Unilever: Making Sustainable Living Commonplace

made next to your headquarters. Unless it sits at the heart of your business model, driving revenue growth, taking out cost, improving your employee proposition, don't do it. Welcome to calling Bullshit. The podcast about Purpose, a swashing the gap between what companies say they stand for and what they actually do, and what they would need to change to practice what

they preach. I'm your host, Tie Ontogue, and I've spent over a decade helping companies define what they stand for, their purpose and then help them to use that purpose to drive transformation throughout their business. In this special episode a positive case study, we're doing a deep dive into Unilever with their CEO, Alan job to find out how a global company of such vast scale, with such a

complex history keeps purpose front and center. You may not even have heard of Unilever, but I bet you've grown up using a bunch of their products. Dove Soap, Lipped and Ta Basiline, Ben and Jerry's, to name just a few. Many of these brands are purpose led in their own right. But what if the company that owns all of these household brands committed to operating under a single purpose to

make sustainable living commonplace. What if they committed to net zero carbon and regenerative farming practices, cut their use of virgin plastics, and ensured fair wages for everyone up and down their supply chains. Imagine the profound impact that could have on the future of the planet. Unilever has imagined that impact, and as the parent company to these famous brands and hundreds of others, they're in the unique position to bring that dream to life. But how do they

pull this off? It is such an ambitious project. They have hundreds of thousands of employees, three point four billion customers around the globe, and over a century of complex history to grapple with. I had the opportunity to sit down with their CEO, Alan Joke, for an honest conversation about the opportunities and challenges that Unilever faces and how he plans to help you. Leaver continue the journey into a purpose driven and ever brighter future. But first let's

delve into Unilever's history. The story begins in nine century Holland, when two butter making families, the Jurgen's and the Vandenburgh's, turned their efforts toward a new product, Marjarine. Meanwhile, over in England, William Lever was also making changes at his family business, Leaver Brothers. The resulting product, Sunlight Soap, was so popular that soon they were making four dred and

fifty tons of it every week. Consider progressive for his time, William Lever saw his company as more than just a profit engine. His mission was to make cleanliness commonplace and bring hygiene and thereby help to the masses. He wanted to do well by doing good, to grow his company and simultaneously, where's the standard of living for both his customers and his employees. With prosperity sharing as his guiding principle, he built a village called Ports Sunlight, where he offered

affordable housing and other amenities to factory workers. It was here, at a time when benefits were practically unheard of, that he introduced innovations like sick leave, paid time off, and pensions. After years of common interests and even some collaboration behind the scenes, the Yurgans and the Vandenburg's officially combined their

businesses in nineteen twenty seven to create Margarine UNI. Two years later, Lever Brothers joined the fold in what The Economist called one of the biggest industrial amalgamations in European history. In simpler terms, Unilever was born. Over the next half century, Unilever grew a lot. They continued to acquire and launch new companies and brands, and by the nineteen eighties they'd

become the world's twenty six largest corporation. But through the eyes of someone looking back from the company engaged in some fairly questionable activities During this period of rapid expansion. There were some controversial marketing campaigns for skin lightning products in the global South, and human rights violations like child labor. Over the years, parts of Unilever had definitely lost touch with ports. Sunlight's founding principle of doing well by doing good.

In the late ninety nineties, with their ideals off track and growth stalled, the business was in decline and in they took dramatic action and cut three quarters of their nearly six hundred brands. But even after shifting focus to their most successful brands, the next decade really only saw some modest returns. By the time uni Lever was hit by the two thousand and eight recession, it was clear that the only way forward was to get a truly

fresh perspective. The most important thing is that you pursue your your purpose, whatever you feel strong about. Figure out where you want to make the difference. That's the first thing you need to do. That's Paul Pullman. He had steered Unilever's rival Nestle through this financial storm as their cf OH. This caught the attention of the head haunchos at Unilever, and instead of hiring from within, they decided to poach Paul Pullman in two thousand and nine. He

became Unilever's new CEO. First order of business get everybody on board with his ambitious vision. Because I came in from the outside. Some people felt that the Troy and Horse was let into the company. And I discovered very early on that it was for me to prove that I could be part of the team, instead of them to prove that they could be part of my team. To do this, he knew he needed a better understanding of Unilever's history, so he turned his attention to the

company archives and started digging. And we came to some enormous values, and one of them is certainly doing well by doing good. He had unearthed those same principles upon which William Lever built Ports Sunlight. We took all that strength and said, can we not turn that into a business model? That is that's what they needed right now. Palman implemented what he called the Sustainable Living Plan, which aligned their global business strategy with the well being of employees, customers,

