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One year after the launch of the Plan in Vietnam, Unilever Vietnam chairman JV Raman talks to VIR’s Tuong Thuy on the Plan’s One Year On in Vietnam.
At a recent Unilever Sustainable Living Plan – One Year On event in Hanoi, you mentioned emphatically that the Unilever Sustainable Living Plan is at the core of the company’s business model. Could you please share with our readers why the Plan is such a business imperative?
We are living in a fast-changing world, and I would like to share with you the challenges that we are facing in the world today, are challenges that will have a major impact on our lives, our children’s lives, the lives of our consumers and our business.
By 2020 there’ll be another billion people on the planet. While this opens up opportunities for our brands to meet changing consumer needs, it also means the world is running out of the resources to meet those needs, and we will be faced with even more acute challenges on health, hygiene and nutrition, on drinking water and sustainable resources, on climate change and better livelihoods. Those challenges require businesses to operate differently to respond to them in the context of diminishing natural resources, and require businesses and governments to work more closely together.
At Unilever, we have recognised that growth at any cost is not viable. We must find a new way of doing business that decouples growth from environmental impacts, while increasing the positive social impact of our brands.
In the context of diminishing resources, businesses have a very important role to play. If we are not sustainable, we cannot succeed in the future. It’s very clear because we cannot borrow the resources of future generations to spend it today. That was the genesis when we launched Unilever Sustainable Living Plan here more than a year ago. In other words, growing sustainably is not a choice anymore, but a business imperative.
It is also stated that the Plan is more than CSR. It’s the way Unilever will compete across your business, across all brands, and all countries. Can you deliberate more on that statement?
Unilever’s Vision is to double our business while reducing our environmental footprint and increasing our positive social impact. Two elements are key here: growing through our brands, and growing through sustainable living. And they’re linked. Brands are critical accelerators of our growth. As we build brands with real purpose, we win preference and grow our business.
As mentioned earlier, we are having lots of opportunities for our brands to meet changing consumer needs, but at the same time the world is running out of the resources to meet those needs. That’s why sustainability makes good business sense, and for Unilever it’s at the heart of how we’ll grow our brands, by helping people live well within the limits of our planet. If we develop our brands today to help people adapt for the changing environment of tomorrow it will help us grow faster. I am very pleased to share with you that we are already seeing how putting a sustainability lens on our business is helping accelerate growth and improve efficiency.
In your opinion, what are the key success factors for the Plan as a business model?
The first key success factor is “end to end” thinking. What we realised is that, it is not just “our” environmental footprint which is important, but the foot print right from the “sourcing” to the “consumption” stage. This has helped us look at the entire value chain and understand what needs to be done at the different stages, whether from sourcing, manufacturing, customers and consumers.
The other big success aspect is partnership. We cannot achieve this huge agenda working alone. We must work in partnership with the government, business partners, customers, NGOs, consumers and our employees, to deliver our plan commitment. And what we have done in Vietnam in this regard clearly underlies this view.
What are the Unilever Sustainable Living Plan commitments in Vietnam?
Globally, Unilever has committed that by 2020 we will help more than one billion people improve their health and well-being; halve the environmental footprint of our products, source 100 per cent of our agricultural raw materials sustainably and increase the positive social impact.
In Vietnam, consistent to our global commitment, we aim (1) to make more than 20 million Vietnamese lives better by improving their health and well-being, (2) to halve the environmental impact of our products through saving water, reducing wastes and green manufacturing practices, and (3) to enhance the livelihoods of millions of Vietnamese through sustainable tea sourcing and supporting disadvantaged women via micro financing and job creation.
After one year, what achievements has Unilever Vietnam achieved in terms of delivering on these commitments?
I am very pleased to report that we are making great progress in Vietnam with our Plan, based on the strong foundation of our consistent solid business performance and social & community investments. Let me share with you some highlights of our success in this regard.
On improving health and hygiene, we have directly impacted more than 4,5 million people and indirectly 13 million people in our health and hygiene programs, which include Lifebuoy Hand Washing Day and community education initiatives teaching people how to wash their hands to reduce the impact of diarrhea, a common occurrence in many parts of the world; P/S Protect Vietnamese Smile program for oral care education; Vim Toilet Academy to build clean toilets for school children, in partnership with the Ministry of Health, Ministry of Education and Training as well as with UNICEF and PSI.
On reducing environmental footprints, the success case would be saving water. More than 450 million cubic meters of water have been saved with the use of Comfort One Rinse, our leading Brand in Fabric Conditioner. We found in Vietnam, consumers use three buckets of water to rinse. With the One Rinse innovation, people use one instead of three buckets of water to rinse.
From 2007 to 2012, we have saved close to 450 million cubic meters of water, equal to approx 8 million school swimming pools. Similarly, our diesel oil-free factory in Cu Chi Industrial Zone, and other environmental friendly systems have helped reduce some 1,500 tons of carbon dioxide to the environment.
On sustainable sourcing, our sustainable tea sourcing PPP with the Ministry of Agriculture and Rural Development (MARD) has helped to triple the tea sourcing from Vietnam within just one year. Vietnam is a big manufacturer of tea but Vietnamese tea is not as popular as Vietnamese coffee. Unilever is working with MARD in an effort to make it the case.
Last but not least, over 10,000 micro loans with total value of over VND50 billion have been lent to disadvantaged women households, from our revolving fund of VND20 billion with the Vietnam Women Union, helping to enhance livelihoods of Vietnamese people in rural areas.
Have you learnt any lessons during the first year of the plan in Vietnam?
Businesses have to take leadership in helping with sustainability efforts. So, providing leadership is very important. This is a big agenda, where all stakeholders, namely the government, NGOs, our customers, our consumers and our employees, need to participate in, so that it can reach a “Fly Wheel” effect. Also, we should not underestimate how a number of small actions can make a big difference. Finally, we need to be patient and persevere.
This year is a tough year, and the next year will continue to be very tough for the business sector because of the prolonged global economic crisis. How has Unilever dealt with the situation?
We need to stay focused. We have been strongly committed to Vietnam right from the first day we arrived. Because when we work in any country, we are always committed to the long term. That’s why when I came here, people used to joke by calling us not Unilever, but Vinalever. This year was truly a very difficult year for the economy, but the fundamentals of Vietnam’s economy are quite strong, the fundamentals of consumption are quite strong. And the people and consumers here are extremely smart, they adapt easily.
Looking at the history of Vietnam, you’ll see that they have gone through many difficult situations, but they adapt. And our belief is they will adapt. They adapt to new ways of doing things. I call it the “new normal”. The new normal is they will learn to navigate from a 7 per cent GDP growth to current lower levels before bouncing back. I think the current situation is difficult, but we should look at the long term and not be distracted by one year. That’s a very important thing.