CW2-UNILEVER CSR STRATEGY

M078LON- 1516SEPOCT

PATRICIA ELLEN-6900100
AGNNES TAYLOR
Word Count - 2518

Executive Summary
Unilever is a British-Dutch multinational corporation which become one of the worlds
leading suppliers of fast moving consumer goods. Having more than 400 brands in
around 190 countries make Unilever sell 170 billion Unilever pack s around the world
every year. Unilever has aim to create better future, help people feel good,look get
more out of life with brands and services that are good for them and good for others
(Unilever, 2016). The company strategies are highly involved in CSR since their
strategy is to make sustainable living commonplace. In 2010, Unilever has launched
the Unilever Sustainable Living Plan as their blueprint for sustainable business.
The analyses through 6 core characteristic, Three domain model from Carrol and
Husted & Allens 7-step model will help to address Unilevers CSR strategy. Unilever
has success delivered 6 core characteristic CSR and apply it in their strategy and
action. Their vision is to grow their business, while reduce their environmental effect
and increase their positive social impact (Unilever,2016). From the analysis of 3
domains by Carrol, Unilever has applied the economic/ethical categories through its
strategy. Moreover, to achieve the aims based on USPL,Unilever use reciprocal
strategy.
Furthermore, CSR strategy approach focus on ecological responsibility approach,
social

welfare

approach

and

employee

recruitment-retention

approach.

Recommendation also provided in this repost in terms of its CSR. It includes how to
improve Unilevers CSR in environment, recommendation to improve recruitment
and retainer employees and in terms of social welfare.

Table of Contents
Executive Summary...................................................................2
1.0

Introduction...................................................................... 3

2.0

Theoretical Background of CSR..........................................4

2.1

The 6 Core Characteristics..............................................4

2.2

Three- Domain CSR Model..................................................9

2.3

Husted and Allens 7-step model......................................11

3.

Unilever CSR strategies approach...................................12

3.2

Ecological Approach........................................................12

3.2

Social Welfare Approach..................................................13

3.3

. Employee Recruitment and Retention Approach..............14

4.0

Recommendation............................................................15

4.1

Ecological Approach........................................................15

4.2

Social/ Customer Welfare Approach..................................16

4.3

Employee Recruitment and Retention Approach................16

5. Conclusion......................................................................... 16

1.0 Introduction
Unilever is multinational corporation which become one of the worlds leading
suppliers of fast moving consumer goods, such as beverages, cleaning agents,
foods, and personal care products with more than 400 brands in over 190 countries
(Guardian,2010;CSRwire,2016). As the 109 biggest market value in the world,
Unilever success generate 53.3 billion turnover and increase their sales growth
from 2.9% to 4.1% in 2015. (Forbes,2016; Unilever,2016) .
CSR has become the most popular topics in recent year, especially in the business
world. According to Dahlsrud (2008) The definition of CSR is different from one to
another because there are so many definition of CSR but Moir (2001) stated that to
achieve sustainable growth in the business, company should conduct CSR since it
help company have sustainability business in responsible way. However, it is
appropriate that the company have responsibilities to the society , especially in the
aspect of economic, legal, ethical, philantrophic ( Carrol,1979)
Unilever has success become a sustainable business and defines sustainability
broadly. They have vision to not only grow their business, but also reduce their
environmental effect and increase their positive social impact (Unilever,2016). Since
2010, they annouched Unilever Sustainable Living Plan to achieve the sustainable
business. Unilevers sustainability include in environmental factors, society,and
improving not only a lot of workers and customers, but also its supply chain. Based
on the survey conduct by GlobeScan, Unilever has ranked first for the Sustanability
Experts for the fifth consecutive year (The economist,2014 ; Unilever, 2016).
This report will analyze the Unilevers CSR strategy and its approaches based on the
theory used. Recommendation to develop Unilevers activity also will be examined
in the last report.

2.0 Theoretical Background of CSR

2.1 The 6 Core Characteristics
The 6 core characteristic of CSR should be understood by the company in order to
achieve the aforementioned advantage. This model help the company to incorporate
CSR into companys strategy (Crane et al, 2014).

The Unilever strategies in CSR will correlated with 6 core components that described
on table below.

