CEO Paul Polman's strategy for the company. More than most other companies. Unilever has embedded its sustain-ability program within its strategic, operational, and human resource management: the plan Is overseen by the board and incentive bonuses are linked m I1s quantitative targets for improvements in emissions, waste reduction. and energy and water conservation. While Pelman emphasizes that Unilever's commit-ment to sustainability is because it Is -the right thing to do· he is also clear that the primary m otivation is the fact that the Sustainable Living Plan is in the long-term interests of Unilever itself. In an interview with McKinsey and Company, Polman noted that the bene-fits to Unilever included improved access to raw mate-rials, greater employee comm,tment a stronger drrve toward innovation throughout the company, greatly increased numbers of applications for Jobs at Unilever, and improvement In efficiency in Unilever plants and throughout its supply chain. Shareholders appear to have benelined as w ell: in the live years following the launch of the Sustainable Living Plan, Unilever's share price rose by 40%, well ahead of rivals Procter & Gamble and Nesile. However, when Polman announced. en route for the January 2015 Davos meetings, that he planned to -use the size and scale of Unilever·to lobby global lead-ers for a binding agreement o n climate change and poverty eradication, some wondered w hether he was pumng g lobal interests ahead of Urnlever·s-especially given Unilever's disappointing sales performance dur-ing 2014. Sources: McK,nsey & Company. ·comm1tt1ng to susta1nab1l1ty An interview w ith Urnlever's Paul Pelman." hnp//www mckinsey.com/vldeos/video ?v1d= 3564008886001 &plynd= 239984925500 I &Height=270&Width=480, accessed July 20. 201 S, ·unilever: In search of the good bus1nes'!>: Econom,sr, August 9, 2014. value available to me firm. The simple idea that an option-the choice of whether to do something o r not-has value has important imp licatio ns for ho w we value firms. In recent years, the principles of optio n pricing have been extended fro m valuing financial securities to valuing investment projects and companies. The resulting field of real option analysis has e merged as o ne of the most important developme nts in finan-cial theory over the past decade , with far-reaching implications for strategy ana lysis. The technical details of valuing real options are complex. Ho wever, the unde rlying principles are intuitive. Let me o udir1e the basic ideas of real options theory and what they mean for strategy analysis.