and the environment. They also started acquiring purpose led businesses like Seventh Generation and Ben and Jerry's, and Paul brought a new approach to Unilever's finances as well, signaling to investors that if they weren't interested in sustainable, long term value creation, that they should take their money elsewhere. If you want to solve all these issues like climate chance or food security, or poverty alleviation, or access to clean drinking water or education. You cannot be victim to the

quarterly reporting. So you need different business models. And you know, even when I became CEO, we stopped doing quarterly reporting, We stopped giving guidance. We moved our compensation systems to the long term. And make no mistake, Palman said ambitious financials for the company as well. He declared that he expected the company to double revenue while cutting its environmental

impact in half. To put that in perspective, Unilever had three hundred factories across the world, four hundred brands, and two point five billion customers, no small task. When Pullman stepped down in January, he generated a two hundred and nine percent shareholder return. He had expanded Unilever's global market share, and he had become a purpose driven business legend. And the story continues with our guests today. Paul Pullman's handpicked

successor and current Unilever CEO, Alan Joe. As you'll hear, Alan is a warm, engaging leader who has worked in almost every part of Unilever's business around the world. I was fortunate enough to work with him as a client when he was a senior marketer at UNI Lever and I was an advertising creative director. We sat down to discuss his approach to sustainability and how he keeps purpose front and center while he runs a global corporation with

real integrity. That conversation right after the break, I am extremely excited to introduce the CEO of UNI Leaver, Alan Job Alan, welcome to calling bullshit. Hi Tai, thanks for having me. It's great to be here, Nice to see you after a while. Great to see you too. And to start out with, I thought it would be great to just have you tell us a little bit about

yourself and your background. Sure you can maybe tell from my accent that I'm Scottish by birth, grew up in Glasgow, went to University in Edinburgh and then joined Unilever Streets. After university um and the first five years in London, then fourteen years in the United States and thirteen years in Asia. My family and wife and I have lived for four years in Bangkok, five years in Shanghai and four years in Singapore. Came back to the UK just

four years ago. So after twenty seven years away, I'm a cultural stranger in my own country. A lot of my a lot of my time in marketing UM, but then progressed into general management and plenty of interests outside of work. I certainly don't live to work. But when you became CEO, you took over from Paul Paulman, who is the person who put Unilever on the path to really being a purpose led organization. What has that transition been like for you taking the range yourself and also

taking over for Paul. Well, in terms of the continuity of our sort of sustainability journey, it was relatively straightforward for a couple of reasons. First of all, it's not a ten year old thing. It's a hundred and ten year old thing. Our various founders and Uni Leaver are believed in running the business on a sustainable or purposeful way. This guy, William Lever, who found our Leaver Brothers, one of our antecedent companies, did all kinds of cool things.

He built a model village to house his workers when his workers went off to fight in the First World War. Not only did he hold their jobs open for them, he paid their families their wages while they were all fighting. Um. He kind of invented pensions. He had an elaborate system to create libraries for those workers children, and he back in the eighties to find the mission of the firm as to make cleanliness commonplace and lessen the load for women. So he was a very early on to social issues

and public health issues. Now, over the history of the company, we have generally tried to do the right thing as a business, often after exploring every other possible alternative, and sort of Paul snift out this DNA and did an utterly brilliant job putting it back in the center of our business strategy and our culture. So it's something that

was very easy to carry forward. Also, frankly, I believe strongly in in this mission as well, and maybe that's partly why he was an enthusiastic supporter of me coming into the role. But it's not been a difficult thing to pick it up and run with it. Yeah, And so it's fascinating that William Lever is kind of an O G conscious capitalist. I would say it sounds like in some ways he is. There is dark sides to

his history as well. So we had we had palmwell plantations in the Congo where we suspect strongly that there was a form of forced labor um. In fact, we've commissioned an academic study with the University of Liverpool to get to the bottom of that. We don't want that to be a secret. If something bad went on back there, then we want to know all about it. But the

vast majority of Leavers activities were holy positive. In fact, I found a brochure recently where for the first football match between Lever brother there's Port Sunlight football team versus Everton FC. Every Everton one one I have to admit. Okay, So pivoting to Unilever today, how do you articulate Unilever's purpose. Yeah, we do articulate the purpose of the company as being

to make sustainable living commonplace. We want to be a force for good as a company that, through our operations and through our brands, we help people to live more sustainable lives. And so I think if you ask most people in Unilever they would be able to see, Yeah, the purpose of the company is to make sustainable living commonplace. It's accompanied by a very clear vision which is we want to be the global leader and sustainable business and

