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BUSINESS ETHICS

Select and answer ONE of the following questions:


3. Choosing any one company that is signed up to the UN Global
Compact and that has substantial operations in a developing world
state, critically evaluate the social responsibilities it has in that
context.
The Rana Plaza disaster in a Bangladesh clothing manufacturer resulted in 127
workmen losing their life due to unsafe working conditions. This caused retailers
such as H&M, Zara and Tesco to improve supply chains as a social responsibility
(Bowman, 2014), which has caused wages to be increased and conditions to be
improved, playing a role in developing communities. However this is a reactive
approach, what would have been the outcome if these healthy work conditions
were regulated from the beginning by the companies that purchases from the
plant? Probably the 127 workmens lives would have been saved. This tragedy
highlights the need for Corporate Action.
Issues such as these are being tackled through the introduction of the UNs
Global Compact, which asks companies to sign on to and live up to 10 principles
based on fundamental UN conventions in the areas of human rights, labour rights
and environment. These and related schemes most of which are voluntary, link
corporate social performance or corporate responsibility and the way
companies treat various stakeholder groups such as employees, customers,
suppliers as well as society. In addition, such programs there to increase
demands from shareholder, labour rights, human rights and environmental
activists for greater corporate transparency and accountability. Unilever has
always been committed to doing business with care for the environment, respect
for human rights and with the highest standards of business integrity (Unilever,
2014). This is why they became an initial signatory in 2011 helping to pioneer
the strategy and has taken the concept of corporate social responsibility to
another level which should be showcased to all companies.
Unilever has been around for 100-plus years. We want to be around for several
hundred more (Skapinker, 2010) as quoted by Paul Polman, Unilever CEO.
Skapinker commented that this was an ideology that he has never heard from a
corporate leader before. This is typically because companies have been seen to
be thinking only 10 years ahead, and this is not what sustainability and CSR is
about, as Bruner (2003) highlights that 10 year plans are not good enough.
The thinking behind Paul Polmans statement is that Unilever has been around
for 100 years and wants to create a world and an environment where they can
exist for more centurys to follow and that our planet has stability to be able to
provide this future. This is very much in line with The Bruntland Report of
Sustaianable development provides the definition to be development that
meets the needs of the present without compromising the ability of future
generations to meet their own needs. This means that Unilever needs to be an
active agent within the environment as well as social and economic issues to
ensure their and the worlds continued existence. This ideology means that
Unilever see business sustainability and CSR as a merged definition. Therefore
their CSR strategy is based around this ideology which I will be analysing in-

depth to understand its effectiveness, their theory behind the strategy as well as
their motivations.
Unilevers CSR strategy is called the Unilever Sustainable Living Plan, and its sole
purpose is to make sustainable living commonplace(Unilever,2012). This
means to embed sustainability throughout their organisation from suppliers
through to consumers where everyone lives within the means of the planet. Their
vision and target is to double the size of the business, whilst halving our
environmental footprint and increasing our positive social impact (Unilever,
2012) all by 2020. This goal has been seen within the sector as impossible,
causing their competitor Nestle to be horrified at the declaration of their targets
where in some areas Unilever had no idea how they planned to achieve them
(Makower, 2014). A Unilever sustainability consultant John Elkington also
commented that the aspirations are insanely ambitious (Makower, 2014)
however Unilever responded by highlighting that they did not want to set lower
targets as that would not allow them to be pushed to their limits in terms of
sustainability though out the business. Being a large multinational Unilever gain
53% of their business from emerging markets such as India, where they have
large operations. Therefore heightening their social responsibilities to act in an
ethical manner. This essay will therefore analyse Unilevers work towards the UN
Global Compact and how they manage their social responsibility.
A main issue that the UN Global compact is tackling is the working conditions
that company promote, both from their own employees as well as the working
conditions from organisations that work with them through their value chain. The
example above of The Rana Plaza disaster highlights the need for the initiative,
as many corporations such as Primark were purchasing from this production
facility, however have no initiatives in place to ensure both adequate human
rights and labour conditions were up held. Following the UN Global Compact
Human Rights Principles both one and two; to support and protect internationally
proclaimed human rights, as well as to make sure that they are not involved or
advocating human right abuse.
Since joining the Global Compact Unilever has integrated Human Rights and
Labour iniatives into the business model with benchmark for suppliers being
created such as meeting the Mandatory Requirements of the Responsible
Sourcing
Policy;
and
[expecting] suppliers to achieve over a reasonable period of time in order to
reach Good Practice and ultimately to achieve Best Practice (Unilever, 2014).
Unilevers good practise in these areas has been identified by John Ruggie for his
report Guidance tools for companies for the UN framework for Business and
Human Rights with particular excellence in their Vietnam operations which is
often used as a bench mark for both labour and human rights.
As part of Unilevers target they aim to half the size of their environmental impact
even whilst their business doubles across all operations. Their approach is in line
with the UN Global Compact principles surrounding the environment where
Unilever has pioneers in Principle 9 encourage the development and diffusion
of environmentally friendly technologies. For example strategy on the
environment and CO2 levels has meant that they devised new techniques such

as their new packaging for their deodorant brands Sure, Dove, Lynx and Vaseline
where they have launched a campaign called compressed upon which they
have halved the size of their canisters meaning that they can save roughly 600
tonnes of CO2 per person across the world.
However in 2008 they came into conflict with Principle 7 Businesses should
support a precautionary approach to environmental challenges; as in 2008
Unilever had to act quickly regarding the Chinese milk powder crisis due to
traces of melamine found. This directly affected a lot of Unilevers products such
as their Lipton milk tea powder meaning they had to recall a large amount of
stock in precaution to any contamination and to create reassurance for the
consumers (Lynch, 2009). In response to this Unilever begun thorough testing of
all of their suppliers products to ensure that they are in line with UN guidelines.
This highlights how large corporations such as Unilever have a large ethical duty
beyond selling their product or service, especially for a product that is to be
consumed and without guidelines in place such as the UN Global Compact
companies can risk human life as well as human quality of life due to the power
they hold.

Before Unilever signed up to the Global Compact agreement they were exposed
in 2008 by a surrounding their palm oil usage. Unilever are the worlds biggest
consumer of palm oil where Greenpeace produced a report titled How Unilevers
suppliers are burning up Borneo (House of Commons, 2008). This triggered
Unilever to act straight away where they have since taken a bold stance against
this issue and have partnered with Greenpeace to build a sustainable coalition of
palm oil users, growers, traders and processors. As part of their 2020 sustainable
living plan Unilever has also committed to sourcing 100% of it palm oil from
sustainable sources which is a very large shift for the multinational. This has
added to their sustainability and positive impact that they have in developing
areas which is where their palm oil has been sourced.
Reacting to environmental issues further Unilever highlighted that the consumer
accounts for 68% of their total greenhouse gas footprint and has launched
campaigns across the world such as I prefer 30 (Unilever Report 2013). This
works with individuals across the world and from developing countries to
promote greater environmental responsibility. Unilever has clearly highlighted
the need to encourage others to promote environmental sustainability and have
taken the approach to use their products to reach mass markets. Unilever has
translated this campaign to all areas including underdeveloped areas to instil
environmental sustainability within growing economies. This aligns with principle
8 to undertake initiatives to promote greater environmental responsibility

Anti-Corruption

Principle 10: Businesses should work against corruption in all its forms,
including extortion and bribery.

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