In this final chapter, we’ll examine the concept of sustainable marketing, meeting the needs of consumers, businesses, and society—now and in the future—through socially and environmentally responsible marketing actions. We’ll start by defining sustainable marketing and then look at some common criticisms of marketing as it affects individual consumers as well as public actions that promote sustainable marketing. Finally, we’ll see how companies themselves can benefit from proactively pursuing sustainable marketing practices that bring value to not only individual customers but also society as a whole. Sustainable marketing actions are more than just the right thing to do; they’re also good for business.
First, let’s look at an example of sustainable marketing in action at Unilever, the world’s third-largest consumer products company. For 17 years running, Unilever has been named sustainability leader in the food and beverage industry by the Dow Jones Sustainability Indexes. The company recently launched its Sustainable Living Plan, by which it intends to double its size by 2020 while at the same time reducing its impact on the planet and increasing the social benefits arising from its activities. That’s an ambitious goal.
SUSTAINABILITY AT UNILEVER: Creating a Better Future Every Day
When Paul Polman took over as CEO of Unilever a half-dozen years ago, the foods, home, and personal care products company was a slumbering giant. Despite its stable of star-studded brands—including the likes of Dove, Axe, Noxzema, Sunsilk, OMO, Hellmann’s, Knorr, Lipton, and Ben & Jerry’s—Unilever had experienced a decade of stagnant sales and profits. The company needed renewed energy and purpose. “To drag the world back to sanity, we need to know why we are here,” said Polman.
To answer the “why are we here” question and find a more energizing mission, Polman looked beyond the usual corporate goals of growing sales, profits, and shareholder value. Instead, he asserted, growth results from accomplishing a broader social and environmental mission. Unilever exists “for consumers, not shareholders,” he said. “If we are in sync with consumer needs and the environment in which we operate, and take responsibility for our [societal impact], then the shareholder will also be rewarded.”
Evaluating and working on sustainability impact is nothing new at Unilever. Prior to Polman taking the reins, the company already had multiple programs in place to manage the impact of its products and operations. But the existing programs and results—while good—simply didn’t go far enough for Polman. So in late 2010 Unilever launched its Sustainable Living Plan—an aggressive long-term plan that takes capitalism to the next level. Under the plan, the company set out to “create a better future every day for people around the world: the people who work for us, those we do business with, the billions of people who use our products, and future generations whose quality of life depends on the way we protect the environment today.” According to Polman, Unilever’s long-run commercial success depends on how well it manages the social and environmental impact of its actions.
The Sustainable Living Plan sets out three major social and environmental objectives to be accomplished by 2020: “(1) To help more than one billion people take action to improve their health and well-being; (2) to halve the environmental footprint of the making and use of our products; and (3) to enhance the livelihoods of millions of people as we grow our business.” The Sustainable Living Plan pulls together all of the work Unilever had already been doing and sets ambitious new sustainability goals. These goals span the entire value chain, from how the company sources raw materials to how consumers use and dispose of its products. “Our aim is to make our activities more sustainable and also encourage our customers, suppliers, and others to do the same,” says the company.
On the “upstream supply side,” more than half of Unilever’s raw materials come from agriculture, so the company is helping suppliers develop sustainable farming practices that meet its own high expectations for environmental and social impact. Unilever assesses suppliers against two sets of standards. The first is the Unilever Supplier Code, which calls for socially responsible actions regarding human rights, labor practices, product safety, and care for the environment. Second, specifically for agricultural suppliers, the Unilever Sustainable Agriculture Code details Unilever’s expectations for sustainable agriculture practices so that it and its suppliers “can commit to the sustainability journey together.”
But Unilever’s Sustainable Living Plan goes far beyond simply creating more responsible supply and distribution chains. Approximately 68 percent of the total greenhouse gas footprint of Unilever’s products and 50 percent of the water footprint occur during consumer use. So Unilever is also working with its customers to improve the environmental impact of its products in use. About 2 billion people in 190 markets worldwide use a Unilever product on any given day. Therefore, small everyday consumer actions can add up to a big difference. Unilever sums it up with this equation: “Unilever brands × small everyday actions × billions of consumers = big difference . Unilever brands × small everyday actions × billions of consumers = big difference . ”
For example, almost one-third of households worldwide use Unilever laundry products to do their washing—approximately 125 billion washes every year. Therefore, under its Sustainable Living Plan, Unilever is both creating more eco-friendly laundry products and motivating consumers to improve their laundry habits.
Around the world, for instance, Unilever is encouraging consumers to wash clothes at lower temperatures and use the correct dosage of detergent. Unilever products such as OMO and Persil Small & Mighty concentrated laundry detergents use less packaging, making them cheaper and less polluting to transport. More important, they’ve been reformulated to wash efficiently at lower temperatures, using less energy and water. Unilever estimates that these changes have achieved a 15 percent reduction in greenhouse gas emissions. Another Unilever product, Comfort One Rinse fabric conditioner, was created for hand-washing clothes in developing and emerging markets where water is often in short supply. The innovative product requires only one bucket of water for rinsing rather than three, saving consumers time, effort, and 30 liters of water per wash.
Such energy and water savings don’t show up on Unilever’s income statement, but they will be extremely important to the people and the planet. “Ultimately,” says the company, “we will only succeed if we inspire people around the world to take small, everyday actions that can add up to a big difference for the world.” To meet this objective, Unilever has identified “Five Levers for Change”—things that its marketers can do to inspire people to adopt specific sustainable behaviors. The model helps marketers identify the barriers and triggers for change. The levers for change are: make it understood, make it easy, make it desirable, make it rewarding, and make it a habit.
Under its Sustainable Living Plan, Unilever is working with billions of customers worldwide to improve the social and environmental impact of its products. “Small actions. Big difference.”
Reproduced with kind permission of Unilever PLC and group companies
Will Unilever’s Sustainable Living Plan produce results for the company? So far, so good. Unilever is making excellent progress on its overall mission of “making sustainable living commonplace” and on its 79 aggressive Sustainable Living Plan goals. The company has already achieved 13 specific targets, is right on pace with 57 more, and is making good progress on the other nine. And despite volatility in its global markets, Unilever’s profits continue to grow.
The sustainability plan is not just the right thing to do for people and the environment, claims Polman, it’s also right for Unilever. The quest for sustainability saves money by reducing energy use and minimizing waste. It fuels innovation, resulting in new products and new consumer benefits. And it creates new market opportunities: More than half of Unilever’s sales are from developing countries, the very places that face the greatest sustainability challenges.
In all, Polman predicts, the sustainability plan will help Unilever double in size while also creating a better future for billions of people without increasing the environmental footprint. “We do not believe there is a conflict between sustainability and profitable growth,” he concludes. “The daily act of making and selling consumer goods drives economic and social progress. There are billions of people around the world who deserve the better quality of life that everyday products like soap, shampoo, and tea can provide. Sustainable living is not a pipedream. It can be done, and there is very little downside.”
RESPONSIBLE MARKETERS DISCOVER WHAT consumers want and respond with market offerings that create value for buyers and capture value in return. The marketing concept is a philosophy of customer value and mutual gain. Its practice leads the economy by an invisible hand to satisfy the many and changing needs of consumers.
Not all marketers follow the marketing concept, however. In fact, some companies use questionable marketing practices that serve their own rather than consumers’ interests. Moreover, even well-intentioned marketing actions that meet the current needs of some consumers may cause immediate or future harm to other consumers or the larger society. Responsible marketers must consider whether their actions are sustainable in the longer run.
This chapterexamines sustainable marketing and the social and environmental effects of private marketing practices. First, we address the question: What is sustainable marketing, and why is it important?