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Executive Pay

The CEO of Unilever receives a mega bonus for his contribution to “sustainable development”

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This article was originally published in French. Translation: Mathilde Balland.

Who ever said that sustainable development was incompatible with profit? The boss of the food and beverage multinational Unilever, Paul Polman, received for the first time in 2013 an extra bonus of 508,458 €. This bonus was supposed to reward his contribution to the “performance” of the group in terms of “sustainable development”. Apparently, the board of directors thought that his 1.18 million € salary, his various benefits worth 700,000 €, his 1.3 million € “normal” bonus and his close to 4 million € equity compensation – adding up to a total of almost 8 million € – weren’t quite enough to reward his devotion to building a more radiant future for humanity [1].

These last few years, under the leadership of the champion of “responsible capitalism” Paul Polman [2], Unilever has built itself an enviable reputation in the small world of “Corporate Social Responsibility” (CSR) and “sustainable development”. The Sustainable Living Plan launched by the Anglo-Dutch group aims to halve its environmental footprint and to ensure sustainable supply chains for all its key raw materials while still gaining market shares and profitability.

Social responsibility: a conception full of holes

This policy has already yielded substantial results - in terms of reputation. Unilever has hoarded a range of green and ethical certifications. The company ranks very high in the Sustainability Leaders survey and has entered into numerous partnerships with NGOs.

But under cover of “integrating social and environmental goals in Unilever’s global strategy”, it seems like Unilever is rather, in practice, introducing a commercial perspective in the management of poverty and environmental degradation. Great societal causes defended by Unilever are firmly stowed to the promotion of its brands: hygiene and bacterial diseases in Africa with the LifeBuoy soap, women’s health with Dove, climate change with Ben & Jerry’s, forest protection with Lipton… As Paul Polman says, “brands have an important part to play [3]... Under the pretense of focussing on the poor’s needs, the company is rather aiming to accompanying them towards consumerism.

Today, reducing deforestation linked to palm oil lies at the heart of the group’s environmental ambition [4]. But Unilever’s actual approach so far has essentially consisted in buying “green” certificates (called Greenplam) to producers who have the RSPO (Roundtable on Sustainable Palm Oil) label. In other words, paying money to responsible producers in order to continue stocking up as usual, while benefiting from a green label. A mechanism very similar to carbon markets [5].

When social responsibility stops at the factory’s doors

As for Unilever workers themselves, the least one can say is that they are conspicuously absent in this vision of a “sustainable company”. Obviously, the Sustainable Living Plan does not include any targets in terms of pay inequality. Nor on job preservation and treating employees decently. In France, the Fralib workers paid the price when, in 2010, Unilever decided to close their factory because it was no longer “competitive”. In reality, according to experts commissioned by local politicians, their activity would have been perfectly viable if the group hadn’t financially drained it in order to transfer the profits to Switzerland and redistribute millions of euros in dividends to shareholders [6].

The Unilever group has also been criticized several times for its fiscal practices: in 2011, over 25% of its subsidiaries were located in tax havens [7], and Paul Polman didn’t hesitate to threaten the British government to leave the country if they didn’t lower their corporate tax rates.

The Fralib workers now want to create a cooperative and continue producing tea and infusions (under the brand “Elephant”) with locally sourced products. But such a project does not seem to fit in with the way Unilever conceives sustainable development: the group has flatly refused to give up the brand.

These are the reasons why Unilever is one of the three multinational corporations targeted by the “Requins” campaign (“shark” in French) launched this year by Attac (French anti-globalist movement) [8]. The organization calls to a boycott of brands owned by Unilever (Lipton, Sun, Omo, Maille, Amora, Cif, Knorr...) in support of the Fralib struggle. On March 15th, a day of action was held throughout France.

Olivier Petitjean

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