Foreword by Alan Jope

Alan Jope Chief Executive Officer Unilever

Businesses today face enormous exogenous challenges. Challenges that impact every sector of the economy and every country. The climate emergency, the loss of nature, a collapse in biodiversity, rampant inequality, and a global pandemic to name a few. Left unchecked, they will have wide- ranging and hugely damaging social and economic consequences. There is no longer such a thing as "business as usual." This has been all too clear recently. And too quickly forgotten.

Yet these forces are shaping the future. Sustainability is mainstream. Consumers prefer sustainable products. Regulators are shifting the rules of the game so that sustainability considerations are starting to underpin much of the operating environment. Investors are building conviction that sustainability supports long-term performance. And most importantly, great people are picking employers and investments that align with their values. It’s becoming increasingly clear that businesses that don’t respond to these shifts will be regulated out of existence—if the collapse of consumer demand doesn’t bankrupt them first.

This drives our thinking at Unilever. Our approach is as simple as it is ambitious. Sustainable business isn’t a strategic priority. It is our strategy. It is our priority, captured in what we call the Unilever Compass, a clearly articulated intent to show that sustainable business drives superior performance. The Compass defines everything we do. The priorities we set. The investments we make. The people we look for. The businesses we acquire. In other words, it is a truly integrated and embedded approach—a red thread that runs throughout the whole company.

• We find it useful to think of our framework for delivery in expanding layers, spurring action through our different spheres of influence.
• It starts with our operations and workforce, putting our own house in order, including importantly, engaging employees, and connecting the company’s objectives to their personal sense of purpose.
• Next is the value chain, using our size and scale for influence with suppliers and customers to improve livelihoods on everything from sustainable sourcing to living wages.
• Our brands represent the next layer, using the power of consumer connections to change behaviors in a way that has a lasting and meaningful positive social and environmental impact.
• And finally, the wider societies in which we operate, using collaboration, partnerships, and advocacy to change systems in order to deliver on agendas key to us, or to one of our brands.

Encouragingly, our approach resonates with the case for sustainable leadership set out in this report. I congratulate Russell Reynolds Associates for leading this project, although I am left somewhat disappointed by the findings. They highlight that sustainability remains misunderstood by many. We know that the average time horizon for investors is 13 years—if we continue on our current path, the world will be a terrible place in 13 years. We must act today. Businesses must seize the dual opportunity to improve performance by putting sustainability at the heart of business strategies and to secure the future for our people and our planet.

I encourage you to digest this report, embrace the thinking, invest in great people and prepare your leadership teams— sustainable business will drive superior performance.

About the Study

The business case for sustainability is undeniable. Leaders who bridge the divides that threaten our global societies will yield significant triple-line dividends.

In a major global survey of C-suite executives, next-gen leaders, and employees, we reveal how leaders can grasp this opportunity:

• What are the environmental, social, and economic divides that leaders should solve?
• How ready are leaders to advance the sustainability agenda?
• What actions should leaders take to deliver lasting value for people, planet, and profit.

The study was conducted with 9,500 employees and next-generation leaders in 11 growth and mature markets from April 16 to May 12, 2021.