Unilever and P&G: A Comparative Study on CSR and Ethical Governance FIN 5004 Financial Statement Analysis – Assignment 2 Shahida Zahra Binti Zarir (25078676) Deadline: 11 October 2025 Assignment 2: Project II Financial Statement Analysis Unilever and P&G: A Comparison of CSR and Ethical Governance In this report, the corporate social responsibility (CSR) and ethical governance practices of Unilever and Procter & Gamble (P&G) will be examined. As the world grows increasingly conscious of sustainability, companies are expected to play an active role in advancing this shared global goal. That said, both Unilever and P&G recognised the importance of sustainability long before global frameworks formalised such commitments. Analysing these two long-standing companies will provide meaningful insight into the real impact of adopting sustainability-driven business strategies. CSR Initiatives & Impact Unilever is widely recognised for its broad CSR initiatives. It covers from addressing climate, to nature, plastics, and to livelihoods of the community. Meanwhile, P&G mainly focuses on four-pillars of sustainability: Climate, Waste, Water, and Nature. The most recognised initiative by Unilever is the Health, Hygiene, and WASH campaign. Leveraging Lifebuoy as its main brand for this campaign, Unilever has made significant strides in promoting hygiene and sanitation (Unilever, 2025). Unilever reported a 40% reduction in child mortality rate where these programs were implemented (Unilever, n.d.). Consequently, Lifebuoy has grown into a €1 billion brand. From this, Unilever has created an association of hygiene health to Lifebuoy. This presented the business to opportunities of working with governments in Ethiopia, India, Indonesia, and more, to embed hygiene education into school curricula. As for P&G, its business has been pursuing impactful CSR through its Children’s Safe Drinking Water (CSDW) program. For over 20 years, the initiative has provided over 24 billion litres of clean water across 100 countries, bringing the company close to its 25-billion-litre goal (Procter & Gamble, n.d.). P&G’s partnerships with relief organizations such as Americares, CARE, GlobalMedic, and World Vision, has helped P&G accomplish its main business objective, which is, fuelling on innovation while prioritising wellbeing of community (Procter & Gamble, n.d.). Its effort into ensuring sufficient access of water has persisted, indicating a materialised benefit to society and the brand itself, as they have expanded to restoring water in waterstressed areas (Procter & Gamble, n.d.). Ethical Decision Making According to Leelawati et al. (2025), Unilever follows a structured ethical decision-making process under its Sustainable Living Plan. First, a Sustainable Living Management Team oversees the company’s sustainability strategy and moral dilemmas. Second, all new innovations undergo an internal process review to ensure alignment with environmental and social principles. Third, Unilever systematically evaluates the human rights implications of business decisions. Finally, the company consults both regional and global committees to adapt moral standards to different cultural contexts. P&G ensures ethical decision-making among employees through its Code of Business Conduct and Ethical Standards, which provides clear guidance and examples of ethical dilemmas employees may face (Procter & Gamble, n.d.). Employees are given direct channels for reporting concerns, fostering a “Do the Right Thing” culture (Procter & Gamble, n.d.). The company also reinforces its principles of Respect, Integrity, and Stewardship through continuous learning and training. Importantly, these ethical standards extend to suppliers and business partners, as P&G explicitly states that it will terminate any relationship with partners found violating its ethical code. Stakeholder Interests Unilever’s strategy and business model are centred around prioritising their stakeholders. Through a robust process, Unilever has identified its stakeholders which are its consumers, suppliers, business partners, shareholders, the planet and society. To establish connection with these stakeholders, Unilever has consistently engaged across their value chain (Unilever, 2025). This is as Unilever ensures on staying inform about the stakeholder’s evolving needs to make strategic and well-informed business decisions, address all key-issues raised (including sustainability issues), and strengthen their partnership. For example, to prioritise their shareholders’ interests, shareholders are given the ability to communicate directly with the Board of Directors and the Management Committee during Annual General Meetings to raise and address their queries and worries. P&G’s has highlight their objective to deliver a balanced top to bottom line growth while serving the needs of all stakeholders. Stakeholders were clarified as consumers, customers, employees, society and shareowners. For instance, P&G is committed to honouring the individuality and unique contributions of their workers. They place emphasis for every single employee to show up to work as their whole authentic self while feeling safe to do so. This is as P&G believes that a stronger company is built through diversity of thinking. Furthermore, based on P&G’s Citizenship Report, they have outlined corporate governance practices to promote strong board and management accountability as to protect shareholder’s interests (Procter & Gamble, n.d.). Long-Term Value & Equity Metrics According to Kusuma and Khairunisa (2021), Unilever has avoided €1 billion in costs since 2008 by improving water and energy efficiency, using fewer materials, and reducing waste. This demonstrates how ethical decision-making can drive supply chain transformation while maintaining profitability (Leelawati et al., 2025). As illustrated in Figure 1, Unilever’s Priceto-Earnings (P/E) ratio has generally increased over time, reaching 23.98 in 2024, reflecting investor confidence and expectations of future earnings growth. Similarly, its Earnings per Share (EPS) stood at 2.29 in 2024, signalling high-quality, sustainable growth despite heavy CSR investment. Figure 1 Unilever Equity Valuation Metrics Note. Figure above shows equity valuation metrics such as