Volatility in commodity prices will be a challenge that companies need to be prepared to face over the next two-three years, while the greatest threat to the planet is the belief that someone else will save it, Sanjiv Mehta, CEO and managing director of Hindustan Unilever (HUL), said on Tuesday.
Speaking at the FICCI LEADS 2022 summit, Mehta emphasised that it was everyone’s responsibility to ensure building a better, more equitable and sustainable future. “To be in harmony with nature, we need to orchestrate the symphony that multiple players play their part in an impeccable fashion,” he said.
Highlighting the sustainability roadmap at HUL, Mehta said India’s largest FMCG player has committed to reduce emissions from its core operations to zero by 2030 and become net zero by 2039. “We have very clearly laid down action points on each area to ensure that this is achieved … Part of my remuneration is dependent upon how the company achieves these targets, and that is how integral it is to what we have set out to do,” he said.
Alan Jope, global chief executive officer, Unilever also said the estimated disruptions caused by rising temperatures will cost companies $1.3 trillion by 2026, which will result in the loss of 80 million jobs. “Now the cost of inaction is far higher than cost of acting. Hence, to achieve superior financial performances, there is a need to build sustainable business,” he said.
While dealing with the post-Covid VUCA (volatile, uncertain, complex and ambiguous) world, Mehta said that for businesses to be effective, leaders need to build swift and resilient organisations that are future ready.
Meanwhile, commenting on the continued high inflation, he said the unprecedented inflation is not homegrown, but has been caused by several global factors, including supply chain disruption due to the pandemic and Ukraine-Russia war.
“It is very difficult to predict but I think where we have to be ready with is possible three scenarios in the world today. The inflation or a slight deflation will continue at a moderated pace from the elevated base today. The second is it could go up even further and the third is there could be a deflation in commodity prices,” he said.
He said the difference this time around is that inflation is being seen across commodities, and not limited to a few as used to be the case in the past, which is why it is a “massive global issue”.
However, he said there will be an immediate impact on energy prices if the war between Russia and Ukraine was to settle down, and that in turn would lead to prices of other commodities also coming down.