SUSTAINABLE DEVELOPMENT
Sustainable development is one the key issues of the 21st century. This is a concept for the world’s development which is based not only on the short-term economic interests, but the interests of the future generations. In other words, present consumption and its environmental impact should not be to the detriment of those who are to come next. Under the USLP, the company’s development shall have the following three aspects: economic, social and environmental. The issue of thrifty use of the planet’s available resources is getting increasingly topical in view of the known world tendencies. The first problem is the rapid growth of the world population which hit 7 billion in 2011. Problem No. 2 is access to fresh water: 2.8 billion people are not getting enough of fresh water today. Thirdly, excessive consumption in the developed world is causing obesity and other health problems, while quite a few people in the developing countries are hungry. Fourth, the non-renewable resources are not being used thriftily enough. Companies working on the global market cannot ignore the challenges of today in their business strategies. Websites of 80% of the companies from Fortune 500 contain information about their socially responsible policies and practices. Ethical considerations do not represent the main reason why the concept of sustainable development is so popular today. The companies have understood that a responsible way of doing business is not only good as an image-making tool,
9 / Unilever Case: Tula 0
but is also good for boosting their competitiveness, especially in the long-term. The Atlanta-based company Interface® — the worldwide leader in design, production and sales of environmentally-responsible floor coverings — set a good example by adopting the concept of sustainable development in the mid 1990s. The company’s CEO, Ray Anderson, put in a great deal of effort to persuade his colleagues into making the decision, but his efforts bore fruit. By 2005, Interface was saving around $400 million annually thanks to the reduction in waste generation. Furthermore, by that time the company emitted by 92% less greenhouse gases and consumed by 92% less water and its profit had doubled. Anderson understood how the ‘green’ strategy could influence the company’s financial performance. Many retail and FMCG companies now follow the example set by Interface adopting the strategy of sustainable development. Wal-Mart, IKEA, Tesco, Nestle, Procter & Gamble, Coca-Cola, PepsiCo, Kraft, Johnson & Johnson and Unilever are just to name a few.
ENVIRONMENTAL PERFORMANCE
SUSTAINABLE DEVELOPMENT ECONOMIC DEVELOPMENT
SOCIAL INCLUSION
Open innovation is a term promoted by Prof. Henry Chesbrough, is a paradigm that assumes that firms can and should use external ideas as well as internal ideas. 2 The Future Leaders Program is a 2- or 3-year course of training talented young college graduates to make them prepared for taking managerial positions in the company. 3 The concept of sustainable development gained momentum in the 1970s. In 1987, the World Commission on Environment and Development (WCED) presented the Brundtland Report called Our Common Future where sustainable development was defined as “the kind of development that meets the needs of the present without compromising the ability of future generations to meet their own needs.” This definition of sustainable development is currently recognized and used in many countries. 1