Price to Earnings (P/E) ratio and Earnings per Share (EPS) ratio/UNA.AS of Unilever. Wisesheets. https://www.wisesheets.io/pe- Figure 2 P&G Price-to-Earnings Ratio Note. Figure above shows equity valuation metrics such as Price to Earnings (P/E) ratio of P&G. Macrotrends. https://www.macrotrends.net/stocks/charts/PG/procter-gamble/ In 2019, P&G channelled significant resources toward promoting diversity and inclusion. Campaigns such as #SeeHer achieved 26% higher sales growth, and the company found that its most successful brands were also its most inclusive (P&G, 2019). This illustrates how embedding sustainability and social advocacy into brand strategy can enhance both trust and financial performance. As shown in Figure 2, P&G’s P/E ratio peaked at 68.25 in 2019, further validating the market’s confidence in its citizenship-driven initiatives. Transparency & Reliability of Disclosures Unilever embeds CSR and governance reporting across multiple publications, including its Annual Report, Unilever Sustainable Living Plan, Business Responsibility and Sustainability Report (BRSR), and Strategy and Growth Action Plan. Although not all are externally audited, key reports undergo review and assurance by relevant committees, enhancing reliability. The BRSR framework ensures consistency with recognised international standards. Unilever’s reporting demonstrates strong transparency, as its initiatives are tied to measurable performance indicators. Notably, its BRSR acknowledges unresolved workplace harassment cases—an uncommon level of disclosure that reflects honesty and accountability. Collaborations with NGOs and local partners further validate its CSR claims, though critics have questioned the lack of independent verification for its plastic-reduction metrics. Unlike Unilever, P&G primarily reports sustainability efforts through its corporate website and Citizenship Report, which are not externally assured. The Citizenship Report (updated only until 2023) and the last Environmental Sustainability Report (2019) make its disclosures appear less current and comprehensive. While P&G publishes data on carbon emissions, it lacks detailed quantitative measures of social or community outcomes. However, recognition such as ranking first on United Way’s “Workplaces That Care” list reflects external confidence in its corporate culture and employee well-being. Comparative Analysis Both Unilever and P&G demonstrate strong commitment to CSR and ethical governance, yet their approaches differ in scope, transparency, and stakeholder engagement. Unilever adopts a comprehensive, integrated model, embedding sustainability into its business strategy through initiatives such as the Health, Hygiene, and WASH campaign. This approach supports public health while reinforcing brand growth and market presence. Conversely, P&G’s Children’s Safe Drinking Water (CSDW) program is project-oriented, addressing specific global challenges such as clean water access. Ethically, Unilever employs a values-driven governance model that combines oversight, human rights evaluation, and stakeholder dialogue. P&G, in contrast, implements a rules-based approach, offering clear behavioural guidance through its Code of Conduct. While P&G’s structure enhances compliance, Unilever’s integration of ethics into operations reflects a deeper cultural commitment. In terms of transparency, Unilever’s disclosures are broader, verified, and globally aligned, whereas P&G’s are less frequent and unaudited. Overall, both companies uphold high ethical and social standards, but Unilever demonstrates greater coherence between sustainability, transparency, and long-term value creation, positioning it as a stronger benchmark for responsible corporate leadership. In conclusion, both Unilever and P&G exemplify global leaders in sustainability and ethical governance. Their long-standing CSR initiatives reflect the growing importance of aligning business objectives with societal well-being. However, Unilever’s stronger integration of sustainability into its strategy, coupled with transparent reporting and measurable impact, sets it apart as a more mature and reliable model of corporate responsibility. P&G’s efforts remain commendable, particularly in innovation and inclusion, but require greater disclosure consistency. Collectively, both companies illustrate how ethical governance and CSR serve as vital drivers for long-term value creation and stakeholder trust in today’s corporate landscape. Word Count: 1372 References Bernard Business Consulting. (n.d.). Case study SDG 16: How Unilever drives transparency and justice in Malaysia’s and Indonesia’s palm oil sector. https://bernardbc.com/casestudy-sdg-16-how-unilever-drives-transparency-and-justice-in-malaysias-andindonesias-palm-oil-sector/ Khairunisa, M. & Kusuma, N. (2023). How Unilever transforms its business with Unilever Sustainable Living Plan. https://greennetwork.asia/gna-knowledge-hub/how-unilevertransforms-its-business-with-unilever-sustainable-living-plan/ Leelawati, Ashu, Leena, Jasdeep, Singh, A. (2023). Unilever’s ethical decision-making model. International Journal of Environmental Studies, 5(3), 45–52. http://theaspd.com/index.php/ijes/article/view/3099/2369#:~:text=Unilever’s%20ethic al%20decision-making%20model Procter & Gamble. (2023). 2023 Citizenship Report. https://downloads.ctfassets.net/oggad6svuzkv/7PrU3Jq8gGsPAUl7fgZiR/919bd0309c cc76fd6365e047ba58ee5a/P_G_2023_Citizenship_Report_PDF.pdf Procter & Gamble. (2024). 2024 Annual Report. https://assets.ctfassets.net/oggad6svuzkv/1axqmYoGvExvpVj5ndTYld/dca130713c76 12ea84bc4d425752f1cb/2024_annual_report.pdf Procter & Gamble. (n.d.). Children’s Safe Drinking Water (CSDW). https://csdw.org/ Procter & Gamble. (n.d.). Environmental sustainability. P&G. https://us.pg.com/environmental-sustainability/ The Procter & Gamble Company. (2014.). DistributionNOW Code of Business Conduct and Ethical Standards. https://media.corporateir.net/media_files/IROL/25/252871/Codes%20of%20Conduct%20and%20Ethics/Cod e%20of%20Conduct.pdf The Procter & Gamble Company. (2019). 2019 annual report. https://s204.q4cdn.com/332108499/files/doc_financials/2019/ar/e28f717a-9858-69a18783-00c4604463cd.pdf Unilever. (2021). 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