Environmental and social issues of Unilever
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Published: Thu, 20 Apr 2017
Unilever began with British soap-maker company named Lever Brothers. Their revolutionary action in business was by introducing the Sunlight Soap in 1890s. That idea was from William Hesketh Lever, founder of Lever Brothers. This idea helped the Lever Brothers become the first company that help popularise cleanliness in Victorian England. Moreover, the product rapidly emulated globally after that it was a success in UK and made Lever Brothers obtained more business worldwide. One of the reasons of this success was the strategy from William that not only prioritize on selling the products but also focus on manufacturing them. On the other side, in 1872 Jurgens and Van den Bergh created a company that produces margarine. Since there were many competitors in the margarine industry in Dutch, in 1920s, Jurgen and Van de Berth decided to strengthen their company by joining another margarine manufacturer in Bohemia. In 1927, there were three companies including Jurgen and Van de Berth company which formed Margarine Unie located in Holland.
In 1930, the Lever Bros merged with the Margarine Unie and even though, an international merge was an unusual move at that time, both of the two companies have the same vision that by doing this merge with strong global networks would create new opportunities. Finally, the name of “Unilever” was created by the merge of the companies. Not too long after Unilever was formed, they got a big problem which was that their raw material companies were reduced from 30% to 40% in the first year. As that problem started to attack, Unilever had to react quickly by building up an efficient system of control. In September of 1930, Unilever established the ‘Special Committee’ that was designed to stabilize British and Dutch operate and concern as an internal cabinet for the organization.
Since William Lever’s death in 1925, it was Frances D’Arcy Cooper who replaced him to become the chairmen of Lever Brothers. Cooper made several benefits for Unilever, one of his revolutionary action was that he led the various companies that included Unilever into one Anglo-Dutch companies. According to The Netherlands official UK site, “Anglo-Dutch Companies is the British and the Dutch historically joined forces to form some of the strongest companies in the world, and until now their position is still strong”. In 1937, when the correlation between the profit-earning capabilities of the British and Dutch companies found itself overturned, it was Cooper that came to solve the problem by convincing the board of the necessity for restructuring.
In the 1930s, Unilever continued to grow their business when they promoted their products in America Latin. To keep it growing, Unilever adapted a new strategy in 1940s by widening their business areas and create new areas such as particular food and chemical manufactures. Furthermore, Unilever recognized that there were something more important than widening their areas, it was the relationship between marketing and research that they must focus on. Therefore, Unilever expanded their operation by making association by two important actuations in US, those are Thomas J. Lipton company, manufacture of tea, and the Pepsodent brand of toothpaste in 1944. In 1957 Unilever continued their actions by associating with U.K. frozen food maker birds eye, and in 1961 with U.S. Ice cream novelty maker Good Humor.
In the 1980s Unilever made a revolutionary restructuring by selling most of its subsidiary business to concentrate the company’s core business. Eventually, foods, toiletries, detergents and special chemicals were the Unilever’s core business. This restructuring also helped Unilever to make a collaboration with Chesebrought-Pond’s in U.S. in 1986. That collaboration made a big impact to Unilever, their profit margin increased. Furthermore, Unilever bought Chesebrought-Pond in 1987.
Nowadays, Unilever become the world’s most consumed product brand in home care, personal care and food. In 2002, Unilever had a worldwide revenue around â‚¬48,760 million. Unilever has two main parenting companies, they are Unilever NV in Rotterdam and Netherland and Unilever PLC in London, UK. However, Unilever still has two major competitors named Nestlé and Procter & Gamble. Unilever has several worldwide products in foods such as Lipton, Knorr, Blue Band, Ben and Jerry, Walls, and Brooke bond. In home care, they have Surf, Sun, Radiant, Domestos and Skip. In personal care, they have Ponds, Vaseline, Rexona, Lux, Dove, Lifebuoy, Pepsodent, Sunsilk and Axe/Lynx.
Social and Environmental issues
Besides Unilever’s success, there are also some social and environmental issues that affects Unilever. There are several damages created by Unilever during their processes in manufacturing, supplying, and labouring.
