Will Business Take the Lead in Addressing Global Challenges?
Posted 10.31.06Successful businesses of the future will not only satisfy functional needs but also will make a positive social, economic and environmental impact, asserted Unilever Group Chief Executive Patrick Cescau in a keynote speech at the Business as Agent of World Benefit Global Forum.
Successful businesses of the future will not only satisfy functional needs but also will make a positive social, economic and environmental impact, asserted Unilever Group Chief Executive Patrick Cescau in a keynote speech at the Business as Agent of World Benefit Global Forum.
“Companies that integrate societal needs, corporate responsibility and business strategy will be the most successful in the future,” he suggested. “Those that don’t will fail.”
At Unilever, social and environmental concerns are an integral part of the company’s business strategy, particularly in emerging and developing markets.
For example, Unilver’s Project Shakti promotes financial stability and self-esteem for rural Indian women, who become entrepreneurs and independent dealers of the company’s soap products. And the company’s public health campaign is designed to raise awareness of the importance of hand washing with soap. Approximately one million people die from diarrhea each year in India, where 17 million people never use soap. Hand washing can reduce these deaths by 50 percent.
As a result of these initiatives, sales of the company’s Lifebuoy soap are growing by 20 percent annually.
“At Unilver, it is our fundamental belief that the health and prosperity of our business is directly connected to the health and prosperity of the communities we serve,” Cescau said. “We are coming to the realization that building a thriving business and having positive social impact are not separate activities; they are one and the same.”
Companies that think this way can have a significant social and environmental impact, but they can’t do it alone, Cesau acknowledged.
“We want to play our part and we do it more effectively when we work with others. Cross-sector collaboration and public-private partnerships are the key to business social responsibility.”
As an example, he cited a partnership between Unilver and UNICEF, in which the company has worked to supply the poor in Africa with affordable iodized salt.
Iodine deficiency is the world’s leading cause of brain damage and can reduce the development of intellectual capacity by 15 percent. It remains a major public health problem in 130 developing countries and affects more than 740 million people ¾ 13 percent of the world’s population and about 30 percent of children under age five in Africa, according to figures from UNICEF, the World Health Organization and the United Nations.
In just four years, Unilever’s business activities and educational programs have contributed to a 50 percent increase in the number of households in Ghana using iodized salt.
“And the product has been profitable,” Cescau was quick to point out.
If business is to take a leadership role in addressing global social and environmental concerns, companies like Unilever must employ more people whose values are aligned with this agenda, Cescau noted.
“It’s not only important to change the mindset of companies, but also to change the skill sets of those we employ,” he said. “We need people with an innate and profound understanding of business’ social and environmental impacts and potentials. At Unilver, we’re already testing for this understanding in our graduate recruiting processes.
“The rules of the game are changing. Doing business in the 21st century requires an integration of business strategy with social and environmental benefit. We need leaders with much broader perspectives if we are to make a difference in the world.”
Weatherhead School of Management at Case Western Reserve University cultivates creativity, innovation, and purpose-driven leadership to design a better world.