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Sustainability, citizenship and the environment 10 June 2013

Unilever CEO Paul Polman argues why businesses must be part of the solution to the world’s biggest problems

 

In the seventh event of Zamyn’s Cultural Forum 2013, a series of lectures and debates on the theme of global citizenship, Unilever’s chief executive Paul Polman took on crucial questions about sustainability and the responsibility of business in a keynote lecture and debate chaired by Faisal Islam, economics editor of Channel 4 News. 

Introducing the event, Mark Spelman, managing director of Accenture, raised the major challenges of sustainability and the importance of addressing them not just on a local and global level, but as governments, corporations and individuals. He pointed to the ‘difficult journey’ of the past four decades, but also outlined the economic, political, demographic and technological drivers shaping the future. ‘We need to ask: who wins and who loses? Where are the gains and where are the losses?’ 

Paul Polman began by admitting that economists don’t have all the answers and stressed the importance of working together. ‘The challenges are bigger than we can solve alone – this is not a Unilever story,’ he said. Describing himself as an optimist, he remarked that having a negative train of thought doesn’t lead to anything and that a positive attitude is ‘one of the main enablers’ to meet the challenges we have. It is easy to be sceptical, he said, but that’s ‘the lowest form of taking responsibility’.

Confronting criticisms of the legitimacy and effectiveness of the G8, he said that it should not be underestimated. While the G8 countries have no right to talk about the whole world, he said, they represent half of the global economy, and the G20 countries about 90 per cent. ‘It’s not right, but that is the reality, and through them you can build a critical mass.’

He painted a stark picture of the world’s food imbalance, but talked about working with the UK government to exploit the presidency of the G8 this year in putting nutrition, food security, trade, tax and transparency on the agenda. ‘It’s very important that we talk about everyone contributing their fair share to society,’ he said.

He went on to outline what he sees as his own company’s share: doubling turnover while at the same time reducing the company’s overall environmental impact and improving its social impact, using its scale as a force for good. ‘You cannot have a liberty to operate if you are not willing to take the responsibilities that come with it,’ he said. Citing Adam Smith, he pointed out that the origins of business were in serving the greater good and described how he considered his company’s brands to be causes for social good.

 

Buinesses cannot be bystanders – they have to be ‘solution providers’ 

 

Reflecting on the lessons of the 2008 financial crisis – which was above all a ‘crisis of morality’ – Paul Polman commented that while an enormous amount of people had been lifted out of poverty in the preceding years, all of a sudden it was revealed that this had been done in an unsustainable way, through ranking up debt and overconsumption. ‘We had developed a system that was very good for the few, but not for all. And a system in which too many people are excluded will ultimately be rejected.’

Through technology, the ‘failure of acting responsibly’ is visible much quicker than before and this is corroding people's trust in both governments and corporations. Telephones hacked, the manipulation of interest rates, horse meat being sold as something else – these things have always gone on, he said, but society is becoming more transparent. And he suggested that if it took only 17 days to bring down a 40-year-old regime in Egypt, a business could be brought down in ‘nanoseconds’. Describing digitsation as ‘a positive force’ in the empowerment of people, he said: ‘The telephone has become a more powerful weapon in this world than the atomic bomb.’

Corporations therefore have to become ‘solution providers’, he argued. ‘Businesses have to realise they cannot be bystanders in the system that gives them life in the first place.’ This means working with a range of partners, including NGOs that in the past have often been left protesting on the outside, as well as being less fixated on the end point and more focused on what is needed to get to the ‘tipping point’.

Referring specifically to the nutrition for growth summit on 8 June and his involvement in shaping the global development framework beyond 2015 (the target date for the Millennium Development Goals), Paul Polman explained how it is through coalitions that you get solutions, and that he is ‘advocating being part of the solution rather than advocating solutions’.

In his concluding remarks, he identified the three biggest challenges in creating a better future ‘not just for ourselves, but for many generations to come’: looking long-term, creating partnerships based on trust, and courageous leadership – as he put it, purpose, partnership and passion.

 

Everyone has to make transitions 

 

Opening the debate, Faisal Islam confessed to being infected by Paul Polman’s enthusiasm – ‘sucked into Planet Polman’ – and asked whether his strategy had gone down so well with his staff and shareholders.

‘I found it easy to get rid of shareholders,’ he replied, ‘but also to get new ones.’ Now 25 per cent of questions at shareholder meetings are about sustainability, he said, and the case is made that the company’s sustainability initiatives, such as zero-waste factories, save money by using resources effectively. He added: ‘The stronger your purpose, the less you have to worry about compensation.’ Mentioning that union members at Unilever had taken strike action over pensions, and that his aim had been to divert investment into youth employment schemes, he said that everyone had to make transitions.

In the discussion, Mark Spelman stressed the importance of ‘bringing your people along with you’ and building a company brand around sustainability. He also noted the crucial need, especially post-2008, to understand the ‘context’ in which you are working and your social responsibilities within that context, recognising the ‘differentials’ and talking to people about sustainability in a language they understand.

Questions from the audience raised the issue of biodiversity (palm oil plantations being a critical resource for Unilever), the need for more positive incentives for businesses (such as lower taxation on sustainable palm oil), energy demand, overconsumption and making consumers feel the sustainable is worth more to them. The discussion also tackled what happens to accountability when the interests of different sectors converge and everyone is working towards the same goal – who is scrutinising and keeping people in check?

Asked whether growth should be such a priority, Paul Polman replied: ‘You need growth to create jobs, but it has to be sustainable and more equitable growth – we call it inclusive.’ We don’t need to be ashamed of profits, he said, but the way we grow has to change and we have to decouple that growth from environmental impact. In response to recent criticism of the New Alliance for Food Security and Nutrition, he said: ‘We are there trying to find compromises to feed the world. Come join us with practical solutions.’

One audience member turned the spotlight on Faisal Islam as a representative of the media, another important ‘part of the machine’. Faisal Islam concluded the debate by admitting that the media don’t give enough attention to the sorts of questions raised during the discussion, but he challenged the audience by saying that people tweeting and talking about the issues on social media can make it happen.

Watch the video here

Image copyright Tate, photography by Kristina Gorlanova