Nicole Sparshott on Business & Sustainability
Interview with Nicole Sparshott
What does a purpose-led global business look like? Nicole Sparshott knows; she’s leading two of them through their biggest transformation yet.
CEO of Unilever ANZ and Global CEO of T2, Nicole is spearheading a sustainability revolution in Unilever – one of Australia’s most iconic FMCG brands – and well on her way to making T2 certified sustainable by 2021.
In this episode, we talk to Nicole about reconciling commerce with our carbon footprint, overcoming barriers to achieve sustainable outcomes and more.
Transcript
Douglas Nicol: Hello, I’m Douglas Nicol, and welcome to Smart Dust, the podcast that likes to look at the tech and innovation trends and people that are changing our world. Sometimes big mega trends and sometimes, well, the ideas that sit at the fringes of science and technology. As always, I’m joined by digital trends and innovation devotee, Mr. Nick Abrahams.
Nick Abrahams: Hello Douglas, and hello, Smart Dusters. Indeed, I am a devotee of all things innovation, and I’d hoped that the people see Smart Dust as always paying homage at the temple of innovation. So, great to have you on with us today.
Douglas Nicol: And worshiping with us today at the temple, we are lucky to be joined by the fantastic Nicky Sparshott, CEO of Unilever for Australia and New Zealand, but also the Global CEO of tea brand T2. Nicky has had a stellar career, joining Unilever in 2006 as Marketing Director of foods, ice cream and beverages. Then she moved to Singapore to take up a number of leadership roles.
She was appointed Global CEO of T2 in 2016, and in her time since then has accelerated the business through market expansion, channel diversification and an impressive sustainability revolution, which we’re going to be talking about in a moment.
Unilever, as many of you will know, is one of the world’s leading suppliers of beauty and personal care, home care and foods and refreshment products. And an incredible fact is that Unilever actually serves 2.5 billion consumers a day with their products.
In Australia, Nicky presides, over an incredible iconic set of brands, including Dove, Rexona, Lynx, Continental, Ben & Jerry’s and Street’s Ice Cream. Nicky is recognized as one of the most forward-thinking CEOs in Australia today, and is a model for what the modern corporate leader looks like. Nicky, you’re very welcome to Smart Dust.
Nicky Sparshott: Thank you so much for having me. I’m actually super excited to be with you both today.
Nick Abrahams: Nicky, thanks very much for joining. Now, maybe just to jump into it, you’re very much a leader for the times. You have a passion for purpose-led business, and in your case, the purpose center of gravity is really around sustainability. And so to sort of jump into the hard questions first, I mean, how do we reconcile commerce and minimizing our carbon footprint?
Nicky Sparshott: Yeah. Well, look, even if we think about what’s going on today, coronavirus has been this really stark reminder of the fragility of our economy, and climate change and environmental threats is just another threat to that shared security. So we are in a moment in time that is bringing the future forward faster than it’s ever been brought forward before, and I think this is where really anchoring a sustainability agenda deep within your business agenda can unlock some magic.
And the reality is that doing good can also be incredibly good for business. And let me give you some examples of that at Unilever. We’ve just recently announced the launch of what we’ve called our Clean Future initiative, and it’s an example of how we’re reconciling our vision to make sustainable living commonplace and equally affordable.
And then let me tell you a little bit about Clean Future. It’s about basically recognizing that two-thirds of people across the world want to buy sustainable cleaning products, but few of them believe that they’ll actually work as well or as good value as the products that are already on the market.
So we’ve basically announced a 1 billion Euro, so about 1.6 million Australian dollar ring-fence fund over the next 10 years, which is going to focus on marrying technology with our ambition to remove fossil fuel-based ingredients from all of Unilever’s laundry and cleaning products globally. And what we’ve seen is an increase in usage of those products as a result of COVID.
And so now we’re going to be injecting those in a way that people can feel super confident that they’re buying great products that work hard, but they are crafted and curated with innovation and tech. That means that they are really sustainable for the planet. We’re removing those fossil fuel based ingredients with more renewable sources of carbon. So really excited about that.
Nick Abrahams: That’s extraordinary and that level of investment is fantastic. I guess, you talked about the way they craft it and such, which brings in that issue of the supply chain. So I guess, how do you achieve those sorts of outcomes across the whole supply chain? How do you get that level of cooperation?
Nicky Sparshott: Yeah. Look, it’s a brilliant question because what we know for sure is that the imperative to do these things is there, but the ability to enact on it is going to require what I like to call a coalition of the willing and able. So for us, we need everyone that’s in our value chain to be participating in making these meaningful investments in sustainability along the journey.