Palm oil issues that affected by Unilever
Unilever is the company with the world’s largest buyer of palm oil. They turn the palm oil material to their products like detergents, cosmetics, bio-fuel and soaps. Their actions by cutting down the palm oil of the most area in Kalimantan was slowly destroying habitat of Orang-utan, an endangered species which lived almost everywhere in the rainforest of Kalimantan. This action resulted in the extinction of the Orang-utan species in Kalimantan. An expected of two million acres of the rainforests in Kalimantan have been cut down annually. This action is also damaging Indonesia’s rainforest, eventually leading to a severe climate change. Unilever created their products to help people in doing their daily life, but in fact they are also destroying other endangered lives. In 2008, Unilever was criticised by Greenpeace UK because of these actions.
In November 2009, Unilever announced to cancelled and stop buying palm oil from Indonesian company, PT Smart for environmental reason. In April 2010, Unilever had secured GreenPalm certificates. GreenPalm endorsed By RSPO (Roundtable on Sustainable Palm Oil), Organization formed by several stakeholders in the palm oil industry, to protect the environmental impact of palm oil and endorse sustainable agriculture. These certificates have function to cover the supplies of its European, Australian and New Zealand businesses.
Unilever’s Mercury Waste
In 1983, Chesebrough Ponds Ltd, one of U.S. company bought an area near Kodaikanal. They relocated their thermometer-making factory that had been in Watertown, suburb of New York to this area. In 1987, Unilever bought Ponds and the thermometer-making factory in Kodaikanal and became the biggest facility in the world. Then, Hindustan Lever Limited (HLL), the subsidiary of Unilever which operates and located in India, took charge of the factory.
Early 2001, there were 7,4 tonnes of mercury-contaminated wastes around Kodaikanal in Tamil Nadu found. Kodaikanal has beautiful lakes, perennially cool weather and rich forests which is why it became the most popular tourist destination in South India. After investigating the source of those mercury it was found to be from Hindustan Lever Limited factory. Mercury is a toxic metal that can harm human’s liver and brain. Once mercury come into the environment, it will be changed during natural method into a structure that works its way quickly through the food chain where it can contemplate to hazardously high levels. Mercury is the basic material to create thermometers.
In March 2001, four hundred people from Factory workers’ unions and local communities protested and complained about the unsafe waste disposal methods from Hindustan Lever Limited factory. They gave an ultimatum of either closing the factory or remove it from Kodaikanal areas. They also said since the mercury disposal happen in this area, it was destroying the Shola ecosystem of Western Ghats. After that incident, Unilever decided to postpone their thermometer production in Hindustan Lever Limited factory near Kodaikanal until they find a solution to the problem. However on June 21 2001, the Government of India ordered HLL to close the factory and ship the rest of the mercury waste to the U.S.
Unilever Use Child Labour in India
In India, Hindustan Lever Limited (HLL) has employed for expected number of 25,000 children, mostly girls in cotton seed production. They worked usually between ten and thirteen hours per day and they only got 40 Eurocents per day. Sometime, they are exposed to toxic pesticides during their work. The reason company prefer employed child than the adult was to save money in waging the labour. Usually, a child only receives 55% less than a man and 30 % less than a woman. One of their labour was Narasamma, 12 years old. She was a migrant who worked in cotton seed field for the last three years. She worked more than 12 hours per day with only two breaks. During work, she was regularly sprayed by pesticides and got ill after. However, she only earned Rs. 800 a month.
In early 2003, many countries in Europe such as Germany, Netherlands and Ireland started do the campaign to stop Child labour. This campaign started from Germany, then to Netherlands and the campaign finished in Ireland. The main message from those campaigns was that school is the best place for children, so stop child labour. In may 2003, Unilever announced that they would solve the child labour problem in India. Unilever told Hindustan Lever Limited to start rejecting the use of child labour.
Unilever is one of most influential companies in the world by providing products that help people in their daily life and also supporting global economic growth. They improve their strategy to create products time by time until they meet customer requirements. That is why most of their product trustable and convenient to be used. Some survey showed that every houses in the world at least has one of Unilever product. This is showed that Unilever is very influential in human social life. Perhaps giving value to the brand is the best action that Unilever had done. However, Unilever made some environmental and social issues in their history. Many had protested what Unilever had done in the moment. In fact, Unilever is one of the companies which have been responsible for their actions. Unilever reacted quickly by fixing the problem.
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