[Re: Terry Smith has a point – and the rest of the City should listen too, yesterday]
Andy Silvester wrote how Terry Smith, one of Unilever’s top shareholders, “has a point” when saying the company has “lost the plot” with its focus on sustainability.
Mr Smith told Fundsmith investors this week that Unilever has become “obsessed with publicly displaying sustainability credentials at the expense of focusing on the fundamentals of the business”.
But what, I ask, is so crazy about one of the UK’s biggest companies fighting for sustainability?
Full disclosure: Unilever CEO Alan Jope has been a private client of mine in the past. He’s also appeared on my Leadership 2050 podcast.
But I’m not here to defend him or Unilever. I want to make the point that business, in today’s world, is also about meeting a greater purpose. The status quo of CEOs simply having to satisfy investors is no longer enough – satisfying employees and customers is as important.
Recent research by Kantar, using a 12-year data set, found brands recognised as having a high commitment to a purpose grow at twice the rate of others. True, Unilever has seen its share price drop in the past 12 months. But that’s after a decade of growth. Also, inflation has gone up 5 per cent in the past year, leaving businesses exposed.
A short-term fall in share price should not be a reason for Unilever to change a sustainability strategy that has worked in the long term.