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CNG 2016 — Unilever
Childhood malnutrition matters in many of Unilever's growth markets. But what price for a CSR strategy is acceptable to shareholders? Namas Bhojani
Commentary

Doing Well by Doing Good Can Be Hard – Ask Unilever

Feb 17, 2017

In the last decade, Paul Polman, CEO of Unilever, has become the poster boy for responsible capitalism. The soft-spoken Dutchman is the most adamant of any big company CEO I know in insisting he runs his company for the good of society, not just shareholders. The company got its start 130 years ago, peddling soap as an answer to the rampant epidemics and deadly infections of Victorian England. Today, he is fighting global warming and ending childhood malnutrition. The company’s “Sustainable Living Plan” includes a dizzying array of 50 goals, ranging from stopping nonhazardous waste going to landfills to halving water waste in its factories.

The question is: Can he run his business and save the world at the same time? When Fortune’s Vivienne Walt asked him a version of that question, he responded: “To me it is the same. I don’t separate that. I think it is an integral part of the way we run our business.”

Polman’s approach may be an extreme among big companies, but I find more and more CEOs are moving in his direction. The hundred who joined Fortune at the Vatican last year were certainly struggling with how to increase their contributions to solving social problems. So, too, were the 30 who came to our similarly-themed dinner in Davos. And Fortune’s annual Change the World list highlights companies that have taken this approach, and made measurable progress in the process. Their efforts may reflect a complex mix of motivations—an inherent desire to do good, a need to inspire millennial employees, an effort to win socially-conscious consumers, or fear of an existential threat heading their way from an angry populace. But whatever the reason, the desire of corporate leaders to demonstrate their ability to do good in the world seems clearly on the rise.

What’s not clear, however, is whether shareholders have caught up. Unilever’s were willing to tolerate Polman’s missionary zeal when the company was doing well. But in the last two years, the company’s stock has slipped while the S&P has soared, and they are now talking about his successor. “A minority of investors I speak to give two hoots about Unilever’s Sustainable Living Plan,” says Jefferies analyst Martin Deboo.

Walt’s fascinating Polman profile is featured in our March issue, but you can read it online now, here.

Meanwhile, count Accenture among the companies vowing to increase U.S. jobs in the age of Trump. U.S. CEO Julie Sweet visited the Fortune offices yesterday and told me the company is creating 10 new “innovation hubs” in cities around the U.S., adding 15,000 jobs in the process. It’s also investing $1.4 billion in training to ensure its people have “leading-edge capabilities.” Accenture has been a leader in business outsourcing, but says the new hubs will enable it to work with clients to create business models that take advantage of the latest technologies, and also keep workers closer to home. You can read more here, and see a video of Sweet here.

Enjoy the weekend.

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