Sustainability, a longitudinal case analysis of acquisitions and disposals in a leading consumer goods company

Purpose: Despite the question of “how businesses can balance profitability and sustainability?” being one of the most challenging issues facing global leaders today, there have been few studies that examine the sustainability of acquisition decisions, especially from a social perspective. The paper illustrates how the acquisitions and disposals decisions reported by a keystone organisation align (or not) with their sustainability commitment from 2011 to 2020. Design/methodology/approach: This longitudinal case study focuses on an acknowledged sustainability leader in the consumer goods industry, Unilever, using archival evidence. An analytical framework informed by integrated thinking is developed to operationalise stewardship theory. Empirical data on 37 strategic acquisitions and 17 disposals, gathered from Unilever’s annual reports for the ten years, press releases and news media are investigated by interpretative content analysis. This archival evidence is supplemented by external stakeholder interviews. Findings: Our analysis shows that most of Unilever’s acquisition decisions and all the disposals had an economic rationale, though some acquisitions were clearly aligned with the company’s sustainability commitment. Various aspects of integrated thinking were observed in acquisition disclosures. Our analysis is interpreted by representatives of stakeholder groups in some unexpected ways. Research limitations/implications: One of the limitations of our study is the fact that it takes a single case company. Further research could draw on more than one case to make comparisons of the M&A rationales. Practical implications: This case analysis provides practical insights into sustainability behaviours that other firms may follow to achieve SDG-related targets. Furthermore, we found that integrated reporting demonstrated by Unilever’s annual reports lacks transparency around M&As. We therefore call for policymakers to make explicit disclosure requirements for firms to explain how acquisitions address SDGs. Originality/value: This study contributes to the application of stewardship theory and an integrated thinking framework to show the alignment of strategic acquisition decisions and sustainability strategy.