Marketing’s role in sustainable living

In a resource-constrained world, growth needs to be not only economically sustainable, but environmentally and socially sustainable as well. Marketing leaders need to grow businesses for existing generations and for the generations to come. Global CMCO, Keith Weed, describes how Unilever is tackling this massive challenge

I believe that economic sustainability and social and environmental sustainability can be synergistic and not in conflict. To explain this, I’d like to answer three basic questions:

• First, why does growth need to be sustainable?
• Second, how do you grow and truly help people at the same time?
• Third, how do you make what we call Sustainable Living commonplace?

The questions are complex, and many believe a company should surely concentrate 110% on keeping its head above water in these turbulent economic times and focus on the day job of economic growth. However, there are other big drivers, which are every bit as important as the economic environment, that are shaping our world and we ignore them at our peril.

The first of these drivers is the shift of economic power to the east and south. The centre of gravity is moving from New York to New Delhi. This is driven both by economic and population growth. The second driver is the impact of digital technology. Not just digital marketing and advertising, but in the way it is changing consumer lifestyles and behaviour. The third driver is sustainability – and not only the environment – but sustainability in every sense of the word.

A step-change to a new model of consumption

This is not about green marketing. This is about a step-change to a new model of responsible consumption. So why do we need to create sustainable growth? The facts speak for themselves.

First, population: this is the main driver. On the 31 October 2011, the world’s seven billionth baby was said to be born in the Philippines. By 2050, it’s estimated that there will be 2.5 billion more people on earth than there are today. That’s the equivalent of adding two more Chinas to the world’s population or a new London every six weeks. Second, urbanisation. We are witnessing a tectonic shift in how the world lives; we’re moving from the majority of our population living in rural dwellings to urban. And change is happening quickly. By 2015, half the population in developing and emerging markets will live in urban areas; 1.3bn people will live in urban slums. By 2035, slums will be mankind’s primary habitat.

But while these consumers become ever-more demanding in seeking higher standards of living, the world’s resources will become scarce. The WWF estimates that if all the world’s population were to consume at the rate of the UK, we will require the resources of three planets. Unfortunately, we are already living on 1.3 planets, and we only have one.

So, how do we turn this challenge into an opportunity to create growth while, at the same time, truly helping people?

How Unilever is leading: three big goals

I’ll start with some examples I know well. Unilever has been around since the 1880s. We have every intention of being here for another 100 plus years, which means we need to look at our brands – existing and future – through the lens of sustainability. To align our efforts internally and externally we have gone public on a simple business ambition: to double the size of our business while reducing our environmental impact.

This will require a new and transformational business model, one that decouples growth and environmental impact, one that has sustainable growth at its core.

We’ve set ourselves three big goals to achieve by 2020:

• Help one billion people take action to improve their health and wellbeing.
• Source 100% of our agricultural raw materials sustainably.
• Halve the environmental footprint of our products.

Let’s bring these to life with some real examples and illustrate why we see this as a source of growth and innovation central to our business model.

Goal one: by 2020 we’re going to help one billion people take action to improve their health and wellbeing.

One of Unilever’s oldest brands and the world’s first disinfectant soap, Lifebuoy, played a significant role in improving hygiene in Victorian Britain. Today, Lifebuoy is mainly sold in Asia and parts of Africa and aims to help prevent the 3.5 million childhood deaths each year from diarrhoea and acute respiratory problems.

It’s been estimated that if everyone washed their hands properly at key times during the day, up to half of all childhood deaths from diarrhoea – more than one million children – could be avoided.

To promote understanding of the importance of handwashing, Lifebuoy was one of the founders of the first ever Global Handwashing Day in 2008, with the United Nations and other partners. And we’ve set a global ambition for Lifebuoy to change the hygiene behaviour of a billion people by 2015. There’s a big business opportunity as well as health opportunity in doing this. While it’s true that nearly all homes have soap, people do not use it at the right times of day to prevent disease, and consumption varies widely.

In Pakistan, for example, our campaign to encourage handwashing at key times has been particularly effective, driving an 8% increase in consumption as well as growing market share.

Pureit, one of our newest brands, is a radical departure for Unilever. It’s a machine rather than a fast-moving consumable, bringing safe drinking water to people and places who need it most. It’s also true to William Lever’s original mission – to make hygiene commonplace.

Pureit is a different product with novel technology that has both consumer and environmental benefit. It provides water as ‘safe as boiled’ by removing harmful viruses, bacteria, parasites and pesticide impurities. Pureit can reduce the incidence of diarrhoea disease by up to 50%.

The fact that Pureit delivers all this without the need for electricity and running water makes it more environmentally friendly than the alternatives and is available at an affordable price. It has already helped give more than 20 million people across India access to safe drinking water. We have launched Pureit in Mexico, Brazil, Indonesia, Bangladesh and Sri Lanka in 2011.

In India (where Pureit was first launched), the purifier is available for just 848 rupees (€13) with an ongoing running cost of just one euro cent for more than two litres of safe drinking water. We will use this technology to reach 500 million people by 2020 and at the same time build a completely new market for Unilever.

"Great brands, and great companies, have always walked ahead of consumers. They anticipate what consumers will need, or might need, and shape markets accordingly"

Goal two: by 2020 we’re going to source 100% of our agricultural raw materials sustainably.

Unilever is the largest tea company in the world. Consumers around the world increasingly want reassurance about the products they buy – where they come from, how they’re made, what’s in them.

We’ve found that when consumers learn that Lipton tea is certified by the Rainforest Alliance, they say ‘the tea has been carefully selected, so it must be better quality and it must taste better’.

We source tea from many thousands of suppliers around the world: large tea estates, some of which we own; smallholder farmers; and third-party suppliers and processors. In 2007, we became the first major tea company to commit to sustainable sourcing of tea on a large scale. And all the tea in Lipton Yellow Label and PG Tips tea bags in Europe is already 100% sustainably sourced. Our efforts have been a catalyst to the industry, and other tea companies have followed our lead. The tea industry as a whole is now moving to sustainable farming practices.

And our ambitions are even bigger. We aim to source the tea in all Lipton tea bags from Rainforest Alliance Certified™ estates by 2015. Our programme covers more than 38,000 farmers so far and will include more than 13 countries including India, Brazil and Kenya. It’s a win-win for farmers and for our business. The benefits for Lipton are clear: packs carrying the Rainforest Alliance seal are generating positive feedback from our consumers and improving brand health and sales.

Goal three: by 2020 we’re going to halve the environmental footprint of our products.

Water scarcity is becoming an increasing problem across the globe. Some of the biggest markets for our laundry business, such as India, China and Turkey, are already becoming increasingly water stressed. One of the biggest uses of domestic water is laundry. Currently, people wash in one bucket of water and rinse with three – except the Chinese who rinse in five. But collecting water is a time-consuming and arduous and increasingly people are having to pay for product.

With Comfort One Rinse fabric conditioner you need only one bucket for rinsing rather than three. It’s much more convenient, saves time and sometimes saves money. It delivers consumers real benefits and is better for the planet.

Finally, our Trashion brand (Trash and Fashion) is a great example of encouraging entrepreneurs while providing a practical solution to plastic waste.

Trashion means that local women can turn plastic packaging waste into useful, attractive items with economic value such as bags, umbrellas, slippers. Training and financial support is provided and these women are encouraged to engage others in their neighbourhood to be involved in the Trashion production process from collection to manufacture.

Started in Jakarta with 10 entrepreneurs, now Trashion products are available in 73 Trashion centres with an average capacity of receiving up to one ton of waste per month – and producing 23,000 Trashion items. These products sell as fashion items in leading stores in Indonesia.

Making sustainable living Commonplace

Here are thoughts that together will help make this happen.

Foresight not just insight. Great brands, and great companies, have always walked ahead of consumers. They have a point of view. They don’t just respond to current needs – what consumers say they want now – they anticipate what consumers will need, or might need, and they shape markets accordingly. It’s about imaging a different future and designing for it.

For example, just because a consumer can’t articulate a need or a worry about sustainability issues doesn’t mean that they aren’t there; and just because are unconcerned or unaware of these issues it doesn’t mean there isn’t a big opportunity.

New business models. Stainability needs to be embedded at the heart of strategy. To succeed here we need new business models. Sustainability needs to be integral to your strategy not an add-on. And for this, organisation must follow strategy.

For example, I am responsible not only for traditional CMCO responsibilities but also internal and external communications, external affairs, sustainability and the Unilever corporate brand. In a hyperconnected world it joins everything up – it also brings sustainability from a side to central function. I believe there is a much broader role that marketers can and should be making here. For example, I no longer have a CSR department. For me that suggests an additional side activity not a core business activity. Sustainability needs to be embedded.

We can’t do it alone. Even the biggest of companies can’t solve this alone, we need to get people around the table and working together and this requires organisation of all sizes to engage, big and small. It requires a partnership approach among communities of interest – governments, NGOs, suppliers, retailers and, most importantly, our billions of consumers – so we can learn from each other about how we can do things differently.

For example, through our involvement with the Consumer Goods Forum, a global coalition of over 650 manufacturers and retailers, service providers and stakeholders, we publicly committed to sourcing commodities sustainably and to eliminating deforestation from our supply chain.

Our combined revenues are over two trillion dollars, and alongside WWF and other NGOs our goal is to put an end to tropical deforestation by 2020. Employee engagement. This is the key driver of business performance. Not surprisingly, the more engaged a workforce, the more it goes the extra mile. But you need to engage in something – a common purpose, an engaging goal.

Employees want to be part of a bigger purpose, I want to be part of a bigger purpose. Employees will not only make it happen but will become great advocates for it too. They ultimately will lead the agenda that will make Sustainable Living commonplace.

Our current experience also shows that our approach will help us win the war on talent. That’s why it is important to be recognised for our progress in this area too – to build a reputation. A business model based on sustainability will drive our brands and innovation, give us real competitive advantage and make Unilever a great place to work, attracting great people from all walks of life.

Social media and the corporate brand. Social responsibility is very present in social media. In the digital age where openness and transparency are vital. There’s nowhere to hide. Increasingly, we know that consumers want to know more about the brand behind the brands. That’s why nurturing your corporate brand is so important and why so many companies are working in this area.

"There is a much broader role that marketers should be making. For example, I no longer have a CSR department. It suggests an additional side activity not a core business activity"

But you need to have something to stand for, something that is important for your whole company and your consumer base. I want the Unilever logo to become a quality mark of Sustainable Living.

Since I’ve become Unilever’s CMCO, we’ve put the Unilever logo on 95% of our packs, 90% of our advertising, and awareness has increased in a number of our key markets. Remember it wasn’t so long ago our company name on packs was Lever Brothers, Van-den-Bergh, Birds Eye Walls & Elida Fabergé. We also created a unified, global approach to our social media, with YouTube and Facebook sites having the same look and feel around the world.

Marketing should take the lead

We are in challenging and volatile times – but they are also times of powerful opportunities and the best time to lead for a better future. Marketers have a key role here – if we take the lead we can create sustainable growth. But it requires us to think and act more broadly and make the sustainable, responsible growth agenda mainstream.

Keith Weed is CMCO of Unilever [email protected]

This an edited version of the keynote speech given at The Marketing Society Conference in November 2011.