CHARACTERISTI

EVALUATION

C
CSR can be describing as a voluntary activities that exceed
1. Voluntary

the legal minimum that prescribed by the law .However,

there is much debate about CSR initiatives which conducted
by the industry bodies is regarded as the way to avoid
additional regulation through compliance with societal moral
norms (Crane et al, 2014; Hamidu et all, 2015)
1. In 2015, Unilever sign the Voluntary Living Wage
which they agree to pay their staff at least 8.25 per
hour, even the rate for national minimum wage is

6.70 per hour and 7.20 for the Governments

National Living Wage rate. This action in order to
make sustainable living commonplace (Eatout,2016)
2. Unilever signed voluntary Conservation Initiative
commits to change all HCFCs and HFCs used as
E

2. Managing
Externalities

Hamidu et all (2014) emphasized that externalities indicate

all the factors that are not taken into account in business
organizations decision making process but still has impact
on different stakeholder. Environmental degradation, such
as pollution is the best example since the general public
bear the impact of manufacturers action. Otherwise,
Johnston (2012) argued that externalities can be dealt
through dealing between the creator and the victims or
instrumental regulation.
Unilever manage its externalities based on their Sustainable
Living Plan such as ;
1.

Focusing in 3 areas ; eliminating deforestation

,sustainable agriculture &smallholder farmers, and
water sanitation& hygiene. In 2013, Unilever deals
with Wilmar to only provide products that are free
links from deforestation and human right abuses.
Moreover, through their Domex(Domestos) Toilet
Academies, Unilever support Indian governments in
their programs to improve sanitation in India.

(Unilever,2016)
2. Unilever has program to reduce environmental impact
through reduce in CO2 from water and energy in
manufacturing. Since 2008, Unilever already reduce it
by 37% an 32% per tonne of production respectively.
Since 2010, Unilever success reduce waste impact

per consumer use by 12% through provide products

such as deodorant spray (Unilever,2016)

3.Multiple

CSR take into consideration various of impacts and

Stakeholder

interest not only for shareholder but also for multiple

Orientation

stakeholder.(Crane et all,2014). According to Hediger (2010)

,this attributed to the implication of the alteration from the
pure shareholder viewpoint of maximizing profit to multiple
stakeholder concerns and values
Unilevers strategies implicate multiple stakeholder, such
as :
The shareholder, consumers,

,suppliers, employees, and

local communities.
1. For the consumer, Unilever make sure that all their
products provide what the consumer wants with the
advantage that they need and they can trust. For
example, Unilever through their products Knorr
launched 100% natural mealmakers in order to
response to changing consumer preference and
growing demand for more authentic, fresh, natural
and sustainably sourced foods (Unilever,2016)
2. In terms of society, Unilever establish The Unileveer
Sustainable Living Plan (USPL ) which has positive
impacts for the society. Its core goals include to
reduce environmental, improve health and well-being,
and enhance livelihoods. For example, Unilever and
GAIN (global Alliance for improved Nutrition establish
a Nutrition Intervention Programs in order to improve
the health and nutrition of more than 2.5 million rural
people.
3. Unilever has aims to create working environment that
not only respect the interest and human right of their

employees, but also has value in terms of gender

quality. Unilever create program UN Women in 2015,
to create economic opportunities for women in
Unilevers value chain. Moreover, this programs help
to reduce unpaid care work and increase safety for
woman. For example, in Konya Ice cream factory,
20% of their engineers employed are women
(Unilever, 2016)
4. For their shareholder, Unilever ensure to generate
maximum profits to their shareholders over the long
terms. Through their Sustainable Living brand,
Unilever has success increase their dividends by
6% , their NV shares and PLC shares ending the year
up 11% and 23% respectively.
4.

Alignment

social

of Some argue that CSR should focus on shareholder and

and profitability, while the others contend that it is about

economic

enlightened

self-interest

where

social

and

economic

responsibilities

responsibilities are aligned There debate is correlated with

the balance of different stakeholder interest conduct to
another core feature (Crane et all,2014; Hamidu et all
(2014).

As long the firms capable to become socially

responsible, the economic benefits can be achieved.

