Unilever Scales Back Environmental and Social Pledges Amid Shareholder Pressure

Unilever scales back environmental and social pledges under new CEO, drawing criticism from environmental groups as it prioritizes financial performance over sustainability goals.

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Unilever Scales Back Environmental and Social Pledges Amid Shareholder Pressure

Unilever Scales Back Environmental and Social Pledges Amid Shareholder Pressure

Unilever, the consumer goods giant known for its ethical commitments, has scaled back several of its environmental and social pledges under its new CEO, Hein Schumacher. The company is reducing targets for cutting virgin plastic usage, abandoning a pledge to pay suppliers a living wage by 2030, and dropping other commitments related to diverse businesses and employing people with disabilities.

Schumacher, who took over from Alan Jope in 2023, has decided to cut back a target for reducing virgin plastic use, which will result in Unilever using an additional 100,000 tons of fresh plastic per year. The company has also pushed back its commitment to make all packaging recyclable, reusable, or compostable by 2025 to 2030 for rigid materials and 2035 for flexible components.

The shift in Unilever's ethical stance comes amid pressure from shareholders to cut costs and focus on stock market performance. The company has faced worsening performance, with its shares falling 8% since Schumacher took over in 2023. Investors like Terry Smith have accused Unilever of "virtue-signaling" and prioritizing social and environmental issues over business fundamentals.

Why this matters: Unilever's decision to scale back its environmental and social commitments highlights the ongoing tension between corporate sustainability goals and shareholder demands for financial performance. The move has drawn criticism from environmental groups and raises questions about the long-term viability of corporate social responsibility initiatives in the face of market pressures.

Schumacher has defended the changes, stating that Unilever needs to be more focused in allocating resources to make tangible progress on its sustainability agenda. He cites a "cyclical" focus on environmental and social issues, saying the company still wants to "make a difference" but needs to balance these goals with financial performance.

Environmental groups have criticized the company's backtracking, with Greenpeace UK saying Unilever's bosses "should hang their heads in shame" for the "ruinous impact of their plastic pollution." Despite the changes, Unilever's decarbonization targets remain unchanged, and the company maintains that it is focusing on "fewer things and with greater impact" through a new "realistic" Climate Action Plan.

Key Takeaways

  • Unilever scales back environmental and social pledges under new CEO Hein Schumacher.
  • Unilever reduces targets for cutting virgin plastic usage and delays recyclable packaging goals.
  • Shift in Unilever's ethical stance due to pressure from shareholders to cut costs and focus on stock performance.
  • Unilever defends changes, citing need to balance sustainability and financial goals.
  • Environmental groups criticize Unilever's backtracking, but company maintains decarbonization targets.