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May 3, 2017

Unilever's Unsustainable Sustainability

By Robert Sawicki

This is an opinion piece about holding corporations accountable for living up to the promises they make about their commitment to sustainability and corporate social responsibility using Unilever as an example.


From "synergy" to "core competency," corporate America has no shortage of trendy buzzwords. In recent years, two of the most talked about are "sustainability" and "corporate social responsibility."

These terms generally refer to initiatives taken by a company to be environmentally friendly and invest in the developing world. Many companies continue to work hard at achieving these goals. Others are just paying lip service to them, in an effort to get good PR.

One company for which sustainability is more of a PR strategy than a genuine effort at social responsibility is Unilever.

The company's CEO, Paul Polman, has accumulated an impressive portfolio of glowing profile pieces that label Unilever "a model of responsibility." However, a closer look at the company's practices demonstrate that while business reporters in the west may be sold, the company's workers and investors in the developing world aren't basking in the warmth of Polman's social responsibility.

Last year, the company finally settled a lawsuit with 591 former employees of a thermometer factory in India that was shuttered in 2001 over environmental concerns. Despite dragging the lawsuit out for more than a decade before agreeing to a settlement, Unilever still claims it did nothing wrong, insisting it agreed to the payments on "humanitarian grounds."

Environmental activists charge that not only did Unilever expose workers to toxic chemicals, but also failed to clean up mercury after the plant's closure:

The thermometer factory, located in the quaint hill station, was closed in 2001. But after the closure, locals complained that the company had not cleaned up adjoining forest areas tainted by mercury, which can cause neurological damage even at very small doses. Many of the factory workers also had complained of health problems which they said stemmed from exposure to toxic gases.

Some reports suggest that more than 30 workers have died due to the effects of the toxic mercury vapours.

Unilever's lack of corporate responsibility goes beyond just environmental disasters. In order to make up for slowing profits, the company doubled the royalty fees for its Mumbai-based subsidiary Hindustan Unilever (HUL). This caused Hindustan Unilever "its biggest two-day drop in two years after announcing the plan."

In response to protests over these increased royalty fees, Polman was dismissive:

"That should not be an area of concern. In fact, anything you do there is someone who says that's my concern. And since you now have the Internet, it looks as if the whole world is saying so, which is not the case at all," Mr. Polman said, answering a question about investor concerns over the issue.

During this discussion with a select group of journalists in India, Polman was asked about how Hindustan Unilever was supposed to operate following such a negative reaction to the increased fees, Polman essentially said it wasn't his problem:

Talking about the general environment of pessimism in the country, Mr Polman said that HUL has been around long enough to be successful in this environment as in other times and its growth reflects that.

Earlier this year, Unilever was accused of price fixing edible oils and margarine in South Africa by that country's Competition Commission. The commission recommended a fine equivalent to 10 percent of Unilever's local turnover following a nearly three-year investigation into Unilever Plc and Sime Darby Bhd:

It found that between 2004 and 2013, the two companies had an agreement not to compete with each other on certain pack sizes of margarine and edible oils.

Sime Darby, the world's top palm oil planter, settled with the Commision last year, the Commission said in a statement.

Unilever and its CEO are great at talking about sustainability and corporate responsibility, but their actions continue to be greatly outpaced by their words. Not only would it be best for the developing world if companies like Unilever would do the hard work of following through on its promises to act in the best interest of the world, it would also be good if business reporters would allow a healthy dose of skepticism into their reporting.

If elite publications are going to serve as PR arms for these companies, rather than hold them accountable for their actions, the new corporate buzzwords of "sustainability" and "corporate social responsibility" will be rendered as meaningless and hollow as those that came before.

Submitters Bio:
Rob Sawicki worked on Capitol Hill for 15 years, including more than a decade as a communications flack. Sawicki is currently a freelance politics writer.