we want to prove that it drives better financial outcomes. Yeah, and I'm sure we'll get into this in a second, but that sits right alongside our purpose, absolutely, And and how would you characterize the dominant system that Unilever is trying to improve upon with that purpose? Yeah, I think this comes back to shareholder capitalism versus stakeholder capitalism. And I would love to go to my grave having proven

two things. I'd first of all, like to prove that there is no trade off between responsible, purposeful, sustainable business and strong financial performance. Any time we get into discussion of well, how do you trade off between the financial performance of the company and the sustainability mission that you're on, then we're doomed because ultimately the need to deliver returns

as a business will prevail. And so I want to prove that sustainable business is a pathway to better financial performance. And the second thing I'd love to prove is that we have multiple stakeholders. They're all important, but I think there's a priority of sequence. If we look after our people, the employees of Unilever, they'll look after the business. They will be the people who will make sure that the actions we take don't have an adverse effect on the

planet or society. And in doing so they will ensure that our shareholders are are better rewarded. So those are the two dominant systems I'd love to have an impact on. One is this stakeholder model which ends up rewarding shareholders better. And the other is scorching this notion that there's a trade off between sustainable business and financial performance. Yeah, I love that, And I wonder if you could talk a little bit about the compass, which is the name for

your business strategy. Can you explain what the compass is and how it works. Sure. Look, four years ago, we had two documents in the company. We had our business strategy and we had our sustainability strategy, and we felt that didn't make a lot of sense, and so we rewrote our business strategy and as five pretty simple elements to it, which is some choices that we've made around high growth spaces we want to take our portfolio into,

like hygiene and skincare and prestige beauty. We've called out the US, China and India as particularly important markets to win in. We've called out e commerce as a must win channel, and we've talked about the organization and culture that we want to build. But the first of the first choice is win with our brands as a force for good, powered by purpose and innovation. And then dropping immediately below that are three areas where we think we

can bring our commitment to sustainable living to life. One is improving the health of the planet and others improving people's health and well being. And the third is contributing to a fair or more socially inclusive world. And again underneath that, there are thirty eight specific commitments that we've made so that the two sides of the coin, our sustainability strategy and our business strategy are fully fully integrated. And are all of Unilever's brands. Do all of them

have a defined purpose? Or are you somewhere along the journey of defining all of those We're on the journey. We're on a journey. Let me first will see how we define it? Yeah, please, you'll be familiar with the idea of continuous tracking, looking at our brands and the competitor brands and the attributes and how we score on

those attributes in the eyes of consumers. Well, we now have a standard question and for all categories in all countries, where we ask, does this brand make a positive contribution to society or the planet. And when in that country a consumer scores our brands as well above average on an index, then we say, okay, that brand in that country is a purposeful brand. And at the moment, to be precise, our turnover now comes from brands that the consumer sets are doing something a little bit more for

society of the planet. Some of our brands are almost entirely seen that way, like Dove or Ben and Jerry's and others are are finding their way. You can't really superimpose a purpose. Most of our brand's purposes we find by excavating archaeology of their DNA and where they've come from. It's very hard to sort of suddenly force fit in terms of the journey that you're on. Is the goal to be a hundred percent at some point? Yeah, I suppose it's an ambition. It happens a little bit organically.

And the reason I say that is our brands that score highly on purpose are growing twice as fast access a little as close to three times as fast now as the rest of the portfolio, and so there's a very natural migration of our portfolio into that space. So, yeah, there will be some brands that never quite get there. But so long as you know, six of our brands are are scoring highly on purpose and are growing three

times faster than the rest of the portfolio. Organically, the vast majority of our portfolio will soon be seen as more purposeful by the consumer. Right. I was listening to an interview of you at a recent Goldman Sachs conference where you said that we found that setting audacious goals goals were not sure how we're going to meet is a very effective way of driving change in our company, and I just wondered if you could talk a little

bit about that, For instance, how do you set those goals? Yeah, probably the easiest way to answer this is not in the abstract, but with a specific challenge, which was we were looking at our decarbonization of the company, and let me maybe just set it up by saying, we're not an n G O TI, We're a business. We're not doing this because of the moral imperative. We're doing because we think it makes us a stronger business with it will have a more successful long term future. UM and

there are dimensions of the business case around growth. I've touched on. Some of our brands are growing faster when they embrace sustainability. There's a dimension around cost. We actually think it should take cost out the organization. Um it lures risk. A planet underwater or on fire is not a place to be a consumer products company. But on this point of cost, there will be a price on carbon. So today carbon is treated as a free good and there's very few places where there's attacks or a price

