“We are at this crucial juncture where we really have to decide if we're going to live together in harmony and in sync with planet Earth or if we become one of the statistics of extinguished species. I know which side of history I want to be on.”
Paul Polman is one of the world’s most prominent--and successful--business leaders. He’s also on a mission to save humanity, and he’s doing so by harnessing the power of organizations around the world to drive systemic change. The team at Purpose 360 Podcast was honored to welcome Paul to the show recently to celebrate the launch of his book, Net Positive: How Courageous Companies Thrive by Giving More Than They Take, coauthored with sustainability leader Andrew Winston. Available now, Net Positive should be required reading for any practitioner, consultant, or student curious about what it means to build, operate, or lead a “net positive” company.
Of course, Paul brings much more to the conversation than insights from his new book. Hailed as a leader of the stakeholder capitalism movement, Paul served as CEO of Unilever from 2009 to 2019 and now acts as co-founder of the B-Corp IMAGINE. At Unilever, Paul turned around a company in decline by developing the Unilever Sustainable Living Plan and essentially proving that companies of any size or sector can be more successful by serving their stakeholders--from employees to the Earth itself.
Here are some of our favorite insights from the show. Listen to the full episode here.
1. “I’ve always believed it’s important to do the harder rights than the easier wrongs.”
Annual returns are not what’s at stake here--it’s our survival as a planet (with that said, you can and should operate a fiscally responsible company while saving humanity--more on that later). According to Paul, “you should fight for some of the basic values that make humanity function, values like dignity and respect, equity, compassion, and any time these values get violated or attacked, you have to speak up because you’re talking about the future of humanity.”
2. “We’re stealing from future generations.”
Earth Overshoot Day, which this year fell on July 29, marks the date when humanity’s demand for ecological resources exceeds what our Earth can regenerate in that year. The earlier in the year this day happens, the more dire the outlook for humanity--and the more we take from our children. “We’ve lost 68% of our mammals and reptiles over the past four decades. We’ve cut half of the world’s rainforest. The issues of climate change are increasingly transparent, and the system [leaves] too many people behind.”
3. “It’s not good enough any more to [just] do CSR, or corporate social responsibility.”
Net positive companies are those that are designed to give more than they take. Think of modular flooring manufacturer Interface, which produces carbon-capturing tiles that actually remove carbon from the atmosphere. “It means actually moving first and foremost to having no negative impacts, which many people call net zero, but as we are passing these planetary boundaries, we actually need to think about restorative, reparative, regenerative, and this is what we call net positive.” Consumers today are increasingly educated on topics of corporate responsibility and sustainability, and they expect more than just philanthropy and round-up at the register fundraising campaigns from companies. “How can you actually show that you have a positive impact in this world by being around? If you can't really show that, why should the citizens of this world keep you around in the first place?”
4. “You cannot get a systems transformation or a business change transformation if you don't have the leadership transformation.”
CEOs must lead the charge--and they’d be wise to do so, because “this is an enormous economic opportunity.” It’s also important to remember that leaders come at all levels of a company. A leader is someone who has a vision and seeks to execute against it, bringing others along for the journey. “It starts with yourself to become this courageous, purpose-driven leader before you can actually drive the broader changes in your company and the broader system.”
5. “If you break it, you own it.”
Being net positive is about “owning” both negative and positive impacts. Every business takes resources from somewhere--whether that’s from the Earth or from society. Net positive businesses recognize and tally their extractive efforts and make a plan to replace or regenerate them in some way. Paul calls this “the ownership of all your impacts and consequences, which is where [being net positive] starts.” Luckily, the path to net positive is made easier by collaboration. Companies can make breathtaking, innovative commitments to help solve problems, but ultimately, “we can only get there if we really drive these broader system changes together.”
6. “I went back to the origins of Lever, who was quite a remarkable man at the end of the 19th century when he created [Unilever].”
Paul joined Unilever at the height of the global financial crisis, and on the heels of 10 years of decline. Something needed to change, and Paul started by probing the origins of the company “in Victorian Britain, where one out of two babies didn't make it either past year one, where the issues of hygiene were enormous. Lever had the simple objective, to make hygiene commonplace. He put a business philosophy behind that that he called shared prosperity. He built the housing for the workers before the factory was fully running. He introduced pensions, guaranteed wages during World War I.” Ultimately, Lever “assumed responsibility in that time period for his total impact.” That led Paul and his team to elevate Unilever’s original 'purpose' to “making sustainable living commonplace.”
7. “Suppliers were actually seeing the lift up in their own purpose amongst their employees as well. They felt part of something bigger than just a narrowly defined shareholder value and that was tremendously stimulating.”
Unilever’s Sustainable Living Plan journey started with taking ownership of impacts. “Since we carry the responsibility of the ultimate product that we sell to the citizens of the world and we have this contract of trust, of transparency, we need to be sure that all of the elements that go into producing these products live up to the highest standards.” That meant engaging the supply chain--which, for a company the size of Unilever, is massive. “Unilever had 90,000 to 120,0000 suppliers when we started, but we took the top 1,000, which was about 75% of all what we were buying, and we helped them. We put training in place and development and we said to these suppliers, ‘Why don't you live up to the same commitments and standards that we set? You become stronger partners with us.’”
8. “You have to set targets that might make you feel uncomfortable because you just don't have all the answers yet, but these are targets that you know are needed.”
Remember: what’s at stake is the future of humanity. Too often today, companies state ESG goals which they know are safe and achievable. “That's really at this moment of where we are with humanity starts to become irresponsible behavior. Frankly, with the transparency that is out there now, I think these companies are increasingly being called out when there is a gap between the say and do.” Audacious goals are transparent and invite others to partner in achieving them, often to the benefit of all parties: "the driver of trust is transparency, and trust drives prosperity.”
9. “So many companies probably have wonderful value statements that make you cry, but to make it come alive is where they fall short and then it creates a rotten culture.”
Unilever’s success is due, in large part, to the culture Paul helped foster. During his tenure as CEO, 70,000 employees participated in trainings to define their own personal purpose and discover how it aligned with the organization and their role. The result? “It's an environment where each and every person can develop to their fullest potential, where each and every person is respected to their fullest irrespective of race or gender or culture, where decision making is delegated down to the levels of where the decisions are, not where the hierarchy centers its powers, where people are aligned around a common goal.”
10. “We need to bring humanity back to business.”
Being a net positive leader takes courage. Declining to report short term earnings and results takes courage. Redesigning entire industries takes courage. “We like the word courage because it comes from the French word coeur, which is heart. We cannot just distill [business] into spreadsheets and simple numbers as Milton Friedman was trying to do. What we have seen, especially during COVID, is that the leaders that showed a high level of empathy, humanity, humility, that were leaders that were purpose-driven understood the power of partnership. We're systemic thinkers and look at the world a little bit more holistically, think about things multigenerationally.”
Finally, yes, you can make a profit while undergoing the transformative change that an organization like Unilever did. During Paul’s tenure at Unilever, the company delivered a total shareholder return of 290%. By 2019, Unilever’s Sustainable Living Brands were growing 69% faster than the rest of the portfolio and providing 75% of total turnover. “That’s not surprising,” said Paul. “ They are better connected to society, better understand the needs out there, and probably the people running [the brands] are a little bit more responsible.”
To learn more about what it takes to be a net positive organization, visit Paul’s website here. Listen to further insights from Paul and nearly 100 other purpose leaders on Purpose 360 Podcast.