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Unilever long-term strategy

Challenge

Adopt a long-term strategy and move away from short-term gains for shareholders.

Problem

Businesses can struggle to set long term goals as they find themselves responding to the shorter term demands of shareholders and the need to turn profit. Over time this short-sightedness can lead to collapse of business as markets and competition change.

Solution

Unilever set a highly ambitious long-term plan in 2009. The vision was to double in size, while reducing the company’s environmental impact. Sustainability aims were placed at the heart of the business plan which was aligned with societal challenges on the basis this was the best path to long-term resilience and relevance.

The company took the decision to woo longer term investors and discourage those in for short-term returns such as hedge funds. Unilever stopped issuing quarterly financial reports to this end.

Unilever has looked to be more collaborative in seeking to achieve targets such as to help one billion people improve their health and wellbeing; to improve the livelihoods of hundreds of thousands of people in the company’s supply chain; and to halve the environmental footprint of the group’s products. Working with stakeholders, NGOs, governments and other businesses is key to the aims of their sustainable living plan.

Benefits

Reduced the shares held by hedge funds from 15% to less than 5% over three years, reducing fluctuations in the company’s share price
Eco-efficiency programmes in factories and efforts to reduce packaging have cut costs
The brands that are building sustainability into their offer all perform well. For example, Lifebuoy, the concentrated liquid detergents and Comfort all grew by double digits in 2011

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