Global consumer brands company Unilever [UL:US] plans to water down a series of its environmental and social pledges amid pressure from shareholders to cut costs, as reported by the Guardian on April 19. Specifically, Unilever would ditch its previous promise to halve its use of virgin plastics by 2025 from the 2019 level of 700,000 tons a year, replaced by a less ambitious target of cutting the consumption by one-third by 2026. The shift is expected to result in an annual increase of over 100,000 tons of new plastic usage. Additionally, the group will abandon a pledge to pay direct suppliers a living wage by 2030, instead proposing fair pay for suppliers accounting for half its annual spend on goods and services by 2026. Furthermore, it is dropping a commitment to have 5% of its workforce comprised of individuals with disabilities by 2025.

Unilever’s decision to soften its environmental, social, and governance (ESG) targets was made amid growing pressure from investors, who have urged the company to focus more on stock market performance than non-financial objectives. While Unilever has long positioned itself as a pioneer of ESG strategies such as plastic reduction and biodiversity enhancement, it is facing pressure from competitors who did not care about these initiatives and outpaced Unilever in sales growth and profitability. Nevertheless, Unilever CEO, Hein Schumacher, insisted that the company could still “make a difference” in four key areas, including climate, plastics, nature, and people’s livelihoods.

Sources:

https://www.theguardian.com/business/2024/apr/19/unilever-to-scale-back-environmental-and-social-pledges

https://www.bloomberg.com/news/features/2024-04-19/esg-unilever-scales-back-sustainability-goals

https://www.theguardian.com/business/2019/oct/07/unilever-pledges-to-halve-use-of-new-plastics