News Brief
Unilever 'Losing Plot' On Business Obsessing Over Its 'Sustainability Credentials': Ace British Fund Manager Terry Smith
Unilever
Terry Smith, a noted British fund manager and chief executive of Fundsmith, has slammed consumer goods giant Unilever for its continued obsession with its sustainability credentials at the expense of focusing on the fundamentals of the business.
"Unilever seems to be labouring under the weight of a management which is obsessed with publicly displaying sustainability credentials at the expense of focusing on the fundamentals of the business." wrote Smith in his twelfth annual letter to owners of the Fundsmith Equity Fund.
"The most obvious manifestation of this is the public spat it has become embroiled in over the refusal to supply Ben & Jerry’s ice cream in the West Bank." he pointed out.
"A company which feels it has to define the purpose of Hellmann’s mayonnaise has in our view clearly lost the plot." Smith stated in his note.
Despite his trenchant criticism of Unilever, Smith said that his fund will continue to hold shares of the company because of his confident that its strong brands and distribution network will triumph eventually.
Smith's £28.9 billion open-ended fund, which is the UK’s largest retail fund, underperformed global markets in 2021, with a 22.1% return compared to 22.9% for the MSCI World index in sterling terms. Unilever was one of the significant drags on the fund's slightly underwhelming performance. Unilever's shares are down 9 percent in the last 12 months
Smith's fund had outperformed the market by 6% in 2020.
Unilever's Sustainability Initiatives
Over the years, Unilever has sought to position itself as a corporate champion of sustainability.
The company plans to be net zero by 2039. On the products front, the company has claimed that its sustainability efforts is focused on transitioning to plant-based products and also developing fossil-fuel-free cleaning and laundry products.
In July 2020, the board of Ben & Jerry announced that it would stop selling its ice cream in the occupied territories.
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