on carbon of any sort. There absolutely will be so both because we care about climate change, but also because it makes good economic sense to reduce the carbon footprint of Unilever. We wanted to lay out our plan to decarbonized Unilever, and I suggested to our board that we put it to shareholder vote. And this caused a few sweaty moments in in our board meeting because we were worried that some of our shareholders might say, what, you're going far too far, and others might say, well, you're

not going far enough. But we wrote this carbon Transition Action Plan and we put it to a shareholder vote last May at our a g M. And now, coming to actually answer your question, it has some big hairy goals in there, one of which is to be net zero as a company by twenty nine. Now we've got

milestones along the way. So for instance, we want reduction and scope one and two carbon by we want a seventy percent reduction in all emissions by but that endpoint target and net zero by nine, we have no clue how we're going to get there, and it will require innovation. It will probably require reshaping of our portfolio. It will require us to take as much carbon as we can

out of our operations. It will require us to advocate for a decarbonization of electrical grids around the world, because the biggest carbon footprint that you on ever has is the energy that's used in heating the water that's used to wash your skin, wash your hair, wash your clothes, cook your food. That's our single biggest footprints. So and only when we've done all that, we will probably need to do a little bit of offsetting at the end.

So that would be an example of where we've set a goal with no idea how we're going to get there. But I can tell you most people in the company of a feeling that it's the right thing to do, and that by setting the goog will start taking the actions that we need to take. I love that the thing that I think that's really interesting about that is that in traditional shareholder capitalism, companies have been conditioned to

externalize cost. It would be rare of a company, i think, to actually think about the carbon footprint of heating the water that people use to bathe as a part of your responsibility. It's really inspiring that you think about it that way. Well, two footnotes. We were the first company in the world to put our carbon transition plan, our climate Transition Action Plan to shareholder vote. Many have now followed, so we're delighted to see many people now writing their plans.

And the second footnote is that it squeaked through the shareholder vote with six shareholder support. And actually that's a great statistics to understand that the capital markets are starting to care about these types of matters. Absolutely, that's really positive. You've already made tremendous strides as a company over the last decade, and as you look at the challenges that lie ahead, the things that you want to take on.

What are those challenges. Well, there are lots of problems in the world right now, but our view is that there are three that are bigger than the rest. The first is the climate emergency that the impact of climate change on everything is hard to overstate. It's going to be a major major problem for the world. Even if we do the best possible job that we can and managed to get to one and a half degrees above pre industrial levels, it's still going to cause a major

failure of the world food system. It's going to cause massive migration from hard hit areas, so we better be dealing with that. The second, and it's related as a degradation and loss of nature combination of climate change and us chopping down large swathes of for us putting in monocrop agriculture, smashing by diversity. And then the third is

the dramatic increases in inequality that we're seeing country by country. Interestingly, because China has lifted hundreds of millions of people out of poverty, net inequality in the world is not going up, but if you look at it on a country by country level, the tremendous situation inequality and it's getting worse. And those are three of the things that we hope

our business can play a role in addressing. A lot of what Unilever uses as input materials are agricultural raw materials, not just in our foods business, but much of what we use in our personal care products like soap uses agricultural raw materials. And what what we've said is that by twenty thirty we want a hundred percent of our agricultural raw materials to come from regenerative agriculture, where the farming practices leave the land in better place. Let me

give you a really simple example. We buy soybean oil that's grown in the US and uh, a soy field generates abouts of carbon par acre. If you plant cover crops, so low rise plants that can be harvested in amongst the soy that's being farmed, that reduces the carbon output of that acre by five kilograms, So it goes from three of carbon emissions to a hundred and fifty ms of carbon sequestration. That would be an example of regenerative

agricultural practices. We can maybe have a chat about palm oils, material we use a lot of and it's a demonized material, but actually I'd like to make the case for palm oil at some point. Yeah, well, let's let's talk about that now. I no palm oil was mentioned in the context of the history of Unilever in the Congo, so it's long been an ingredient in many of your products.

Where does UNI ever stand with palm oil today? Yeah, there have been horrible things done to nature and the animals that live in virgin forests through the clearing of forests to grow palma. It's shocking. Actually, if you fly over parts of Malaysia, you can see these huge parts of the country that have just been cleared and replaced

by palm plantations. However, palm is an exceptionally productive material, and if you were to try and replace the palm oil that is used to make actually some very healthy foods and a lot of things like soap and other types of surfactants with rape seed or soy, it would require eight times the acreage. So here's our view, where are we to shift away from palm? We would end up destroying large parts of the world with crops that

need more acreage. And there is perfectly sustainable ways of growing palm right now where you use much less fertilizer, where you don't clear virgin land. Instead of using pesticides, we introduced owls onto the palm plantations, and the owls keep the rodent population down, which is a sort of romantic notion. But what Interestingly, what it requires is technology. It needs real time geo mapping coupled with cell phone tracking of truck drivers, coupled with some advanced AI technology.