So we partner with suppliers and we prioritize partnerships, in fact, with suppliers who’ve set and committed to their own science-based targets to reduce carbon footprint, or to remove the amount of virgin plastics in their operations, or to proactively pioneer the use of renewable energy in their operations. All of these things are commitments that Unilever has made globally, and certainly in Australia, we’ve had some great examples of doing that.
At the beginning of the year, actually in January of 2020, we just announced that we’ve gone 100% renewable electricity in our operations, which is very exciting. And our next job to be done is really seeing how we can electrify all of our manufacturing processes as well. But the key thing here is to make sure that everybody in the supply chain, right from when you source your ingredients to when a consumer buys them off the shelf, has given consideration to whether there are more sustainable ways of producing that product so that a consumer can trust that the product they’re buying is good for them and good for the planet.
Douglas Nicol: Nikki, I wonder, are consumers willing to pay a premium for something that actually has that sustainability rigor behind it? What’s the trade-off there in terms of price versus the doing the right thing by the environment?
Nicky Sparshott: Do you know, the reality is that there are some consumers that are prepared to pay more for sustainably produced products. And we also have a belief though at Unilever that it shouldn’t cost you the earth. And I used the pun deliberately there. It shouldn’t cost consumers more to have sustainable products, but it also shouldn’t have a negative impact on the planet.
And so I can give you an example. We’ve just launched a new range of OMO laundry products, it’s a new sort of EcoBoost range. And it’s been made with these plant-based polymers, which is like a fancy name for the active ingredient that removes the stains. And they’ve also got these biodegradable enzymes, and all that tech stuff basically just means it uses a lot less fossil fuel in the way it’s been made. It’s more plant-based.
It contains 30% of post-consumer use recycled plastics, so plastic that’s already been in the economy that we’re reusing again, and it’s a hundred percent recyclable. But the best thing is, we’ve brought this into the market and we’ve not charged more than the original OMO product was, because we really want people to be able to have access to sustainably produced, great, hardworking products without necessarily having to pay more for them.
Douglas Nicol: That’s great because it makes it available to mainstream consumers as opposed to just the elite. So now, one of the hats you wear, in fact, I don’t know how you do wear so many hats in your career. In addition to running Unilever in Australia and New Zealand, you’re also Global CEO of tea brand T2.
And interestingly, you’ve been through the B Corp process, and for listeners who are less familiar with the B Corp process, B Corp certified organizations and businesses that meet the highest standards of verified social and environmental performance, public transparency and legal accountability to balance both profit and purpose. So I’m fascinated about the process, the rigor behind that and what it’s done for the T2 organization.
Nicky Sparshott: This has been one of the most exciting journeys that I’ve had the privilege to be on with the team. I remember when we first as a leadership team at T2 floated the idea of sort of the what if we could become a B Corp? The initial reaction was one of a little bit of horror, like a deep breath, “Oh my goodness. Is that going to be something that we could actually do?” With a sort of notion of will it be difficult? Definitely. But would it be worth chasing? Absolutely. And it became a real galvanizer in the organization. The T2 actually, within the Unilever family, is the first brand that’s become a B Corp after acquisition. All of the others were B Corps when we acquired them. So this has been a really exciting experience for T2, but also for Unilever more broadly. And it’s really helped us to lean into very uncharted waters and work our way through how we get through it.
Look, for T2 becoming a B Corp was about becoming part of a global movement that was in intent on redefining success in business by challenging companies and challenging ourselves to be both the best tea in the world and the best tea for the world. For our partners that work with T2, for our team members across the globe at T2, this was like a why that you would get up in the morning for. We had to do some really heavy lifting, hungry engineering our end to end value chain in order to be able to make sure that we were sustainably sourcing our teas and other ingredients, that we were removing unnecessary plastics and replacing them with more plant-based alternatives, that we made sure all of our packaging was recyclable. And if not, biodegradable and compostable. That we were working with our teams in the most diverse and inclusive manner so that we have equity across the way the business works.
Look, it’s been super exciting and I have to say our customers have taken great joy out of it. I think we’ve always been privileged to have this amazing group of advocates that love T2 tea, but I think we’ve all been just so high to see the passion for T2 as a B Corp and all the effort in making sure that we’re good for the planet and good for communities as well.
It’s actually also really helped us to drive our online community. So we have this T Society at T2, and we like to think of it as a global generation of T2 drinkers and advocates. We’ve really been able to build that community. I’m sure in part, the increased numbers of people, we’ve got about I think about 4.9 million people now sitting in our T Society globally, have come together also not only for their passion for tea, but for their passion for a tea company that is doing the right thing in the right way.
