Unilever unveiled its 2020 sustainability plan today, and no one can accuse the company of playing small ball.

The global consumer products giant ($57 billion in revenues in 2009) intends to improve the health of 1 billion people, to buy 100% of its agricultural raw materials from sustainable sources, and to reduce the environmental impact of everything it sells by one-half, while doubling its revenues.

Those are big hairy audacious goals (to borrow a phrase from Jim Collins), befitting a company that touches 2 billion consumers a day. Unilever’s brands include Lipton, Dove, All, Hellman’s and Ben & Jerry’s.

The biggest idea here–and the one that will probably prove hardest to achieve–is that a company can grow its sales without growing its environmental footprint. As Dave Lewis, president of Unilever Americas, put it:  “We cannot choose between growth and sustainability. We have to do both.”

This is what U.S. consumer-products giant Procter & Gamble implicitly said it could not do when it announced its sustainability goals back in September. (See P&G: A bold green vision but…) Unilever is also hedging its bets some–it is promising a 50% reduction “per consumer use”–and it acknowledges that it can only grow sustainably by changing consumer behavior. That’s no small matter and one that is largely beyond its control.

Still, Unilever’s Sustainable Living Plan, as it’s called, breaks new ground for a number of reasons.

It is comprehensive, setting more than 50 social, economic and environmental targets.

It is rigorous; the company says its has measured the carbon, water and waste footprints of 1,600 products, representing 70% of its volume.

It’s far-reaching, taking into account the full lifecyle impact of its product–from “seed to disposal,” as one executive put it.

It builds on an impressive past history when it comes to sustainability.

And it goes well beyond green, including efforts to improve nutrition–

By 2020 we will double the proportion of our portfolio that meets the highest nutritional standards, based on globally recognized dietary guidelines.

and global health–

By 2020, we will help more than a billion people to improve their hygiene habits and we will bring safe drinking water to 500 million people.

and poverty–

Our goal is to link 500.000 smallholder farmers into our supply network. We will help to improve their agricultural practices and thus enable them to supply into global markets at competitive prices. By doing so we will improve the quality of their livelihoods.

The Unilever plan was announced with fanfare in London, New York, Rotterdam and New Delhi by CEO Paul Polman, other top company execs and outsiders who had been been briefed on the effort.  (In New York, they included Columbia’s Jeffrey Sachs and author Dan Esty.) Early reaction has been favorable. Writing in The Guardian, Jonathan Porritt, the founder and director of a British corporate responsibility organization called Forum for the Future, said:

Is this a game-changer for Unilever? Absolutely. Is it the best Plan out there for big global companies? I believe it is.

I spoke with Dave Lewis, who runs Unilever’s U.S. operations, after the New York announcement. He told me he was feeling just fine even though, at the news event, he drank brownish water that was pulled out of the Hudson River and treated with a Unilever water-purification product called Pureit. Pureit has been in development for more than a decade and is now being sold in India, he told me, and the company now wants to get the product into the hands of half a billion customers. “It’s a bit of a leapfrog innovation,” Lewis said. In the case of Pureit, the alignment between the company’s environmental and business goals is near-perfect–the more water purification it sells, the more the health and well-being of its consumers improves.

In other businesses, though, there are unavoidable tensions between Unilever’s business and environmental aims. Consider the problem of the hot shower. Yes, it’s a problem for a company that wants to sell lots of soap and shampoo and still lower its footprint. No matter how much Unilever shrinks packaging or improves the efficiency of its factories, the big impact of its soaps and shampoos come when people use them in hot showers–which consume lots of water and energy. Unilever says:

We estimate that 95% of the greenhouse gas emissions associated with soaps, shower gels and shampoos occur when the products are used –and in particular, when the consumer takes a shower.

So to reduce the impact of those products, the company will need  help for its customers. To save water and energy, Unilever says that “We aim to reach and persuade 400 million consumers to change their shower habits by 2020″ and “if we can persuade 20 million people to cut a minute from their shower time, it would save emissions of 1 million metric tonnes of CO2 a year – equivalent to taking 110 000 cars off the road.” The company plans to launch a campaign called “Turn off the tap” in the US  next year to which I say…well, good luck with that.

The company also can’t say how it will reach some of its goals, Lewis told me, but that doesn’t trouble him. He’s counting on motivated employees to help, citing as an example a factory worker in Britain who, on his own, devised a way for the company to reduce the paper use in its teabags. “The engagement of our employees has shot up as we have worked our way through this plan,” he said.

Unilever’s track record on sustainability also gives the company confidence that it can meet its goals. Particularly around supply chain issues, Unilever has been a leader–helping to form the Marine Stewardship Council to certify fisheries back in the late 1990s, making early commitments around sustainable palm oil, promising several years ago to source all of its Lipton tea bags from farms certified by the Rainforest Alliance. It sold concentrated detergent packages before anyone else (except Method.) It’s pioneered efforts to sell products to people at the base of the economic pyramid.

This is why other global consumer products companies are, at least for now, following Unilever.

I’ve joined the laundry-detergent revolution. Well, revolution may be stretching it  — but changes unfolding (sorry!) in laundry rooms across America show how innovation can move us closer to a sustainable economy.

