Unilever Come Under Fire

UK multinational consumer goods giant, Unilever are said to be really “obsessed with publicly displaying sustainability credentials”. 

Sure, they possess a laudable ambition. After all, you can expect to earn more money and boost your bottom line when you make your business more sustainable. Reduced business costs, more innovative strategies, an improved reputation, and more new customers who value sustainability all work to increase the amount of money sustainable businesses earn. 

But that is only one part of the business equation. 

Like all business entities, other factors will be scrutinized – whether it is profitability, earnings growth, market share, liquidity, value creation and the other performance indicators that business practitioners are familiar with. 

Unilever’s issue is their lacklustre performance which has become a tad too obvious – it appears they haven’t done well enough in squeezing growth out of their existing $120 billion collection of brands! 

On Tuesday, the maker of Dove soap and Magnum ice cream revealed their intention to cull 15% of their senior managerial positions to speed decision-making and boost performance. 

Alan Jope (right) is making his biggest job cuts since becoming chief executive officer three years ago, eliminating about 1,500 positions as Unilever also reduce junior-management staff by 5%. 

And a major revamp of the consumer goods company is also underway. 

Their beauty and personal-care arm, which have been growing at the slowest pace of Unilever’s three major divisions, are being broken up into two under the new organization. 

They plan to separate their Foods and Refreshments business into two separate entities that will bring more transparency to the performance of their ice-cream operations, which includes brands such as Ben & Jerry’s, Klondike and Magnum. 

Additionally, Jope is seeking to reorganize the foods business around healthier habits, aiming to build a portfolio of plant-based meat and dairy alternative brands that will generate 1 billion euros worth of revenue by 2025. He has already expanded into the fast-growing vitamins, minerals and supplements space with the acquisition of Olly Nutrition in 2019. 

Of course, Jope is betting all of the above will produce the desired results. 

In any case, he knows only too well that he is at a critical juncture, coming under increasing pressure to chart a new course as the company’s share price lags rivals. Equally important, there is an urgent need to ease shareholders' concerns after a failed takeover bid. 

Unilever, whose shares have fallen about 13% over the past year, last week effectively abandoned plans to buy GlaxoSmithKline's consumer health care business for $67 billion. 

Their proposal, rejected by GSK, was widely criticized by investors as being a costly and risky distraction from dealing with pressing challenges to the business, such as surging inflation in emerging markets and weakness in healthy foods. 

The prevailing sentiment is that the purpose of all this strategic rethink and organizational overhaul is very clear: damage limitation. 

Still, no matter the direction that Unilever take, one thing stays concretised: The Unilever Sustainable Living Plan. They will continue to advocate and promote the sustainability ethos of their brands. 

But what is it about a Unilever product that makes it so sustainable? Can a consumer goods giant which are active in 190 countries, have a portfolio of more than 400+ brands and annual sales worth $57.942 billion in 2020, really save the planet – and sell more products at the same time? 

It cannot be denied that Unilever’s sustainability strategy has been widely applauded. Admittedly, they do put more effort into saving the planet than many other companies – but don’t be so easily fooled by their rhetoric. 

They score well because they alone determine what constitutes ‘sustainability’! If you delve deeper into their practices, you’ll soon realize that the sustainability thingy is merely a business tool to boost their image, save money and create marketing opportunities. 

In fact, according to Ethical Consumer, their research highlights ethical issues concerning Unilever – and these include environmental reporting, habitats and resources, palm oil, pollution and toxics, human rights, workers' rights, supply chain management, irresponsible marketing, animal rights, animal testing, factory farming, anti-social finance, controversial technologies and political activities (Webpage https://www.ethicalconsumer.org/company-profile/unilever). 

On top of that, there are naysayers who are kicking up a fuss that Unilever focus too much on environmental and social strategies and not enough on their core businesses.

At the end of the day, unless Unilever’s performance indicators can show an upward trend, the game-changing USLP won’t mean much at all to their investors and/or other stakeholders.

The Vaccine Race

There are currently nine coronavirus vaccine candidates in Phase 3 trials. 

One has suffered a setback when AstraZeneca "voluntarily paused" late-stage trials of the highly-anticipated Covid-19 vaccine they are developing with UK’s University of Oxford. It appears that one of the study volunteers developed an unexplained illness, the company said on Wednesday. 

The drug is in trials involving thousands of people in the United States, Brazil, South Africa and the UK, where the patient who fell ill is. 

Julie Fischer (right), an associate research professor in the Department of Microbiology and Immunology at the Center for Global Health Science and Security at Georgetown University, told Al Jazeera such a pause was "part of the process" of drug development and clinical trials. 

"For a pause, the event would need to be serious; something related to the heart, lungs, kidneys or other part of the body's health system that required medical attention and was sufficiently serious to merit a pause to this very important vaccine trial in order to make sure it is safe, and that the adverse effect is not due to the vaccine itself". 

Florian Krammer (left), professor of microbiology at the Icahn School of Medicine at Mount Sinai said the fact a patient had fallen ill underscored the need for extensive trials. 

"It shows you that the evaluation process works, and why we need Phase 3 trials", he wrote on Twitter. 

Clinical trial holds are not uncommon, but AstraZeneca's is the first phase-three Covid-19 vaccine trial known to have been put on hold. And it is unclear how long the suspension may last. 

Developers globally have yet to produce large-scale trial data showing actual infections in participants – but Russia approved a Covid-19 vaccine last month, prompting some Western experts to criticize a lack of testing. 

The head of China's Sinovac Biotech said most of their employees and their families have already taken an experimental vaccine developed by the Chinese firm under the country's emergency-use programme. 

It is interesting to point out that Dr. Stephen Hahn (right), the head of the Food and Drug Administration, the US regulator, had said last month that the normal approval process could be bypassed for a Covid-19 vaccine if officials were convinced the benefits outweighed the risks. 

Unsurprisingly, the comments prompted a call for caution from the World Health Organization. 

Separately, nine US and European vaccine developers promised on Tuesday to uphold scientific standards in the global race to contain the pandemic. The companies, including Pfizer, GlaxoSmithKline and AstraZeneca, in a joint statement made a "historic pledge... to uphold the integrity of the scientific process as they work towards potential global regulatory filings and approvals of the first Covid-19 vaccines". 

The unusual move to promise to play by well-established rules underlines the highly politicized debate over what action is needed to rein in the spread of the disease. 

In the US, Dr. Anthony Fauci (left), the Director of NIAID (National Institute of Allergy and Infectious Diseases) himself told The Washington Post's Bob Costa during a Post Live event on July 24 that a vaccine could be approved by or possibly before November 2020. 

As Health and Human Services Secretary Alex Azar (left) informed CNBC on July 22: "We are literally making the commercial scale vaccine now, as we're going through the clinical trials. We're doing that at-risk, using the full power of the US government and our financial resources to do that. No one's ever done this before". 

And in a radio interview on August 06 with Fox News correspondent Geraldo Rivera, President Donald Trump (right) too suggested that a vaccine for the coronavirus could be ready before Election Day. 

Trump also told an assembly of reporters that he was "optimistic" that a vaccine would be ready around November 03 and noted that while "It wouldn't hurt" his chances for re-election, he was doing it "to save a lot of lives".

The vaccine race is on.