Nick Abrahams: Nicky, to go through that process, there must have been dark moments where you hit brick walls or it just becomes really difficult. You’re trying to run a business, run a P&L and you’re trying to transform the business in the B Corp process. What were some of the darkest moments on that journey?
Nicky Sparshott: Oh yeah, there were plenty of them, right? It’s easy to tell the story after the fact, but if the team were here now, they would maybe paint a less rose tinted glass view of that journey. Look, because you don’t know what you don’t know, so quite often, and I think this is the reality when you set these big hairy, audacious goals around what you want to do as an organization that’s a forced good that really genuinely does have a positive impact is that sometimes you can set the ambition, but you don’t know how to get there. That requires innovative thinking, lateral thinking. It requires leveraging your ecosystem of partners that could be expert in this area and can help you solve for problems. We got really good at identifying problems and then thinking about how we were going to overcome them through this sort of mindset of resource abundance, rather than thinking we had to have all the answers ourselves. Let’s bring in some people that can help us to solve for this.
The other thing that we found along the journey is sometimes it is more expensive and it is more complicated to be a B Corp because you’re not taking the easiest path. You’re taking the right path. So we really had to think through if we want to make this choice and that in the short term is going to have a non-cost, how will we fund it with maybe less value added stuff that’s sitting in our P&L so that we can make sure that we free up the funds to do this? And really ultimately, lean into the reality that what we know for sure is that the community today, consumers today are voting with their hearts and also with their wallets when it comes to purpose led brands. So that galvanized us in those darker times.
Nick Abrahams: That’s such a terrific story because becoming a B Corp is obviously an extraordinary process. I should note too, that it is possible for Australian only brands do to become a B Corp. So it’s an interesting opportunity out there. The whole ESG, so the Environmental, Social and Governance movement has sort of been galvanized too by the investment community. I think BlackRock, as one of the big fund managers, has been prominent with saying ESG is sort of front and center. Do you see that? Obviously from T2’s point of view, it feels like that was driven by the consumer. Do you think that organizations will be driven by the investor community and the investor community saying ESG is important to us?
Nicky Sparshott: I think that we’re going to see lots more impetus from the investment community for sure. But at the heart of it, I think that there is nothing more powerful than demonstrating to governments that accelerating progress in a much more sustainable future forward cleaner future is possible. So I think the key here is don’t boil the ocean, just find the one or two meaningful steps that are relevant for the business that you’re in where you can genuinely make impact and take that first step. Because that will then naturally lead to the next one and the one after that, and a bit of momentum that then comes and before you know it, it’ll be not a project or an initiative in the organization. It will just be the way of doing business. And it will be hard, but it will be rewarding. So I would just say just give it a go.
Nick Abrahams: Just straight in. How does it work? I mean, have you appointed… Are there new titles that are created out of these sorts of initiatives? Are there people whose day job is 100% taken up with the purpose of the organization?
Nicky Sparshott: At different companies doing it in different ways. We certainly, we have the really good fortunate at Unilever instead of having a group of people headed up by an incredible leader and passionate team that focuses on sustainability and the communications around that as well. That allows us to really translate those big initiatives that we’ve called out that we want to be famous for, I guess, at Unilever and make sure that we operationalize them. Because at the end of the day, it’s easy to set the targets. It’s obviously much harder to then transform the organization to deliver them. We’ve made a decision, we’ve talked about the renewable electricity, but we’ve also made a call that we want to reduce the amount of virgin plastics that we use in our business by about 50%.
Nick Abrahams: Wow. Right.
Nicky Sparshott: When we do that, that will literally take hundreds and thousands of tons of plastic out of the system. But what would be even more awesome than that is when we could increase the amount of post-consumer recycled plastic in our operations. If we could get that to 25% or 30% so we’re almost creating or being part of a much more circular economy, then that’s even better. So a group of people with the expertise to be able to guide us, to be able to make those choices has been super valuable in our organization. And it gives it the real focus that it deserves. But we’ve tried above all, to make it a critical skill set that everybody in the organization can lean into. And every little bit counts on this sort of stuff.
Douglas Nicol: Nikki, the wider technology and innovation world is quite exciting in food technology. And others in particular technologies and innovations you’re excited about in the food sector. Because obviously, feeding the planet, and there are some significant challenges in the food sector. Are there particular technologies and innovations you’re excited about?