The revolution metaphor is useful because it’s a reminder that real innovation is more likely to be driven by upstarts, insurgents and rebels–like Method, one of my favorite companies–than by powerful incumbents who want to preserve the status quo.

Take a look:

Over the last several years, big, wasteful jugs of  laundry detergent like this one from Procter & Gamble’s Tide  have all but disappeared from grocery store shelves. These jugs were good for marketing people who plastered messages on the package but they weren’t good for anyone else.

Today, the new normal is concentrated 2x (meaning half the liquid in every load) detergents like Unilever’s Small and Mighty All, which use less packaging and water, saving money on shipping costs and waste. Tide sells lots of 2x as well.. The 2x packages are convenient, easy to store and pour.

But the greenest, smartest and most innovative detergent is an 8x concentrate from Method, which uses less water in a smaller package and should save consumers money. This is good for everyone except news P&G or Unilever, which have profited from the  overdosing of laundry, as we’ll explain.

Method is a privately-held company that was started in 2000 by Adam Lowry, a former climate scientist, and his friend Eric Ryan in their San Francisco bachelor pad. It has grown into a company with more than $100 million in revenues, and an impact bigger than its size. Method introduced the first concentrated laundry detergent — a 3x concentrate — to the mass market back in 2004 through Target.  A year or so later, amidst much fanfare, Unilever and Wal-Mart followed with a 2x Small and Mighty All. By most accounts P&G, the king of the detergent shelf with such brands as Tide, Gain and Era, came along  later, under pressure from Wal-Mart.

Adam, who is 35, spoke about Method, innovation and green marketing earlier this month at FORTUNE’s Brainstorm Green conference. We caught up the other day by phone to talk about how and why Method has become a sustainability leader.

There’s a tension, Adam argues, between size and innovation. “When you think about companies that dominate our economy, these are not organizations that welcome change and they are not usually nimble organizations,” he says. “The general model, for big companies, is to design something, build a patent fortress around it, and then extract as much profit as you can until the product runs its course.”

“Market leaders thrive when markets are static,” he adds.

Pushing towards sustainable models requires just the opposite–persistent innovation. “We need to be willing to take what makes us money today and throw it out the window and replace it with something that’s better, greener and a lot less certain,” he says.

This restless desire to improve led to the path-breaking 8x product, which packs enough detergent to do 50 loads of wash into a 20 fluid oz bottle that sells for $15 at Method’s website, at Amazon or at major retailers including Costco, Target and Wal-Mart. There’s a $2 off coupon, as I write this, at the Method site.)

Comparing Method’s price to a conventional detergent is tricky because, Adam argues, the conventional guys encourage waste.

He calls its laundry’s dirty secret:

The laundry jug is the SUV of consumer products–it’s antiquated, wasteful, and costly, but supremely profitable for its makers.

Why? Because caps on conventional containers of detergent are often twice the size of the recommended dose and the “fill to here” lines are hard to see. Method did a study that found that more than half of consumers either fill the cap full or eyeball the amount needed. Using too much detergent is  bad for clothes which get worn out more quickly,  bad for washers that get gunked up, bad for the environment because more laundry soap flows into waterways and bad for the wallets of customers who buy more than they need.

It’s good only for the manufacturers who sell between $3-billion and $4-billion of detergent a year. As Adam writes:

If a third of that is pure waste, one could assume that detergent manufacturers make $1 billion a year on consumers overusing laundry detergent. It’s clearly not that the technology to make caps less wasteful and easier to use has eluded detergent manufacturers all these years. They have a billion little reasons not to find a solution.

By contrast, Method’s 8x product works with small pump that prevents overdosing by delivering a little squirt into the washer. I’ve been using it for a couple of months, and it’s easier and more fun that pouring blue liquid into a cap. You can learn a lot more about the product here.

Interestingly, while the website touts the environmental benefits of  8x detergent (“our product uses drastically less water, 36% less plastic and requires 33% less energy and oil to produce than widely available 2x detergent”), Method is as  well known for its stylish designs as for its green cred. “I think it’s a mistake to market yourself as green,” Adam says, in part because eventually all products will have to be green.

While Method is still a small company, it’s gotten the attention of the big guys. Clorox, which has a GreenWorks laundry product, has accused Method of infringing on the image of a yellow daisy that both companies use on their packages. Method’s having some fun with the accusation, setting up a website called votedaisy.com that asks consumers to vote on who owns the daisy–Method, Clorox or Mother Nature. You can watch Adam on video here.

When I called P&G to ask whether they were developing an 8x detergent product, Len Sauers, the firm’s amiable head of sustainability, told me the company doesn’t talk about future products. He did say that P&G sells a laundry detergent in Europe called Ariel Excel Gel which uses cold water is compacted more than any laundry soap sold in the U.S. “As a sustainability guy, I’m a big fan of compaction,” Len said. But as the industry leader, he noted, P&G needs to make cure its mass customer base is ready for change. “We target mainstream consumers, those who want to do the right thing and don’t want tradeoffs,” he told me. Of course, as best as I can tell, there aren’t any tradeoffs with the 8x product, though it may be a hard sell to consumers who don’t expect to pay $15 for something that comes in a small package.

Adam, by the way, has nothing against P&G. “P&G is an amazing company,” he says. “Every year they grow their earnings. But they follow a certain formula. And we want to challenge that formula.” Spoken like a true revolutionary.