It can be stated that Unilever focuses on enlightened selfinterest since all their strategy is put CSR as their integral
part of the companys business but still success double size
its business. For instance, Unilever benefit from create drip
irrigation projects by saving 200 million annually whilst
creating more than 1000 jobs. This programs have aims to
save water and reduce the need for pesticides for soybean
farmers ( Lozanova,2015)

Practices

and Crane et al (2014) stated that CSR practices is constituted

Values

by set of values and philosophy which become an evident

about the communitarian who value the traditions and
cultural practices of their local communities (Lei,2011). For
example, the personal values of the managers in the
company will effect towards their work (Duarte,2010)
Unilever

has

determine

their

values;

integrity,

responsibility, respect, and pioneering (Unilever,2016) .

Therefore, USLP can be accounted as a form of its practice.
USLP has various programs that give positive implication for
Beyond

the society.
Grayson and Hodges (2004) stress that CSR is more than

Philanthropy

philanthropy , but its eligibility to become strategic in firms

strategy in order to satisfy stakeholder expectation and to
achieve companys objectives.
According to Kees Van Der Graaf, the size of company give
it leverage to achieve social aim in ways that go beyond
philanthropy

(Edmondson,2014).

For

example,

when

Unilever operates in South Africa, they made it clear that

their company against apartheid right and ensure that
Unilever employees had equal right in the company. They
threat will leave the country if the people dont like it, since
the Unilevers direct and indirect employment account for
1% in South Africas workforce (Edmondson,2014).

2.2 Three- Domain CSR Model

Carroll and Schwartz(2003)categorize CSR model into 3 categories : Ethical,
Economic and Legal. This model is modification from Carrolls Pyramid of CSR,
which presented in Venn diagram. Having 7 categories with overlapping areas, this
model is advantageous since it provides various domains that allow firms to work in
different overlapping areas.

Schwartz and Carroll (2003) stated that economic domain consist of activities which
are expected into direct or indirect economic condition of the company in order to
generate share value/profit. Moreover, the Legal domain examine about the
companys responsiveness to legal expectation but also expected by society in the
form of law regulations. While the Ethical domain can be described as companys
ethical responsibilities which expected by society and stakeholder.
With the model above, it can be observed that Unilever is considered as Economic/
Ethical categories through its strategies. In terms of economy, Unilever through
USPL have strategy to achieve shareholder growth that is consistent, competitive,
profitable and responsible(Unilever,2016). In 2015, Unilevers dividend has increase
by 65% and share price for NV and PLC shares increase by 23% and 11%
respectively. The free cash flow was 4.8 billion compared with 3.1 billion in 2014.
The business also show improvement for the sales of every categories products. For
example, through Unilevers Sustainable Living brands such as Dove, Lifebuoy and
Signal ,Unilever success increase the turnover for personal care products into
20.1billion and underlying sales growth by 4.1% .The reason is the products has
meet consumers demand for responsible business and enjoy stronger, sustainable
growth. (Unilever,2016 pg 18)

From ethical perspective, Unilever has conduct many programs that show that
they are ethical company, such as zero waste mission. This program has success
eliminated more than 140.000 tonnes of waste since 2008. For instance, in St
Petersburg factory Rusia, their tea bag paper is recycled into wallpaper, waste
mayonnaise from Purfleet factory is transformed into plastic laminates and biofuel in
UK. Otherwise, in Africa is turned into school desk.
2.3 Husted and Allens 7-step model
Instrumental CSR theory can be describe through Husted and Allens
approach in 7-step model which reflected on the first set and examine alignment of
social and economic responsibility (Crane et al, 2014:447). This model helps the
company guide to implement their CSR strategy since it examine the implementation
of social strategy.

Based on Husted and Allens 7 step model it can be seen that Unilever has
well- organized strategy. Unilever has long-terms strategy of its brand and categories
in order to grow the merit of all stakeholders (Unilever,2016). They put CSR strategy

for their sustainable business. Nowadays, their strategy is for making sustainable
living commonplace.
Since 2010, Unilever announce Unilever Sustainable Living Plan and the
progress show that Unilevers CSR initiatives not only focus to double size their
business but also reduce their overall environment impact, increase their positive
social impact, saving cost and fueling innovation (Unilever,2016). For example,
Unilever Lifebuoy campaign has success reduce Diarrhea from 36 % to 5 % at once
increase the growth of sales. Furthermore, the Unilevers campaign Brush Day and
Night not only success encourage people to adopt good brushing habits but also
success increase the sales by 22% since 2008 (Roth, 2013)
It can be concluded that Unilever use
strategy seems

