Can companies be “net positive” for society? Paul Polman, former Unilever CEO, thinks so.
Early in his tenure as Unilever’s CEO, Paul Polman started thinking about the implications of infinite capitalism on a finite planet. He watched the calendar flip earlier and earlier each year to Earth Overshoot Day, the day when humanity’s demand for ecological resources exceeded what the planet could regenerate that year.
In a wide-ranging conversation on February 23, 2002 – hosted by the Center for Business and the Environment at Yale (CBEY) and moderated by CBEY Fellow, Vincent Stanley, Patagonia’s Director of Philosophy– Polman was joined by sustainable business expert Andrew Winston (YSE ‘03) to discuss some of the ideas in their new book, Net Positive: How Courageous Companies Thrive by Giving More Than They Take. “It didn’t have to be this way,” Polman said. “There has been a lack of imagination in how we’ve designed systems and policies.”
As Unilever’s CEO from 2009-2019, Polman launched Unilever’s Sustainable Living Plan, with three main goals: 1) improving health and wellbeing for more than 1 billion people in Unilever’s supply chain; 2) cutting in half the environmental footprint of their manufacturing while growing their business; and 3) enhancing the livelihoods of millions of stakeholders, including smallholder and female farmers. During this same time, he significantly grew the company’s revenues and profits.
“We say simply that profits should come not from creating the world’s problems, but from solving them,” Polman and Winston write in the book’s introduction. If this sounds too good to be true – akin to the “win-win” mentality that many corporate social responsibility (CSR) programs espouse while putting a Band-Aid on the problems their central functions create – Polman is quick to add some nuance. It’s not that it’s easy. It requires introspection, careful design, and a shift from extractive to non-extractive thinking. It can’t just be about sustainability. “We need solutions that are restorative, regenerative, reparative,” he said.
Where does that leave business schools? Core management education needs to rethink the idea that the invisible hand will correct everything, Polman said. Schools need to integrate opportunities for greater imagination. How might we use the tools of capitalism – scale efficiencies, for example, or blended financing structures – to solve some of the world’s biggest problems? While business has huge resources to tackle these problems, he also cautioned against assuming that business alone can come up with the solutions. Collaborations across the private, public, and social sectors are also essential.
Polman cited the successful mobilization of private and public capital for COVID-19 relief as an example of what could be possible to tackle climate change or global poverty. “We’ve mobilized more capital for COVID relief than would be needed to meet the Sustainable Development Goals,” he said. By his and Winston’s calculations, 70-80% of the world’s big issues could be tackled today, including Scope 3 emissions (those in the supply chain that are beyond a company’s direct control). He noted that it takes courage to change business as usual. “How do you cultivate that courage in yourself and in your organization?” one student asked. Polman noted that the word courage comes from coeur, French for heart. To find the courage to change business systems, processes, and culture, “you need to nurture the core before trying to create progress.” This could include closely examining your own values and motivations, as well as digging deeper into your company’s history, mission, and purpose. It was revisiting Unilever’s early mission to improve hygiene in 1800s Britain, in fact, that helped Polman to effectively message the idea of the Sustainable Living Plan.
Another challenge to implementing a Net Positive ethos is the reality of consumerism. It’s hard for a company to say, “buy less from us.” But Polman believes that companies – well-practiced in the creation of consumer demand – can invest in creating demand for better, less-extractive products. He shared the example of Home Depot, the US’s largest seller of lightbulbs, who built an in-store education initiative that successfully influenced customers to purchase environmentally-preferable CFL bulbs, even though the upfront cost was higher than traditional lightbulbs.
Quoting Mahatma Gandhi and Victor Frankel, while exploring how to enhance environmental restoration and redefine shareholder returns, Polman’s talk offered students the opportunity to begin to think through a roadmap for changing business as usual.