Are there business advantages to using green suppliers

Assignment Help Business Economics
Reference no: EM131193061

Assignment

Unilever's Sustainable Living Plan

Sustainability is all the buzz in business and is quickly becoming a mainstream topic. Governments as well as customers have been urging corporations to make themselves sustainable; but what does that mean?

What Is Sustainability?

Sustainability is acting to meet the needs of the present generation without compromising the ability of future generations to meet their own needs. For individuals it is a life style that attempts to reduce an individual's or society's use of Earth's natural resources. The European Union has adopted sustainability as an official policy, urging companies to follow sustainable practices as a means of achieving their corporate social responsibility goals to contribute to a better society and a cleaner environment.

Unilever's Sustainability Plan

Talking about sustainability is one thing; doing it is another. In late 2010 one company, Unilever, took action by unveiling its global Sustainable Living Plan. Launched simultaneously in London, New York, Amsterdam, and New Delhi, the plan will affect all of Unilever's stakeholders worldwide-customers, suppliers, investors, employees, and the local communities where Unilever products are sold. It's not unusual for a company to try to reduce its CO2 emissions or to reduce waste and water usage in its own manufacturing facilities. But Unilever's plan goes far beyond its plants. According to the company's management, more than two-thirds of greenhouse emissions and half the water in Unilever products' life cycles come from consumer use. Therefore, extending the plan to include consumers is a commitment on an unprecedented scale.

Accomplishing the Company's Sustainability Goals

How will Unilever accomplish its sustainability goals? Technological advances will enable the firm to achieve some. The company is developing products such as laundry detergents that work at lower temperatures and bath soaps that reduce the amount of hot water needed in showers and baths.

The company will accomplish other parts of its plan by requiring that suppliers meet sustainability goals.

Finally, Unilever will meet some goals by changing consumers' habits. For example, by 2015 Unilever aims to change the hygiene behavior of 1 billion consumers across Asia, Africa, and Latin America by promoting the benefits of hand washing with soap at key times. Though this may seem rudimentary by Western standards, every year more than 3.5 million children die before age five due to diarrhea and acute respiratory infections. Much of this is from poor hygiene habits.1

Overall, through its ambitious sustainability plan Unilever intends to (1) improve the health and well-being of more than 1 billion people; (2) purchase 100 percent of its agricultural raw material from sustainable businesses; and (3) reduce the environmental impact of everything it sells by one-half over the next 10 years while doubling its revenue. The major challenge the company faces is to increase sales without also increasing its environmental footprint. Dave Lewis, President of Unilever America, recognizes this dilemma: "We cannot choose between growth and sustainability. We have to do both."

Critics of the plan point out that much of its success depends on changing consumer behavior, which is largely beyond Unilever's control. Probably more important, critics question whether the adoption of the plan will contribute to Unilever's bottom line. Being green and socially responsible are all well and good, but a public company needs to make money. A company that is not financially successful is not sustainable, good intentions notwithstanding.

Integrating Business Strategy and Sustainability Strategy

What makes Unilever's plan so intriguing to many is the way it integrates business strategy and sustainability strategy. Let's take one example: health and hygiene. Unilever claims it will use its Lifebuoy brand soap to encourage more hand washing in an effort to reduce diarrhea and respiratory diseases spread by germs. It will use its fluoride toothpaste and toothbrush brands to encourage brushing twice a day, which will reduce tooth decay in children by 50 percent compared to brushing once. It will make safe drinking water available to 500 million people through its affordable Pureit in-home water purifier. Through its Dove Social Mission, Unilever intends to use one of its best-known brands to enhance the self-esteem and thus improve the mental health of young women around the world.

Large companies are often criticized by non-governmental organizations (NGOs). In the past, as a company headquartered in Europe where NGOs are particularly active, Unilever has been a target of such criticism. A common corporate strategy is to fight back. However, with its Sustainable Living Plan, Unilever has endorsed many NGO recommendations. For example, Unilever will use eggs from 100 percent cage-free chickens in all of its products-a common demand from animal rights NGOs. All Lipton tea will be purchased from Rainforest Alliance certified suppliers. Even Ben and Jerry's ice cream will be made from ingredients that are fair-trade certified.