And we are very confident now that something like of our palm comes from certifiably sustainable planting. That last two or that last one or two percent is we're working hard, spending a lot of money on figuring out how do we get that out of our supply chain. So I touched a bit there on um the climate crisis and some of the things we're doing, some of things we're doing on nature and the degradation of nature. And we've

got a lot of programs running. But I think one that we're very proud of is there's a concept of a fair living wage. It's more than a minimum wage. It's enough money that a family of four could feed, clothes, house, educate and transport themselves. And Unilever, of course pays a fair living wage already to anyone working in our business. But that's only a hundred and fifty thou people. There's

about five million people in our supply chain. And what we've said is that by t anyone who's not able to prove they're paying a fair living wage to their employees will not be a supplier to Unilever, and that we think is the single biggest redistributive action that we can take to try and address inequality through our own operations. I love that once again, just most businesses don't think about the world that way. And obviously I agree with you.

Like the fact that you're getting ahead of it is great, but you're getting ahead of it because it's better business that are ultimately operating in an unsustainable manner. Put the time horizon on your survival essentially as a company. Yeah, you know, we've got a pretty good feel for what that time horizon is and it's because of different attitudes amongst different age cohorts in society. Yes, so baby boomers at least are honest. They don't really claim that they

change their brand choices according to sustainability considerations. I I just creep into gen X and we're worse. We say that we care about sustainability, but don't actually modify our purchasing behavior, So we're dishonest. Gen Y millennials to make gross simplifications, Millennials care about sustainability but are not prepared to pay more and won't accept it if the product performs more poorly as a consequence, jensennials the kind of

next generation consummate cup coming into the consumption classes. Practically the only thing driving and choice is the values of the brand and the values of the company behind the brand. And so this is simply about relevance for the future.

And if you want to be a brand that's still a company, that's still a healthy, successful, thriving company ten twenty thirty years from now, you better be modifying your business practices in a way that are acceptable to the gen's annials that are coming through the population right now. It's so important. In fact, we're called calling bullshit because such a huge number of young people in particular are just calling BS on shareholder capitalism. Um. The entire generation

of consumers is calling BS. And it's a clarion call. Right If you want to run a business, if you want to sell a product in the future, you had better pay attention to this. So I could not agree more. And and when I get challenged about, hey, why are you so obsessed to putting purpose in your brands? You know you some sort of woke capitalist, the answer is hell, no, I just want to make sure that our brands remain real event for the generations that are coming through into

society today. Yeah, exactly. Okay, So I'd love to pivot again and talk a little bit about your leadership and purpose led business. One of the things that I really believe is that no company is is perfect, That being purpose led is a journey, right, and and every company is somewhere along that timeline. First of all, do you agree with that? You know, I mentioned earlier that we've we've got these thirty eight specific targets and commitments that

sit in our compass. Our executive team looks at progress on those every quarter, and in the last review, which was a couple of weeks ago, all of those thirty eight six were green, most of the rest were read. And so so we are a massively a work in progress. And yeah, I guess it goes with setting somewhat stretching ambitions. But we've got so much hard work ahead of is it's a little daunting that last two of palm oil that we're not sure is sustainable. It's going to take

tons of heart. We're gonna have to co invent technology with Microsoft to fix that. I'll tell you one that's really haunting me at the moment is our plastics commitment. We've said that by which is just around the corner, we will have reduced our use of virgin plastic by by using recycled material and sums through an absolute reduction or replacement with other materials like aluminium or would even

can you believe wouldn't there you go? So I'm kind of trembling knees about this plastic commitment because there's a worldwide shortage of recycled plastic. The premium for recycled plastic over virgin material, perversely is rising. And so that's an example where tie we've got our work cut out. I'm not exactly sure how we'll get there, but we're very much a work in progress. So that that leads to another question, which is do you think that leading a

purpose led business is harder? For instance, you have so many more stakeholders to think about, then the CEO of a traditional shareholder led business, is it is the job harder? I don't think so. Really, No, tell me a business leader who doesn't care about her employees, her customers, are consumers, her business partners, societies that you're doing business and the planet and I think I'll be able to show you a business leader that's not getting good results, so it