the reciprocal strategy since their

enlightened self interest outright solve the conflict not only

between social and economic objective but also moral, social , and environmental
expectation of society. Moreover, this strategy has two fold purpose : give the
positive implication for the society ,whilst driving profitable growth for the business.
(Crane et al,2014).
Moreover, it can be seen that Unilever also adopts a mixture of supplement public
responsibility strategies (Valenten and Crane 2014). The supplement strategies can
be examine through Lifebuoy handwashing programs to teach the children the
benefits of washing their hands and help reduce killer disease such as diarrhea and
saving lives at scale. The other example is through Nutrition Intervention Programs
in order to improve the health and nutrition of more than 2.5 million rural people.

3.0 Unilever CSR strategies approach

3.1 Ecological Approach

According to Hoffman(2001) company start realize that have effective

management of its ecological environment was an important part of doing business.
This is due to the growth of acknowledgement among company and the changes of
ecological responsibilities from heresty to dogma. Moreover, human activity and
industrialization has led to degradation in sustainability of ecological environment
(Crane et.al ,2014).
Since announced Unilever Sustainable Living Plan in 2010, Unilever has
committed to reduce its business impacts from their growth at once increase its
positive social impact (Unilever2016). To reduce environmental impact , Unilever has
4 focus in their programs, such as greenhouse gases, water use, waste &
packaging, and sustainable sourcing.
For example, In terms to overcome the waste& packaging in Europe, in 2014,
Unilever announced that their products, Dove Body Wash Bottles will contain at a
minimum 15% less plastic. By doing this program, Unilever can save up to 275
tonnes of plastic a year(CSRwire,2014). Moreover, to achieve 100% Zero NonHazardous Waste to Landfill, Unilever apply the 3Rs principle: reduce, reuse, and
recycle. Unilever in St Dizier-France, separate the waste of ice cream from
packaging via a screw compressor, and passed on to create biogas.

For this

action, Unilever can save 50, 000 per annum (CSRwire,2014).

According to Crane et all(2014) , responding to natural disasters also one of
the core of ecological approach .Unilever shows their consistency through supports
relief work in Philippines. In 2013, Unilever Foundation has established a relief
programs worth almost 1million in order to provide life-saviing relief for the victims
of typhoon Haiyan in Philippines. It includes provide basic supplies (food,shelter, and
clean water) and support rehabilitation.
So far Unilevers manufacturing performance show the good progress. They
success reduce CO2 emissions from energy by 39% per tonne of production, 37%
per tonne water abstraction has been reduced, and total waste that has sent to
disposal reduce 97 % (all this performance compared to 2008). Moreover, in
February 2016, Unilever has succeed achieve zero non-hazardous waste to landfill

in their 600 Unilever sites (include 400 non-manufacturing sites) around the world.
(Unilever,2016). Furthermore, in 2015, international NGO CDP through The A List:
The CDP Climate Performance Leadership Index Report 2015, awarded Unilever an
A for climate performance (Unilever,2016)

3.2 Social Welfare Approach

Freman (1984) stated that large company has responsibility to its
stakeholders welfare. Company has capability to support the communities in the
locations they are operates and add value . Unilever through its USPL has conduct
numerous programs in order to make sure social/customer welfare.
In 2012, Unilever worked together with Unicef through 2 of Unilevers brands :
Domestos and Persil (Unilever,2016) .The first program is improving sanitation with
Domestos through behaviour change interventions and capacity building initiatives.
Now, almost 2 million people live in open defecation free communities and get
positive implication from improved safety, dignity , and health.
Unicef also collaborated with Persil to help children get quality education in
2015. More than 10 million children benefitting through this programs especially in
Brazil, Vietnam, and India (Unisef,2016). Moreover, Unilever also contributes in
Unicefs emergency responses through global employee fundraising and matched
funding (Unicef,2016). In the same year, Unilever help to stop the spread of Ebola
virus in Liberia through contributes soap and detergent.
3.3 . Employee Recruitment and Retention Approach
According to Greening and Turban(2000),

CSR can give positive

implication for the employees such as increase organizational commitment

and boost their performance. Unilever recognized the importance of having
employee who not only have skills and creativity. But also motivated and
committed (Unilever,2016). Moreover, as part of USPL, Unilever have targets
to create a better workplace through reduce workplace injuries, accidents and
improve employees health and nutrition.

