Change of strategy: Hein Schumacher
Unilever has softened its targets on plastic packaging, worker pay and diversity amid investor backlash against “woke” policies.
In a major shift in strategy, consumer group chief Hein Schumacher said it needs to “boost performance” while backing away from its sustainability promises.
The £95bn giant, owner of brands such as Dove and Hellmann’s, has pushed the idea that businesses should do well in the world.
But the Anglo-Dutch firm has come under fire from shareholders for prioritizing a “woke” agenda over profits.
Unilever shares have underperformed rivals such as Nestle and Proctor and Gamble in recent years.
The company, which also owns Domestos, Comfort and Knorr, yesterday cut its commitment to halve new plastic use by next year. Instead, Unilever – one of the world’s largest users of plastic packaging – has promised to reduce its use of virgin plastic by a third by 2026.
It has also diluted its promise to ensure that all workers in its supply chain are paid fairly.
In 2021, the company said it would refuse to do business with companies that did not offer a living wage at least by 2030.
But only 50 percent of Unilever’s procurement spending must be with suppliers that have signed the “living wage pledge” by 2026.
And it has abandoned its promises to halve food waste in its operations by next year and ensure that 5 percent of the workforce is made up of disabled workers by 2025.
Other abandoned promises include spending £1.7 billion a year across businesses globally by 2025.
Most of the policies were introduced under Schumacher’s predecessors Alan Jope and Paul Polman.
“I think it was a moment when they had to imagine a world in which great ambitions were possible,” Schumacher told Bloomberg. “And that was probably right at the time, but now I have to turn it back into something that I think we can all live up to.” I need to drive performance in the company.”
Christ Beckett, head of equity research at Quilter Cheviot, said the decision “reflects a pragmatic shift towards more achievable near-term goals.”