An advocate for sustainable capitalism explains how it’s done
Positive Web. By Paul Polman and Andrew Winston. Harvard Business Review Press; 352 pages; $30 and £22
WHAT IS THE company purpose? For some, the answer is simple: make as much money for shareholders as the law allows. But many companies today take a much broader view. They argue that business should serve employees, consumers and society in general, and that profit should not be pursued at the expense of the environment or social justice.
One key figure in this movement, known as sustainable capitalism, is Paul Polman, former chief executive of Unilever, the consumer goods giant. In that role he unveiled Unilever’s sustainable living plan, which pledged to cut its environmental footprint by half and help a billion people improve their health. Together with Andrew Winston, a writer, he has produced a book about his method, defining “net positive”, the phrase of the title, as “a business that improves the well-being of all those it affects and at all levels “.
Big statements like this draw criticism from both the right and the left. The Tories disparage the philosophy as “crony capitalism”, which spends shareholders’ money on moves that make executives feel good about themselves; Left-wing critics see it as a smokescreen that allows businesses to keep making profits by deceiving consumers. It doesn’t help that advocates of sustainable capitalism are too fond of acronyms and jargon. This book is an exception, containing phrases like “the company’s leverage DNA to better serve stakeholders.”
But he distinguishes himself by detailing the many practical steps Unilever took while Mr Polman was in charge, as well as the problems the company faced and the progress it continues to make. to do. For example, it achieved the goal of paying its direct workers a living wage by 2020, and then began requiring all suppliers to do the same by 2030. It was too the goal of ensuring that all agricultural contributions came from sustainable sources by 2020 was difficult, especially because it was difficult to define what “sustainable” meant in this context.
Mr. Polman says that hard targets force managers to find innovative solutions. Lack of ambition is a fault, not to mention. “If a goal doesn’t make you uncomfortable,” he advises, “it’s not aggressive enough.” Aiming to get only 60% of energy from renewable sources, for example, means that 40% will include climate-changing gases. And there were successes. Unilever has managed to reduce its carbon emissions by 65% in manufacturing, while sending zero waste to landfill. Mr Polman says these programs have helped the company save €733m ($851m) in energy costs since 2008. It has also achieved gender equality in management.
All this meant that the company’s financial performance was strong enough to fight off a takeover bid from Kraft Heinz in 2017. It survived, in Mr Polman’s view, because of its commitment to stability, not in spite of. Take Lifebuoy soap, one of its oldest brands. A campaign focusing on the health benefits of hand washing in developing countries boosted sales. But a study also showed that the scheme reduced cases of diarrhoea, acute respiratory infections and eye infections among participating Indian families.
One might think that Unilever was motivated by profit. But no one who reads this book can doubt the secret of Mr. Polman’s belief that capitalism and good works can be combined. ■