Chief Executive Officer
but you galvanize it down the value chain with
the smaller companies.”
Talking to Paul Polman, CEO of the international consumer goods corporation Unilever, the immense challenge of transforming the world economy into a more sustainable model for the future seems, if not easy, then at least doable.
Get the right – and big – stakeholders together, agree on a course of action and use your size and influence to push for change. Not an easy task, but not rocket science either.
“If you want to avoid deforestation, for example, you get the big forestry and logging companies together, then add the big traders and the consumer goods companies that use the products. At the end of the day, you need 30-40 of those. If you want to drive transformational change, you don’t need a lot of companies to create critical mass, you just need the right companies and partnerships,” he says.
It might sound a bit too easy, but Polman has examples to support his point: the establishment of the Forest Stewardship Council (FSC) and its marine counterpart, the Marine Stewardship Council (MSC), as well as the Refrigerants, Naturally!
initiative for cleaner, more energy-efficient refrigerators.
It is not that the smaller companies do not matter – after all they make up most of the economy – but they do not define a market or business area. This is the role – and responsibility – of the large corporations.
“The corporations that in the future will win respect and high regard are the ones which do not abdicate that responsibility. A company like Unilever has around 200,000 suppliers that will all, down the value chain, be influenced by our choices.
So you create change with the big corporations, but you galvanize it down the value chain with the smaller companies,” says Polman.
Of course, it is easy to see just how you gather the 30-40 companies that can drive change if you, like Polman, are speaking from the position as CEO of a Fortune 500 company and can casually mention recent talks with President Joko Widodo of Indonesia, President Benigno Aquino of the Philippines and President Dilma Roussef of Brazil. However, there are a few resources to use too. The UN Global Compact is one.
“The real tipping point for any push for sustainability is getting the few bigger companies on board, and often they will be LEAD members of the Global Compact. This is one of the ways in which the Compact has started to catalyse action on
important topics. Another contribution is the way in which the Global Compact has mainstreamed sustainability by setting a global standard and created the exchange of good practice. The UN has demonstrated that it is one of the partners that can
help drive transformation,” he says.
In a world where – as Polman sees it – political governance is failing to address the pressing sustainability issues, corporate action is needed, and not just by keeping their own house in order.
“One of the greatest effects that corporations can have in the transformation of our economy is to ‘de-risk’ political action. If a coalition of 30-40 defining industry stakeholders asks for better regulation of, for example, logging, then you help to give
politicians the courage to do the right thing. It’s very difficult nowadays to be a politician. I’m a firm believer that it’s part of our responsibility at Unilever to de-risk the political process and give politicians more courage,” says Polman.
Transformation might seem easier than normal when speaking to Polman, but he does not underestimate the challenge or overplay the role of business.
“Business is involved and changing, and doing so at an increasing pace. It’s just that the speed at which these issues are happening outside is increasing faster,” he says. However, he remains optimistic. Not least because of the commitment of businesses channelled through the UN.
“When the UN Secretary-General called the Climate Summit in September 2014, more than 175 CEOs attended. I don’t think the UN has ever before had so many CEOs there. I believe that sent a very strong signal to world leaders: we want to make things happen faster and to do that we need to partner up. So let’s all behave like adults and start working together.”
SUSTAINABLE DEVELOPMENT GOALS
Paul Polman is impatient. We need to scale up the transformation when it comes to sustainability. However, to get to that stage, businesses and governments need a framework of goals and obligations to aim for. Polman sees that the Sustainable
Development Goals (SDGs) that will be adopted in September 2015 can act as that framework.
“The SDGs are obviously an enormous opportunity to bring about a more transformative change. In the absence of global governance, the SDGs are really a moral framework showing us how we should behave and frankly they are the best opportunity we currently have. We should absolutely give it our all to get the best we can get,” says Polman.