Nicky Sparshott: I think what was really interesting about that point is that it’s a really large complex business. We’re seeing the cost and the impact that things like extreme weather patterns can have on our operations. And you feel that in big disruptions in agricultural value chains, you see it in increasing water scarcity, which impacts raw materials. You see it in disruptions to manufacturing and distribution. We’ve seen it … I mean the Australian bush fires recently, I think really talk to the devastating impact that that can have. And when you’ve got these extreme weather events, they reduce economic activity and then they really also then create some pressure on demand for goods and services. So it is imperative to invest in the tech that can help us.
On foods, let me give you an example of something I’m quite excited about. We’re really quite fortunate that about 70% of all of the products that we make in Australia and New Zealand are locally produced. So I’m quite passionate about what can we do to modernize manufacturing? And what type of innovation options are acquired here?
We’ve got a factory in Melbourne it’s our Tatura food factory. One of the things that we’ve been looking at there is whether we could replace our reliance on gas, so let’s say gas boilers, with solar thermal for heating instead. And we started looking into it and realize that actually that’s going to be quite challenging because of the degrees required to be able to produce our products.
Now, the conversation could have ended just they’re too difficult to move from gas to solar thermal. But what I love about what the team did was they actually wound right back and said, “Well, let’s go back to the start of the process. Is it essential that the way we’ve always produced our food products is the way that we need to produce them moving forward? Or do we need to radically rethink the production process from the beginning in order to be able to accommodate more renewable energy sources as part of our manufacturing?”
And that’s been really a bit of an unlock for us. Now, we’re not there yet. But I think it does require a bit of recourse, not just looking at the symptoms, but going back to the root cause of why some of these things challenging then innovating in really lateral ways to do that. And again, I think we don’t have all the answers ourselves on some of this stuff where we are going to have to partner with other companies that have expertise in this space. In a similar way to what we did with plastics. We partnered with Visy [inaudible] in Australia to source Australian recycled HDP plastic. And now our bottles are made with 25 to 70% recycled plastic depending on the brand. But, we wouldn’t have been able to do that without the expertise and the capability and the passion that sits in some of our partners’ businesses.
Douglas Nicol: Yeah. Despite all the challenges we face in our world, it’s a pretty exciting time to be in business because you can affect change to a much higher degree than maybe 15 years ago.
Nicky Sparshott: Yeah, absolutely. I really, I do think so. I think that’s super exciting. We can’t predict the future, but we can create it, or at least collaborate to try and create a better one. And I think for businesses, we have an opportunity and we also have a responsibility to take the lead on some of this stuff because we have amazing people in our organization that not only have incredible passion for this, but they understand consumers. They’re innovative and they’ve got a real heart to seeing some of this take place. And we know that when we can harness that energy inside the organization to create this change, then we’ve got a pretty good chance of harnessing a similar energy externally to do the same thing. So I agree with you. It’s a cool time to be business.
Douglas Nicol: Yeah. Nikki, [inaudible] a very exciting time for the future, I guess. And you talk about innovation. And I’ve noticed, some of the companies you mentioned they are Australian companies. Often Australia is lampooned as not being particularly innovative. And we sort of rank down the bottom often of OACD tables and things like that. But what’s your view on Australia and our capacity to innovate?
Nicky Sparshott: I think we are fueled by this impossible is nothing spirit. One of the things I’ve enjoyed the most about coming back to Australia after having spent a number of years abroad is just the grit and the resilience that sits in the very DNA.
Douglas Nicol: You mentioned COVID and I guess it’s obviously impacted everyone’s lives significantly. Could you give us a sense of how has it changed your business and what have you done in the business to respond to COVID?
Nicky Sparshott: Yeah, absolutely. Look, it’s been quite an extraordinary period of time. And I joined the business about seven months ago now. My very first address to the organization was a virtual town hall where I introduced myself and then told everyone that we were going to be working from home indefinitely under COVID protocols. So it’s been baptism by fire, literally for me. And I’ve not even had a chance to go into the office and meet many of the wonderful [inaudible] members in person. So this has been a period of real adaptability and agility actually.
Our priority when it kicked off was really to keep the supply chain going. And we had the … we were supplying essential goods to Australians and New Zealanders. So we really wanted to focus our energies on making sure that we had resilience in our supply chain. We wanted to be that force for good for the Australian and New Zealand community and really despite the challenges, focus our energies on making sure that we could support communities when they needed it.
We had to increase our operational agility to manage the sort of short-term demand fluctuations that were in place. And at the same time, really pivot for alternative sources of manufacturing and to prioritize what products we were going to get onto the market and what we may needed to sort of hold off on. And really, I guess at the heart of it, was just leaning into this new reality quite quickly.
