies commitment to the mantras of corporate social responsibility – the Triple Bottom Line (3BL) of People, Planet and Profit. But frankly not much action, since Marks & Spencer’s milestone Plan A initiative in 2007. Polman’s plan is a lot more ambitious than M&S’s – and a lot more risky in the open-handed commitments it makes to supporting causes that may boomerang on core corporate objectives of profit and brand share, if mishandled.

To give the flavour of the plan’s ambition, it commits Unilever to source 100% of its agricultural-sourced products sustainably; to halve the environmental footprint of all its products – not just at the manufacturing stage, but from suppliers through to consumers; and to tangibly benefit the health of 1 billion people. All this in ten years. Even Polman admits he does not know how it’s going to be accomplished – yet.

The measure of the risk is this. Unilever is a major public company dependent upon the goodwill of institutional investors and their financial advisers. These people deal in quarterly earnings assessments, not ten-year plans based upon ‘idealistic’ notions. There’s still very little appetite in the City for the “Planet” element of the 3BL. So far, so good for Polman’s reputation: he has delivered 6-quarters of uninterrupted earnings growth. For now, they’ll humour him. But what happens if, at some future date, ‘Planet’ gets in the way of ‘Profit’?

Similarly marketing and brands. Polman has taken the visionary step of placing marketing, communications and Unilever’s sustainainability policy in the hands of its chief marketing officer, who for the first time is a board-level executive. That certainly advances the cause of joined-up strategy at the highest level. But it may give Keith Weed, the CMO in question, a few headaches when he comes to reconcile the consumerist ethic with a creed which is, in some respects, anti-consumerist.

There’s more in my Marketing Week column this week, not least some speculation on why Polman is prepared to take such an enormous gamble with his hitherto unblemished career.

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