doesn't deserve to get good results. So it's not unnatural to care for those different stakeholders and make sure their interests are being looked after. And if you do it with deep conviction that the shareholder will be better rewarded at the end of the day. Now, we're also working progress on that. By the way, our financial performance needs to step up to prove this model. But we've we've got a little bit of momentum. We've just did our

fastest year of growth for nine years. Yeah, you've done well in the US here, things are, things are coming along. We have a theory of change, a model that we use on pretty much all the big issues that we're trying to address, whether that's climate or our gender or inequality. Let me use gender as an example. Think of four concentric rings, and that the innermost ring is our own operations. So my job one is to make sure that there's

proper gender representation inside Unilever. And we've gone over the last eight years from a position where thirty eight percent of our managers were women to now of our managers are women. That we've got nine non execs on our board, five women, four men, so we're okay on that. Then the next ring is what we call our value chain. Are we making sure that there's good gender representation in our suppliers, in our distributors, and in some of the

business models that we involve third parties in. That's the next impact that we can have. Then we go to the next level when we think about the impact that our brands can have. We go from reaching millions of people to tens of millions of people. When Dove gets busy helping girls not carry unrealistic images of beauty, or when sunset, it's creating opportunities for women to set up

their own hair salons. And then the outer most ring is what we call advocacy, and that's where partnerships come in and we work with civil society, government, academia to try and change the system. And I think those first three rings most business leaders have to deal with. We have an unusually active advocacy program and that is a little bit of extra work. In fact, I just came from a board meeting of the World Business Council for

Sustainable Development. But you know what, it's very rewarding and worthwhile work. So it's a little bit of extra work, but not really, but you love it. Yeah, it's satisfying, feeds the soul. So are there other leaders of purpose had businesses that particularly inspire you? Oh? Lots, yes, lots and lots. To me, the iconic one is Patagonia, and you know of Asinar and everything that he has set up there and which has been carried on by his successors.

And there's a survey comes out every year of opinion leaders and their views on companies and whether sustainabilities at

the heart of their strategy. I'm embarrassed by the fact that you don Leaver just for the last few years scored number one in Patagonia number two, because I don't think we deserve it at all compared with the deep Remember if are discontinued his his metal petons, which was the core product in his business, because he felt they were damaging the very rock that he was so lovely. We're leaving him stuck in the rock, and he exactly.

So I really admire almost everything that they keep reinventing themselves. You're making fleeces out of PT bottles, encouraging people not to buy a new jacket, come and get it repaired. Their sourcing policies and they're just fantastic. Another one is, yes, we're broadened. Who runs Ikea? Ikea have done such deep work on understanding the climate and social footprint or so the planetary and social footprint of their business, their supply chain, their stores. And I'll give you one more um that

you may never have heard of. A food company that grows fruit and vegetables around the world called Alam. They were founded by a guy called Sonny Vergas. Sonny lives in Singapore, and he has built one of the world's leading agricultural production companies, and he's done it with extraordinary attention to purpose and sustainability. So there's one, and then, of course there's a whole lot of other lists, but

there's three that I particularly admire. Today there are so many more purpose led businesses that actually started with a purpose. So a lot of young companies begin that way, but a lot of older companies sounds like unlike Unilever, didn't begin that way and are now trying to figure out how to make that transition. What advice would you have for other CEOs who are beginning that purpose of the journey.

The first point I would make is entirely predictable, which is, unless you're crystal clear in your mind why it makes you a better business, how it will drive stronger performance, don't start the journey because this is not CSR. This is not some offset where you can buy a clean conscience by donating to a charity or or having a

park made a part built next to your headquarters. Unless it sits at the heart of your business model, driving revenue growth, taking out cost, improving your employee proposition, don't do it because then it's not sustainable. And the second is you don't have to go from zero to perfect, just get started with a few inistas. And it's so rewarding economically and emotionally. It's such a strong thing to build a company culture around that. I believe it will

snowball and catch momentum. And you know, it has to be authentic, but it doesn't have to be perfect. Let's use that as a pivot too, company culture, because it's such a huge part of it. How would you describe the Unilever company culture? We want our company to be human, to be purposeful, and to be accountable. You don't even does have a culture where we treat each other with respect.

