Under Polman's leadership, the company made a series of corporate commitments to environmental and social causes. It supported sustainable agriculture at the World Economic Forum. It helped create the United Nations' "sustainable development goals." It "made a stand to #unstereotype the way men and women are portrayed in marketing." Again and again, it filtered its corporate purpose through a progressive worldview.
While it is now common for brands to advertise their commitments to such causes, Unilever took the lead in incorporating "purpose" into virtually everything it did. Polman often called for CEOs to focus on creating value for a wider group of "stakeholders," as opposed to narrowly focusing on shareholders; he also campaigned for government efforts to fight climate change.
At first, Polman's play worked. In his decade atop the company, Unilever's stock price rose by about 150 percent—"well ahead of the FTSE [Financial Times Stock Exchange] 100 average," The Guardian notes—and it reported decreasing emissions from its factories by 47 percent from 2008 to 2018. Perhaps it indeed was possible to achieve both purpose and profits, to serve both "stakeholders" and shareholders at once.
Toward the end of his term, though, signs of trouble appeared. Kraft Heinz, a firm closely associated with Warren Buffett and his holding company Berkshire Hathaway, made a bid for control of Unilever in 2017. The company rejected the offer. This event carried symbolic meaning, as Buffett has a long history of favoring profits over "purpose." In the fallout, investors increasingly put pressure on Unilever to cut bureaucratic overhead.
After Polman left the company in 2019, his replacement Alan Jope eagerly picked up the ESG mantle. A 2021 Unilever blog post declared that there was "No trade-off between purpose and performance." In 2022, after a backlash against ESG had begun, Jope declared at a Clinton Global Initiative event that Unilever "will not back down on this agenda despite these populist accusations."
Indeed, the populists did not prompt Unilever to back down from ESG. After all, Unilever is a British company, and in Britain, even conservative politicians have embraced aspects of the ESG agenda. Market forces, on the other hand, have had an impact. Investor Terry Smith repeatedly ridiculed Unilever's "virtue-signaling," calling on the company to focus on fundamentals. Why did Hellmann's mayonnaise need a purpose? Didn't it already have one, as a salad and sandwich condiment? Nor was Smith the only investor concerned with Unilever's flagging performance.
Within months of his promise not to back down, Jope announced that he was stepping down as CEO. His replacement, Schumacher, is the one who called the focus on ESG goals a "distraction."
~ Russ Greene, "Is ESG Already Over? CEOs are beginning to wonder what to do when environmental, social, and governance factors are at odds with performance.," Reason.com, February 2024
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