We’ve been quite conscious to not feel like this is all going to go back to normal at some point, but to really focus our energies on how do you survive the crisis? How do you quickly move into driving a recovery? And then how do you really re-imagine so that you can thrive in whatever this new reality is going to look like? So there’s been definitely some challenges for sure. I think every business has faced it.
And I also think a number of businesses have seen some of the silver linings that come out of COVID too. Necessity is the mother of invention. I’ve never seen so much innovative thinking in our organization as I have over the last six months. And so much of the “All in, we have each other’s backs, we’ll get this done” mindset, which has been kind of amazing.
Douglas Nicol: Nikki, one of the things that I think is interesting about you is that you’re a real champion for diversity and inclusion within the organization. Why is this important and what are the benefits to the organization?
Nicky Sparshott: But I think at the heart of it, it’s this notion that you’re going to, you can have people that look different sitting around your table, your virtual table, and feel that you have a diverse group, but actually if they don’t bring different thinking and different perspectives to the table, then, in my mind, we’ve not really cracked the code on diversity in actuality. So I’m really passionate about making sure that we invest heavily in the currency of ideas and those ideas can come from any part of the organization, any part of the hierarchy, any functional area. They very rarely come from the C-suite, let’s say.
They come from the people that are close to the front lines. And they’re the heroes of our operations, the teams that are working in the factories to produce our products, the teams that are out in the field that are making sure that our products are available for consumers day in, day out.
So I just want to make sure that we have a really representative sample of humanity in our business so that we can make sure that we draw on all that rich perspective. I do think it makes business stronger. It certainly makes society stronger. So, and we know for sure that it unlocks growth. It brings us closer to our diverse consumers boosts financial performance, and hopefully makes us a really attractive place to work.
I want people to feel that they can show up at Unilever in the most authentic way that they can and feel like they belong. I mean, at the end of the day, we want diversity. We want inclusiveness, we want equity, but the reason we want all of those things is because we want people to feel like the time that they’re investing every day and giving to Unilever is a place where they belong and they can thrive. So that’s why it’s important to me.
Douglas Nicol: Nikki. [crosstalk] I think you’ve got most of our listeners will be signing up to join. Certainly I might be with, and even though you talk about we want to have the best tea in the world and be the best tea for the world. Give people a reason to wake up in the morning. It’s fantastic. Just one final question, which is really just some advice for folks which is, now if you were starting your career today, what sort of skills and career focus would you have?
Nicky Sparshott: Really be focusing on how I build a toolkit of experiences, of diverse experiences versus feeling like I need to climb some sort of very old fashioned corporate ladder. I’d be thinking about my journey a little bit more like a rock climbing wall. I want to be moving sometimes up sometimes sideways. Sometimes I’m going to fall off and that’s okay because some of the richest learning that you get is when you take some risks. And sometimes you fail to do what you thought you would do, but it’s some of the best experience that you can ever put in your toolkit when you learn from that and get back up and do it again. So that’s what I would be looking at. I would definitely say you want to be super citizen centric, really understand the people that you’re serving.
You’re perspective of the industry that you’re in or the function that you’re in. And have that real sort of understanding of the consumer and the person that you serve. Get comfortable with this digital landscape. It’s not going anywhere. If anything, it’s being massively accelerated. And I think just making sure that you have enough tools to understand how the navigate it is really important. One of my favorite things to do is I love to mentor people that are in the business, but what I love even more is I’m doing a lot of reverse mentoring where I get a 20 something digital native to just help me on my own journey to get better at the stuff that is not intuitive to me, but it’s really, really important for business today. And that’s great. I think, make sure you’ve got a good network of people that have expertise and capability that you can learn from, because I think that helps enormously.
And then the last thing I would say is hold on to it lightly, have a bit of fun and make sure that every single day you are learning something new because that’s what keeps it exciting.
Douglas Nicol: Nikki, thank you so much for joining us on Smart Dust and that wraps it up for this episode. As usual, there are some links and notes for you to peruse for this episode in the iTunes program notes. If you’ve enjoyed the episode, please rate us on your podcast platform of choice and indeed go crazy and subscribe to Smart Dust. Thank you to the wonderful content creators that daresay who produced this podcast. Now, if you’ve enjoyed hearing about leadership and the hallmarks of a modern leader, maybe listen to our July, 2020 chat with Tim Reed, who is the president of the Business Council of Australia, definitely worth listening to. So from me, Douglas Nickel.
Nick Abrahams: And me, Nick Abrahams.
Douglas Nicol: Goodbye.
Nick Abrahams: Bye. Thanks everyone. Smart Dust was produced in partnership with the content experts at Dare I Say.