If you get the job done, but you're an asshole and you leave a kind of a trail of people who would love to need afterwards, right exactly, then I think our company would tissue reject you like a badly matched Oregon quicker than the average company. So being human and with that comes you know a lot of friendships. Not too hierarchical. I mean every company is get some hierarchic. We're not too hierarchical. Um, So that's the human The

second is purposeful. We believe that, Um, this is a bit slogany, but we do believe that brands with purpose growth, that companies with purpose last, and that people with purpose thrive. And we've putting out fifty thou people through purpose workshops to try and understand is the thing that makes them take well aligned with the work that they're doing it you'll leave. And when people find that alignment, my goodness, it cements their commitment to the company that you can

see job satisfaction scores that are through the roof. And so that's the purposeful part of our culture, more human, more purposeful. And then the accountable bit is we want people who are prepared to take risks. We want people who are prepared to have a go for people who understand that, you know, poor performance plus a good excuse is still poor performance. And and those are the kind

of three ways we describe our culture. I think it's one thing it doesn't capture, which is we are extraordinarily international. There is no dominant nationality in our business. And I love that. I'm sort of looking out my office here and I can see a melting pot of different nationalities. And typically a French company would be full of French people, and American company full of Americans and so on. Truly global. And are there certain things that you look for in

a new employee? Is there a Unilever type? Over the years I've been trained on all these different competency frameworks and what to look for a reference to that have stuck with me. One is very simple. It's that people are successful in our company tend to be strong masters of their inner game, so that they're very self aware, they control their emotions reasonably well, and they operate out

of a sense of service and purpose. And that is a precursor to mastering your outer game, which is your expressed leadership, your drive for business performance, your passion for consumers and customers. I think it's an interesting concept that you have an inner game in an outer game and both need to be performing at a high level for for someone to do well. The simple kind of Alan Joke criteria after thirty odd years of kindiring people is

I want people who are are smart. Uh, got a bit of EQ and a bit of i Q. Who are quite driven. They've got they can show that they get around obstacles. And the third is that they're nice, kind people that other people want to be around. And I could just think of my kind of leadership team. They are all bright, they are all driven, and they are all someone you'd want to appear with. Yeah. Yeah.

One of the criteria I use is if I were stuck in an airport with this person for an unexpectedly long period of time, would that be a good thing or a bad thing? Exactly? Uh. One of the things that you touched on that I'd love to just talk about a little bit more is talent and the effect that being purpose lad has on your ability to attract talent. Yeah. We measure our attractive us as an employer for undergrads coming out of university in h forty four countries around

the world. In forty two of them were the employer of choice in our sector, and ten years ago that was seventeen. So we have no problem attracting really high quality graduates coming out of university. In fact, we get two million job applications a year across the company. But I think what's maybe more interesting is we've been able to attract some really senior executives and indeed board members who would have a pick of the places they could work.

And the universal reason is because they want to understand or be part of a company um that is operating in a responsible fashion. Whether you call it purposeful or responsible or sustainable, it's the same threat that is acting and to attract senior and junior folks, and we've got really hard data on this guy. I was surprised to hear that we're the third most followed company on the world on LinkedIn, after Apple and Google. You know, a

sleepy old soap maker. Not bad, very cool. Okay, I have a couple of questions that I want to ask you to wrap up. I'm just curious about this. You've acquired a number of certified B corps over the years, I think seven or eight of them, and I just wondered if there were any plans to become a B corp at the group level. Yeah, we've studied this at least twice that I know of, in in excruciatingly detail. BE corps certification is not designed for enterprises the skill

of Unilever. We would need to create an entire industry of certification around the company, every operation in a hundred and ninety countries, multiple divisions, multiple brands, and it would cost an absolute fortune. And it is It is doable. It's just about doable. I would love for you Deliver to be a B corp. But the bragging right, so becoming a B carp are not commensurate with the cost an effort that would be required to achieve that certification. Yeah,

now that completely resonate. Okay, so two questions to wrap up. First of all, what have I not asked you about that you think that our listeners should know about you or about you know Leaver? You know I asked you know.

The share price has been languishing a little bit for the last couple of years, and I I think, in the spirit of the name of the podcast, all these all these fine words that I've been saying about all the wonderful things that we're doing in the world, Well, why you know, shouldn't it be more visible in the share price? That's the that's the really sting or tough question. And the short answer is we've surprised the stock market

three times in the last three years. We under undergrew what we said we would do in two thousand nineteen. So in December two thousand nineteen we announced the sales warning and that called the market off guard. In the first year of COVID twenty are operating margin went backwards by sixty basis points when the market wasn't expecting it. And then the third one, I think is a little harsh.

We were the first company at the gate um to call attention to inflationary pressures that were coming in mid twenty and so we are well exactly, but the one day dropping our share price on those three days explains the entire discount to our sector and what it says. It's great to be sustainable, what's great to a super year of growth last year, but in our particular sector, the sort of predictability and reliability of performance really matters as well, and there's I make no excuse for that.