In rural India, Unilever plans to link 500,000 small farmers into a unified supply network to improve their farming practices. The farmers will be required to adhere to Unilever's Sustainable Agriculture Code and for the first time will benefit from economies of scale that can improve their lives. What's in it for Unilever? It will gain a vastly expanded network of sustainable suppliers producing products at competitive prices. Building an adequate source of supplies is especially critical in a world where food shortages may become more common.

Critical Concerns and Responses

Is Unilever simply using the sustainability mantra as a device to increase its profits? To its critics, Unilever's motives are suspect. They claim it is pursuing sustainability, not because it is the right thing to do, but because it is good business. But are these two goals mutually exclusive? Can a firm's strategy seek to be profitable and sustainable? What's wrong with doing well by doing good? Nothing, according to Unilever management. They intend to lead the way in being a profitable, sustainable corporation.

DISCUSSION QUESTIONS

1. Should Unilever's stockholders endorse its sustainability plan? Why or why not?

2. Are there business advantages to using sustainable or green suppliers? If so, what are they? If not, do you think a traditional return on investment analysis captures all possible benefits of going green?

3. Are there any ethical criticisms of Unilever's sustainable living strategy? If so, what are they?

Reference no: EM131193061

Questions Cloud

What is conflict behavior : What is Conflict behavior? (Very short but good answer is needed, plagiarism does not matter, I will paraphrase it myself).
Mortgage loan with an apr : You take out a 30-year $300,000 mortgage loan with an APR of 8 percent and monthly payments. What are the monthly payments? In 16 years you decide to sell your house and payoff the mortgage. What will the principal balance on the loan be?
Write the balanced chemical equation for the reaction : When a hydrocarbon burns in air, what reactant besides the hydrocarbon is involved in the reaction? What products are formed? Write a balanced chemical equation for the combustion of benzene, C6H6(l), in air.
Prepare the document as to be submitted to your cio : provide a 1-page document outlining the fundamentals and competitive advantage of the system. Prepare the document as to be submitted to your CIO in the EMR adoption decision process.
Are there business advantages to using green suppliers : Should Unilever's stockholders endorse its sustainability plan? Why or why not? Are there business advantages to using sustainable or green suppliers? If so, what are they?
How can you tell which beaker is which : Three beakers contain clear, colorless liquids. One beaker contains pure water, another contains salt water, and another contains sugar water. How can you tell which beaker is which? (No tasting allowed!)
Explain the main reasons why you believe will be the case : From the e-Activity, choose the one (1) emerging technology you believe will have the biggest impact on telecommunications and network security within the next two (2) years, and explain the main reasons why you believe this will be the case. Just..
Identify the organization and its core business : The body of your presentation should include summary information from your three case files and should follow this outline. Identify the organization and its core business.
Which of these are metals and which are nonmetals : Four of the boxes in the following periodic table are colored. Which of these are metals and which are nonmetals? Which one is an alkaline earth metal? Which one is a noble gas?

Reviews

Write a Review

Business Economics Questions & Answers

  Economics assignment

This document contains various important questions and their appropriate answers in the subject field of Economics.

  Demand and supply curves

Economics is the study of the principles governing the allocation of scarce means among competing ends when the objective of the allocation is to maximize the attainment of the ends.

  Long-run perfectly competitive equilibrium for the firm

Evaluate Government intervene and correct this situation?(a) Explain the concept of a concentration ratio. A rise in the price of magarine Explain the impact of external costs and external benefits on resource allocation long-run perfectly c..

  Supply and demand diagrams

Explain each of the following using supply and demand diagrams,  With the use of a graph, explain how these two programs affect cigarette consumption and the price of cigarettes.

  Case study: fisher-price toys

The case study of the Fisher-Price Toys, Inc., a popular case in basic economics and management from the prestigious Harvard Business School.

  Draw the production possibility curve

Draw the production possibility curve and a. Define consumer surplus and producer surplus.

  Tax revenue

The Australian government administers two programs that affect the market for cigarettes

  Maximize total welfare

How many tickets to sell to maximize total welfare.

  Difference between the cv and the ev

The change in consumer surplus (?CS) is not "theoretically" justifiable like the CV and EV but it continues to be the most widely used measure of consumer welfare change. Explain how this can be reconciled

  Depict von neumann-morgenstern utility index u in a diagram

Depict the von Neumann-Morgenstern utility index u in a diagram

  What is the market solution

What is the market solution (market price and quantity) and What is the total surplus of the society under the market solution

  Calculate gross national product and net national product

Calculate gross national product and net national product

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd