Dubai: Businesses can no longer grow by just selling products and services, they can only grow with people, economies and societies, business leaders say.
Businesses will have to grow by empowering people and supporting economies. Companies will have to engage in responsible business — by taking care of the people, societies, economies and environment.
“Businesses will have to become sustainable, equitable, if we have to overcome global challenges of poverty, hunger and unemployment,” Paul Polman, Global Chief Executive Officer of Unilever who was in Dubai this week, said. “Companies will have to create economies by helping tap hidden potentials and create opportunities.
“More than 200 million people are unemployed and 40 million people are entering the job market every year. We can’t leave everything to uncertainty and to the politicians.”
In a fast changing and gradually uncertain world, the global economic landscape has changed drastically with 25 per cent of the European population falling below the poverty line while their welfare states are no longer in a position to support them. While in most part of the world, the “have-nots” are moving towards the “haves” camp, however in most parts of Europe, the scenario is reverse, he said.
Triple bottom line
Business sustainability is often defined as managing the triple bottom line — a process by which companies manage their financial, social and environmental risks, obligations and opportunities, according to the Financial Times Lexicon. These three impacts are sometimes referred to as profits, people and planet.
Nobel laureate Professor Mohammad Yunus, who championed the micro-credit revolution, said, the multilateral aid agencies, the World Bank have not changed their strategies in empowering people and businesses and still rely on age-old system of supporting societies through aid. “You are trying to solve the problems of the 21st century with the prescriptions of the 1960s. Those are no longer relevant in today’s world,” he told a business gathering in Dhaka last month.
“I’m not against people making money. But what we need to do is to solve problems. Our softwares are programmed to help us make money. We need to shift gears to solve social and economic problems and private companies should become part of these solutions,” Yunus, who is currently promoting social business, said.”We need to adjust our software that has turned human beings into robots. We need to become human, again.
“Walking away from social problems won’t help businesses. Businessmen do not walk away from problems. They should face challenges, solve problems — otherwise they will become part of the problem,” Yunus warned.
Part of the solution
Companies can no longer be part of the global problems and will have to become part of the solutions to the global challenges. “Be it environment, climate change or empowering poor people in rural areas who do not have access to pure drinking water or proper sanitation, businesses will have to get involved with people and solve some of these problems,” Polman, a former senior executive of Proctor and Gamble and Nestle, said.
Unilever currently supports 1.7 million smallholder farms that supply raw materials for its products. The company will add another 500,000 sustainable farms in the next few years. By 2020, 100 per cent of all its agricultural inputs will come from sustainable sources.
“Why can’t we have a system where we give more than we take from the society, the consumers?” he asks. “Why can’t we have a zero waste factory that drastically reduces the carbon footprint?”
More than one billion people — or a seventh of the mankind — are without access to safe drinking water. About 80 per cent of diseases in the developing world are water-borne.
Citing some examples, he said, more than five million children die every year in Africa due to diseases caused by unhealthy and unhygienic living conditions.
“By teaching them cleanliness and the use of soaps, we could save half of them. Yes, that means, we sell more soaps — so be it. But by training them, teaching them and by getting involved with them, we could save so many valuable lives every year,” explained.
Improving hygiene habits
By 2020, the company will help more than a billion people to improve their hygiene habits and it will bring safe drinking water to 500 million people worldwide. This will help reduce the incidence of life-threatening diseases like diarrhoea
“Between 30-40 per cent of the global food is wasted every day that could feed millions of those who go to bed every night hungry,” Polman, who is promoting sustainability and responsible business worldwide, said.
Unilever, a global leader in fast-moving consumer goods (FMCG) producer and supplier, has been growing its business consistently over the last few years — despite the global economic slowdown. The company’s growth has been driven by developing and emerging markets, that represent 57 per cent of its €51 billion (Dh249 billion) business. Its underlying sales growth of 5 per cent during the first half of this year was backed up by up to 10.3 per cent growth in business in emerging markets.
Its products are present in 7 out of 10 homes globally and are used by over 2 billion people on a daily basis. Unilever has 173,000 employees around the world, generating annual sales of €51 billion in 2012. Of this, the Middle East which employs 4,500 people, represents only $1 billion of its annual turnover.
Middle East
The current unrest in Egypt has not dented Unilever’s sale. The company has remained vigil despite the on-going crisis.
“We are in this region for the long run. We remain consistently present in all of the 20 markets in the region serving 340 million consumers,” Paul Polman, Global CEO of Unilever, said. “Our people are on the ground and we are in touch with our team, our suppliers and we remain with them even during crisis.”
Unilever Middle East North Africa (Mena) currently has 9 manufacturing units with 85 per cent of it’s products locally sold across Mena produced in these units. It has one of the largest distribution networks across the Mena region, directly covering over 350,000 of the 1 million stores dotting the region.
Polman said, his company invests between $40-50 million in expansion in the Mena region.
“You have a strong commonality amongst the 340 million Arab consumers in the region — bound together by the same culture and language — that could easily bring a lot of energy if all work together for the betterment of the societies,” Polman said.
Intellectual property
He stressed expanding education and intellectual property across the region. “You can not simply rely on raw materials. Nothing beats intellectual property — for that you need to develop knowledge and patent new products and innovation,” he said.
Unilever Mena has proven to be a strong business doubling its turnover in the last 7 years despite the political volatility rocking the region.
Under its sustainability programme, the company plans to help more than 50 million people take actions to improve their health and hygiene in the region while at the same time, halve its environmental footprint across the life cycle of products as well as enhance the livelihoods of thousands of people across the region.
In the GCC, its aim is to improve and touch the lives of 15 million people by 2020. On the health and hygiene front, by end of 2012, the company has reached 500,000 children and educated 130,000 labourers across the Gulf on good hygiene habits. It’s aim is to reach 1 million labourers and 5 million children by 2015.