There's no reason why UNI leavers shouldn't deliver what we call four G growth, which is consistent growth, competitive growth, profitable growth, and responsible growth. And that's still in the to do list. And just to follow up to that, you discontinued quarterly reporting a while ago, a decade ago.

Does that help or or hurt? Yeah? When we say we dis continued quarterly reporting, kind of so we still report our top line and our growth every quarter, and we report our fool p and now the bottom line semi annually, so at the mid year. So really what we stopped doing was reporting profits at the end of Q one and the end of Q three. And I would say it's materially helpful. It gives us flexibility to invest in the business within a half rather than constrained

by the particular phasing that a quarter would demand. I think it's a good thing, but it's not all the way to you know, we abandoned quarterly reporting, I don't think right. Okay, now, thank you for the clarification on that.

I appreciate it. Okay, Allen on calling bs UM, we have a question that we ask every guest So we define BS as the gap between word indeed in the organization, and we have a tool that we call the BS scale where we rate organizations on that gap, zero being the best zero gap between word indeed and a hundred being the worst total bullshit. So, taking into consideration that everything is a journey, where would you rate Unilever on

that scale today? That's interesting. So if it was the gap between ambition and where we are today, uh, then it's a high number. It's a high numbers, you know, sixty. If it's the gap between what we say and what we're really doing in the company, then it's quite a low number because we are very transparent. No, I think it's the latter. I think it's gap between what you say you stand for and where what your intention truly is.

Then I would say, I think we are quite transparent, and we report a lot, and there's not a huge gap between what we say we're doing and what we really are doing. So I'd give us, but there's obviously some so I'd say, I don't know, live and in a in a company of your scale, I just have to say, I think that's extraordinarily low. So I'm very inspired by what you're doing, and I want to thank you for being on the show today. This has been great. Does that mean you're not going to wrap up by

saying you're fool of sh it? Nope, you're off the hook, not full of ship not but not on our scale. Okay, not on our scale. Well, it's uh been a while since we saw each other. Thank you very much for having me on, and uh maybe we can follow it up sometime and me meanwhile, look forward to that beer together. Thanks for having me. I'd like to end the show today by giving you a lever our official BS score.

Our scale goes from zero to a hundred. A zero means zero gap between word and deed, and a hundred means the gap is huge. Total BS Alan gave you a lever between a twenty and five. Based on what I've heard today, I'm going to agree and give him a twenty. I see all kinds of promising signs that

this company is really trying, starting with leadership. The sheer size of this company makes it much harder to live up to their purpose, but it also means that when they do meet their ambitious goals, the impacts are huge. Alan is clearly passionate about getting things right, and his enthusiasm informs every aspect of the business, driving real change.

The company is also quick to admit when it falls short, and they're willing to acknowledge the problematic areas of their history, which is why as time passes, I expect their score to actually go down. But Alan's retirement announcement comes at a time when the company is under intense pressure to focus on short term financial results rather than on the

long term goal of building a sustainable global company. While he's still at the helm, Alan is using unili purpose to steer the ship, but we'll be keeping a close eye on what happens once leadership actually changes. To weigh in with your thoughts, visit our website Calling Bullshit Podcast dot com. You'll be able to see where you know leave our ranks on BS compared to the other companies

and organizations we feature on the show. And if you're starting a purpose led business or you're thinking about beginning the journey of transformation to become one, here are three things that you can take away from this episode. One set ambitious goals. As Alan pointed out, it's by setting goals that at first seemed unachievable that real change happens in an organization. The goal keeping him awake right now is cutting the use of plastics by in one of

the largest package goods companies in the world. So what's yours? Two? Your business strategy and your purpose are not separate things. There are two aspects of one thing. The problem in the world that you exist to solve. Your purpose is why. Your business strategy is how, and when you get it right, profitability is a natural outcome. Three. There is a timer taking on businesses that don't make the shift to being purpose led, and it's going off in about ten years,

maybe even less than that. Why Gen's annuals, they're voting with their wallets for companies that are trying to solve some of the big problems in the world. They will decide what businesses thrive and what businesses fail in the future. Don't wait to establish a relationship with them. Start now. And if you had fun on this trip across the universe, subscribe to the Calling Bullshit podcast on the I Heart radio app, Apple Podcasts, or wherever you listen to people

speaking to your ears. And thanks to our production team, Hannah Beal, Amanda Ginsburg Andy kim D s Moss, Hayley Pascalites, Parker Silzer, Basil Soaper and me Jean Zulu. Calling Bullshit was created by co Collective and is hosted by Me Time Monte You thanks for listening.