08 Oct 2019
How Paul Polman wants to change the world - Part 1
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Paul Polman, former CEO, Unilever, talks to Odgers Berndtson’s OBSERVE about his continuing commitment to sustainability in the first part of this in-depth interview.
OBSERVE: You spent more than ten years as CEO of Unilever pushing the boundaries of sustainable business. Looking back what do you consider to be your most significant achievements?
Paul Polman: There are two things that come to mind. Firstly, driving a long-term, multi-stakeholder model is ultimately good for shareholders. During my time at Unilever, we demonstrated this with a 300% shareholder return over ten years and consistent top and bottom-line growth. This helped to showcase the attractiveness of our model and hopefully encouraged others to change as well. It’s about value and values.
And secondly, it’s clear that the development agenda is an increasingly attractive business proposition. In fact, it’s probably the biggest opportunity we have globally and badly needed if we want to live within our planetary boundaries now and for generations to come.
Indeed, companies that want to be around long-term must have a positive impact on society and the planet. Being less negative simply isn’t good enough anymore.
That’s why we developed the ‘Unilever Sustainable Living Plan’ so that the company could continue to play its part in helping to solve the challenges the world faces. It was a determined effort to decouple the company’s growth from its environmental footprint and help improve society’s wellbeing. A concerted effort to use its size and scale to drive transformational change.
And we made great strides. In helping to improve the health and well-being of over 650 million people; reducing Unilever’s environmental footprint throughout the value chain, and in enhancing livelihoods for millions of people.
Crucially, this work was strongly aligned with the U.N. Sustainable Development Goals, in a bold effort to maximise our impact.
OBSERVE: What can other organisations – both large and small – learn from the Unilever approach and who, in your opinion, is doing the most dynamic work on sustainability right now (other than Unilever of course)?
PP: The most important lesson is that being a responsible business is actually good for business.
In fact, I believe a multi-stakeholder model is the only model that will work long-term. The only model that people will accept.
Society is no longer willing to tolerate the idea that businesses are somehow run in the interests of shareholders, or a small group of billionaires.
Businesses thrive when they protect our natural and human capital, equal to financial capital, and serve all their stakeholders: citizens, employees, suppliers, partners and those who make up the extended value chain. When you make your business relevant to the needs of the communities and societies you serve, then everyone benefits, including shareholders.
Fortunately, we are seeing more and greater companies stepping up. A good example is Patagonia Inc, an activist company that has a deep heritage of giving back and an ingrained culture of working to protect the environment. Yvon Chouinard, founder and owner of Patagonia Inc, deserves huge credit for his leadership.
OBSERVE: If you were joining Unilever today – or another organisation of similar scale – what would be your immediate sustainability priorities for the initial two-year period?
PP: I think the key consideration for any business is to calibrate where you can make the biggest impact, which naturally will vary according to your sector and operational footprint.
Every company can leverage their supply chain, partners and customers to mobilise action that delivers positive change at scale, whether it be more sustainable practices, enforcing human rights or helping to tackle corruption.
However, I passionately believe that the most burning issue we all need to focus on is climate change. If we do not make tangible progress on this issue, then I’m afraid the future of civilisation and much of the natural world is at risk. We are truly facing an existential crisis the likes of which the world has never seen before. We must ensure that we collectively stay below 1.5 degrees warming, which requires us to be net-zero by 2050 according to the science.
We also need to make sure our growth is more equitable, and this requires us to establish a new social contract, which ensures we leave no one behind.
Society and our economies can be much more successful if we promote far greater diversity and inclusivity.
In the absence of fully-functioning political systems, I also believe the private sector needs to step up, both individually and collectively. Bold and courageous business leaders must work together in a deep and purposeful partnership to move at scale and speed, so we can reach the tipping points needed.
Read the next part of this in-depth interview with Paul Polman where he lays out his plans for new venture IMAGINE and how he will work with heroic CEOs able to drive lasting change.