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Weekly Short
3 November, 2023
Put like that, probably not. But for several years, the powers that be at Unilever would have had you believe it could (or at least, that it could make a meaningful contribution). Under previous CEOs, the consumer goods giant set ambitious sustainability goals and every brand needed a purpose. Now incoming CEO Hein Schumacher has labelled this an “unwelcome distraction” from the business of making and selling products profitably. He has said the business is “spread too thin” (unlike, one assumes, his aspirations for the company’s condiments).
For some brands, purpose will still be central to marketing and positioning. And arguably the Hellmann’s campaign around “make taste not waste” was one of the stronger purpose-led strategies in the Unilever portfolio. But he has also said that “not every brand should have a social or environment purpose. And we don’t want to force fit that on brands unnecessarily”.
It may be a surprise to some to learn that we think he’s right. Can a jar of Bovril really have a societal purpose? Or should it in fact be a jar of beef extract that takes its social and environmental responsibilities seriously? We’d argue the latter; force fitting purpose onto everything risks being a distraction. And in Schumacher’s defence, he’s tightening and thus improving the business’s focus on sustainability, emphasising four key areas where it has the biggest impact, namely climate, plastic, nature and livelihoods.
That said, we do take issue with his timing. If the poster child for doing business well is now walking back so publicly on purpose, after so much was staked upon it, what does that mean for those who are committed to creating genuinely purpose-led businesses and who find themselves caught in the cross hairs of the culture wars as a result? Schumacher risks adding to the already deafening drumbeat of criticism around purpose, sustainability and “woke capitalism”, giving fuel to critics who believe – despite all the evidence to the contrary – that a company’s sole reason for being should be to make money for its shareholders, by any (legal) means possible. For those already struggling to bring reluctant boards along on this journey, this is not going to help.
As with many things, nuance is everything here. Not all purpose is good, but that doesn’t mean purpose is bad. Bad purposes may get in the way of business success, just like any bad business strategy. But some bad or misguided business strategies don’t mean that all business strategy is bad or misguided. Unfocused sustainability that prioritises the wrong things is not helpful, but that doesn’t mean that businesses should not focus on significant areas of impact and create value through doing so.
By Claire Jost