Jope mounts defence of Unilever sustainability after run-ins with top investor
Unilever boss Alan Jope has mounted a defence of the firm’s focus on sustainability today after a series of bruising bust ups with a top shareholder who accused him of putting purpose over profit.
Jope came under fire from top 10 Unilever shareholder Terry Smith in January as the star stockpicker accused him of having “lost the plot”.
In a letter to his investors, Smith wrote Unilever“seems to be labouring under the weight of a management that is obsessed with publicly displaying sustainability credentials at the expense of focusing on the fundamentals of the business.”
But speaking at the World Economic Forum in Davos, Jope defended the firm’s focus on sustainability, arguing it was a commercial decision.
“Investors have exhorted us to continue putting sustainability at the heart of our business model for hard commercial purposes. Unilever is not an NGO. We’re a commercial organisation,” he said
“Consumers, particularly young people, are making brand choices based on the social and environmental impact,” he added.
Jope said Unilever’s brands that outperform on environmental or social contribution are “growing much faster than the rest of our portfolio.”
Smith’s tirade was launched in part at Unilever’s ice cream brand Ben & Jerry, which has an independent board to Uniever and is known for its bolshy political statements which have included suspending sales of the ice cream in the occupied West Bank.
Criticism of the Unilever boss intensified after it was revealed in January the firm launched a blockbuster £50bn takeover bid for the consumer arm of GlaxoSmithKline, which was then rebuffed.
IN a ‘postmortem’ letter to his investors, SMith lambasted the deal and said the “attempt to purchase the GSK consumer business is now thankfully dead rather than the value of our investment in Unilever.”
“It seems to us that Unilever management’s response to its poor performance has been to utter meaningless platitudes to which it has now attempted to add major M&A activity,” Smith wrote. “What could possibly go wrong.”
Jope has also been forced into a u-turn on the health performance on its products in the past few months, after a coalition of investors forced them into gauging the health of their products against government guidelines rather than their own.