Companies must step up on societal and climate challenges

30 Oct 2019

Companies must step up on societal and climate challenges

Ex Unilever CEO Paul Polman urges business chiefs to “re-invent capitalism”.

Companies taking a lead in addressing major world problems, notably societal inequality and climate change, will become the most successful of the 21st century.

That was the prediction from Paul Polman, formerly the CEO of Unilever, to over 100 business leaders of top UK and international companies attending the Odgers Berndtson Executive Search Chair and CEO dinner in London.

Time to re-invent capitalism

“Capitalism, which has been responsible for the growth and prosperity that has done so much to enhance our lives, is a damaged ideology and needs to be reinvented for the 21st century,” Mr. Polman said.

“Business needs to re-invent capitalism; we need to build a new model of inclusive and sustainable capitalism.”

As CEO of Unilever, Mr. Polman was one of the first global business leaders to show that multinational companies could successfully combine purpose with profit to drive sustainable behaviors across all aspects of business.

Now leading IMAGINE, which he describes as an “activist corporation”, Mr. Polman wants other top companies and CEOs to work collaboratively to address the United Nation’s Sustainable Development Goals.

Unlock $12 trillion growth

“Responsible business must step up,” Mr. Polman continued. “The commercial incentive for investing in the SDGs is compelling, with the opportunity to unlock economic growth worth at least $12 trillion a year and generate 380 million jobs. Companies with a strong sense of purpose are better able to grow, not only revenue and profits but also create additional value, such as customer loyalty, attracting top talent and developing new products and services.”

Business leaders also heard that ten years after the financial crisis, short-termism still too often prevails. Putting profit over long term prudence, and prioritizing short-termism is not, according to Mr. Polman, in itself sustainable.

Instead, businesses must focus on a “next decade of delivery” and become a force for good.

“Increasingly, leaders recognize the risks to their businesses associated with social inequality and climate change through changes in regulation and consumer behavior. These challenges require greater agility and authenticity in leadership teams.” Kester Scrope, CEO of Odgers Berndtson concluded at the dinner.

The latest edition of OBSERVE, Odgers Berndtson’s global magazine, focuses on sustainability and has an in-depth interview with Paul Polman.