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Unilever boss defends scrapping of 'unjustified' final salary pension scheme

  • @LauraHChesters

The chief of the world's second-biggest consumer goods company has defended his position on scrapping the firm's final salary pension scheme.

Unilever, which sells everything from soap to ice cream, is facing a huge backlash from workers over its planned closure of the scheme.

It has been hit by strikes over the past month and the union met yesterday to discuss the next stage of its strategy.

But Paul Polman, Unilever's chief executive, told The Independent on Sunday this weekend: "I have been attacked. People have said that because I am running a huge profitable company or because I have quote ... unquote a huge salary, it is unfair.

"But the fact is we have to remain competitive in a global market. People are living longer.

"When defined benefit pensions were first conceived, people on average only lived 10 months after retirement, but now we are living as much as 30 years after retirement. We cannot justify it any longer."

Mr Polman, who spoke at the Bilderberg Conference, in Holland on Friday, said the role of business in the world has changed and has called for a "new form of capitalism" and "one that is sustainable and equitable and in sync with humanity."

He added that pension reform is just one element of how a new structure for capitalism must be put in place to ensure growth for the long term. He is against companies reporting quarterly and says: "Updates should only be about the long term. Focus should be on three or five years, not the quarter."

Mr Polman said Europe faces a growth challenge and a societal challenge.

He said: “We must engage with the two billion consumers that we have. Consumers are becoming more aware and will only spend money with companies that they trust. We are doing many different initiatives that are making our company sustainable.”  

Unilever has begun a number of partnerships including one with Oxfam and is focusing on initiatives such as its sustainable living plan.

In the UK Unilever has a number of campaigns such as encouraging consumers to have shorter showers and wash clothes at a lower temperature to ensure their customers reduce their consumption of energy.  

He said: “We, as a company but also as individuals, need to take responsibility for what is happening in the world. I want to double Unilever's business while reducing our impact on the world.”  

Unilever is also working with its supply chain, including farmers, with the aim of improving its sustainability in light of the huge population growth and growing demand for food and produce.

Polman, who is involved with development and food security on the Business 20 (B20) - part of the G20 Summit, said: “A child dies of hunger every 6 seconds. We all need to take some responsibility. The new form of capitalism should be in sync with humanity and be focused on the long term.”