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Unilever has a long history of social activism. One recent boss put sustainability at the heart of his strategy. Another promised to dispose of purpose-deficient brands. That makes accusations of greenwashing more galling than usual.
On Tuesday the UK competition regulator opened a probe over whether the consumer goods company was overstating the eco-credentials of its products. The Competition and Markets Authority is irked by vague claims, “natural” looking logos and unclear statements around recycling.
The CMA will investigate and may seek changes in the way the UK-based group operates. Unilever emphatically rejects the criticisms. It says its claims are responsible, transparent and clear.
Unilever is not alone in attracting scrutiny. Last year, the CMA launched an investigation into green claims made by fashion brands Asos, Boohoo and Asda. It may well open further cases, given that a preliminary 2020 study found suspect green claims attached to some 40 per cent of consumer goods.
If Unilever has undershot its own lofty claims, it will add to the backlash against “woke capitalism”. Executives might be wary of setting sustainability goals if their financial performance is weak.
Unilever can point to successes from its purpose-driven strategy, such as the growth of its “body-positive” campaign for Dove soap, now a €5bn brand.
Under Paul Polman, in charge for a decade from 2009, the share price rose by over 150 per cent, more than twice the gain of the FTSE 100 average. But under his successor Alan Jope, who was in place until this June, Unilever’s share price underperformed the FTSE 100 by 14 per cent.
Fund manager Terry Smith said Unilever had “lost the plot” after Jope said one purpose of Hellmann’s mayonnaise was to reduce food waste.
The CMA is right to crack down on greenwashing. It undermines trust in business, damages companies doing the right thing and hinders environmental progress. Companies should take their environmental responsibilities seriously — but show restraint in so-called “virtue signalling”.
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