Unilever realized that developing and retaining the right quantity, quality
and diversity of people is important to grow their strategy. Hence, Unilever
announced Winning with people strategy which is one of the part of
Compass Strategy in 2009 in order to create a simpler, develop necessary
talents and skills, and embed a performance culture that rewards success.
In 2015, Unilever launched the Learning Hub for all Unilevers learning
content. The purpose is to make sure that all skills aligned with its business
strategy. Moreover, Unilever also implement respecting of human rights in the
UN Guiding Principles on Business and Human Rights which not only focus
on human rights issues, but also include Unilevers work to empower woman,
fight against sexual harassment, etc. So far, 860 employees has trained as
ambassadors for human rights and more than 19,000 people trained on
ending sexual harassment.
In terms of empowering women, Unilever with UN Women, announced
that they will expand economic opportunity for women in their value chain and
help reduce unpaid care work at once increase safety for women and girls. In
Unilevers Konya ice cream factory in Turkey has 46 % of woman engineers.
This proves that Unilever has established the equality of gender in its
workforce (Unilever,2016).
Unilevers commitment to sustainability has proven become important
reason why people attract to work in Unilever. Unilever become No.1
Graduate Employer of Choice

in the FMCG sector among their target

universities across 34 countries in 2015 (Unilever,2016)

4.1 Recommendation
4.2 Ecological Approach
From the data that conduct by Unilever, it showed that Unilever has good
progress in reduce the impact on environment through their program in USLP.

However, its turned out that there are insignificant different when compared with
what happen in the reality, especially in the case of whether palm oil that buy from
Indonesia is linked to reinforest destruction or not .Unilever not sure if no
Indonesian rainforest was destroyed in the making of their products
(Lamb,2016).
To tackle this problems, Unilever should make sure that all its suppliers
comply with their own environmental standards. Moreover, Unilever should apply the
transparency along supply chains. It is important to make sure and get clear
information about all their suppliers and the practices they are enganged in.

4.3 Social Welfare Approach

According to Valente and Crane (2010) , to improve social welfare the company can
adopt one or mix this strategy ; Supplement, Support, Substitutes, and Stimulate. It
is recommended for Unilever to develop their supplement strategy and added
stimulate strategy since it will help Unilever to be able to stimulate policy changes
wherever it is operating for. By having good substitutes strategy, Unilever can
develop strategic partnership in the future. It also allows Unilever to create public
service and still capable to commercialize it (Crane et al,2014).
However, Unilever CSR in social welfare approach already good and dont need
changes in its strategy. It can be concluded through its Social programs, and
achievement such as Lifebuoys handwashing programme has reached 337 million
people since 2010, Achieved an A for CDP Climate performance and full marks
100 for our Disclosure score, collaborate with Unicef to help children get education
and improve sanitation, etc (Unilever,2016)

4.4 Employee Recruitment and Retention Approach

Between 2011-2012, Oxfam found that in Unilevers Vietnam has poor
labour practice such us insufficient wages, managers and suppliers unclear
about Unilever's codes of conduct, and factory employed worked by a third

party but on much poorer terms and condition (Smedley ,2016). Even though
Unilever paid the wages excess of the national minimum wage (approximately
45 per month in 2011) and international poverty line of $2 (1.20) per day,
the wages insufficient to meet the daily needs. (Guardian,2016)
Thus, Unilever as a global leader in CSR, should make sure in robust
international standards. In terms of the wages, Unilever should not look
beyond just national minimum wages and more concern to pay a living
wage .Moreover Unilever can organize human labour rights training
workshops for all their internal business stakeholders to make sure that they
really understand its global CSR standards.

5. Conclusion
By analyzing Unilevers CSR strategy and approach, it can be concluded that
Unilever has success manage incorporate CSR into its business strategy. Using
USPL as its strategy make the business become sustainable business and help
Unilever apply CSR in their core business. The company has succeed achieve their
aims, vision, and objectives by following the ethically sources strategies and still pay
attention to all its stakeholders. Regarding its overall strategy, Unilever already have
good current strategy but it should improve its current strategy.

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