Cleaning House: Unilever warns it will sell brands which are harmful to society

August 9, 2019

2 min read

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What's going on here?

Unilever threatens to sell brands without positive social impact.

What does this mean?

One of the largest companies in the UK, (the conglomerate behind household brand names like Vaseline, Ben & Jerry’s, and Hellmann’s) is threatening to let go of some of its brands. In an effort to increase the company’s positive impact, CEO Alan Jope announced that the company wants its brands to have “purpose”.  Brands will be expected to both cut their negative environmental effects, such as Cif limiting its single-use plastic, as well as having an active positive impact on the planet.

Unilever’s marketers are being tasked with coming up with business plans for every brand to have a long-term sustainable impact. No timetable for this process has been specified. Unilever and Jope have as yet been vague on what it means for a brand to have “purpose”. However, Jope expressed his conviction that to stick to your values has to come at a cost.

What's the big picture effect?

This proposed action highlights how big companies are increasingly evaluating their impact on society and seeking to improve their effect. Further it means that law firms will have a lot of work as a result. Clearly a mass sell-off of some of the best-known brands in Britain (such as Marmite and Magnum) will create a lot of business for the law firms tasked with handling the sales. This will be for both Unilever’s representatives from Linklaters as well as the firms instructed by the hundreds of potential buyers for dozens of brands. Along with this may come employment disputes that arise over the restructuring of Unilever and possible cuts to the brands that are deemed not to have a “purpose”.

Companies across the UK, including (and perhaps especially) law firms should take note that a giant player in British business is willing to put its profit margins on the line in order to improve its social and environmental impact. Observers will be watching carefully to see what the exact risks are to Unilever’s bottom line as these reforms take place, and how markets and consumers respond. 

For now, one thing is certain, Unilever’s spring clean will undoubtedly have a positive effect on society and it is refreshing to see such a big company put others’ interests first.

Report written by Jonny Isaacs

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