Economic development

Our approach

The role of multinationals in economic development has been the subject of much debate. We believe that business can play an important role, not only in generating wealth and jobs around the world, but also in sharing technology, developing best practice and setting standards of corporate behaviour.

A growing proportion of our sales come from developing and emerging markets, where Unilever has been operating for many years. Continued success in these markets will depend on being able to serve the needs of consumers at all income levels, from those on low and uncertain incomes to those who are more affluent. This is an important part of our approach.

Studies on our operations in Indonesia and South Africa, and more recently in Vietnam, have given us a more in-depth understanding of our impacts on the local economy. These studies, as well as our experience of working with farmers around the world, show that the way in which we work with others can enhance economic development and poverty alleviation. We are now drawing these lessons into our work to support smallholder farmers and micro-enterprise models in our supply and distribution chains.

Our economic impacts

Our business generates wealth by adding value to the raw materials we purchase, as we manufacture products to exacting standards and market them to consumers. Employees, governments, investors and many others in the communities where we operate benefit economically from our activities.

In 2008, out of €40.5 billion sales income (turnover), we spent over €29.3 billion with suppliers and so created €11.2 billion value added through our operations. Our employees gained the largest share, earning €5.3 billion of the total. The providers of capital who finance our operations gained the second-largest share from dividends paid.

Total shareholder return is a core business measure, which reflects the value of dividends and changes in share price. Our long-term ambition is to be in the top third of a group of 21 consumer goods companies on a three-year basis. In 2008, we ranked 9th.

Our contribution to the MDGs

The Millennium Development Goals (MDGs) set out eight global targets for governments to reach by 2015, ranging from halving world poverty to halting the spread of HIV/AIDS. Our main contribution to these goals is through the wealth and jobs we create in our business and our value chain. We also contribute through our partnerships with organisations such as the UN World Food Programme and UNICEF.

Business' contribution to development

Concerns are sometimes expressed about how the benefits of economic globalisation are shared. We recognise that economic growth has broader social and environmental impacts, both positive and negative. To understand these better, we carried out two studies, one with Oxfam on Indonesia and one with Professor Ethan Kapstein from the European business school INSEAD on South Africa. A third piece of work, using Unilever Vietnam as a case study, was published by The Central Institute for Economic Management (CIEM) in 2009.

These research projects have supported our views on the role business can play in society. They have also raised useful insights on where we can enhance our local impacts.

We are also exploring development issues as members of CSR Europe's working group on the Base of the Pyramid. This initiative involves other Europe-based companies and seeks to explore opportunities to work jointly with the European Commission.