Paul Polman: Courage and collaboration will help business accomplish Mission Possible
EXCLUSIVE: This year's Mission Possible: 2019 report has just landed, and edie is offering a sneak preview by way of the rousing report foreword penned by revered sustainability leader and ex-Unilever chief executive Paul Polman, in full.
The theme of edie’s purpose-driven campaign and report perfectly captures the crux of what we have long-suspected: that creating a more sustainable future is still ‘Mission Possible’ and we must now turn our ambitions into actions to drive transformative progress.
Not least as there are many challenges we need to overcome: runaway climate change; deforestation; and plastics in our seas, for example, all prove we are pushing at the limits of our planetary boundaries. Indeed, the recent IPCC report points out that we are now less than 12 years away from environmental disaster, unless we drastically change how we live. And if we do not act now, it is guaranteed that we will see more of the devastating effects of climate change, as well as rising poverty and inequality.
But we shouldn’t despair, as we already have a roadmap to plot our recovery: the UN Sustainable Development Goals (SDGs). We also have the means to achieve these Goals – as noted by the various contributors to this report: greater energy efficiency and use of renewables; more sustainable land use and food systems; smarter infrastructure and city planning; deployment of circular, regenerative business models; and more investment is education, healthcare and diversity.
This is an agenda worth pursuing as it promises a great return, with the potential to unlock economic opportunities worth at least $12trn a year and to create at least 380 million incremental jobs at a time when we need them most. As BlackRock chairman Larry Fink stresses in his 2019 letter to business leaders: “Purpose is not the sole pursuit of profits but the animating force for achieving them. Profits are in no way inconsistent with purpose.” I too strongly believe that profits and purpose are inextricably linked, as has been demonstrated by Unilever – showing a nearly 300% shareholder return during my 10-year tenure.
Yet, even for those of us that already fully understand and support this way of doing business, we must acknowledge that we are clearly not acting fast enough. The World Meteorological Organisation, for example, recently warned that the physical and financial impacts of global warming are accelerating. And the International Energy Agency reported a surge in CO2 in 2018. So, what’s holding us back?
Moving the dial
I believe there are two essential ingredients that can move the dial and get us back on track: more courageous business leadership; and more collaboration to move at scale and speed.
Leadership from the business community is absolutely key. Especially as our global governance system is under significant strain, with many governments currently retrenching and questioning the benefits of multilateral cooperation and globalisation. Business needs to step-in and de-risk the process for politicians by creating virtuous ‘ambition loops’ which encourage bolder action and more stretching targets. Bold and courageous leaders like the so-called ‘zeronaughts’ – who are committing their businesses to get to ‘net-zero emissions’ way ahead of their peers and of current policies – are a great example. BT’s Gabrielle Ginér and Carlsberg’s Simon Boas-Hoffmeyer explain their approaches within the Energy section of this report – these entrepreneurs are demonstrating the art of the possible and driving massive innovation through their leadership.
This kind of leadership is especially crucial now as we enter a crucial two-year period for climate action; in the lead up to the UN Secretary General’s Summit in September and the COP26 event in 2020, where entire countries must raise both their ambition levels and emission commitments. These countries will not do so without an unequivocal message from business that they have our full backing. Business must lead by example and take full responsibility for helping to drive systemic change, not least as it’s in our own self-interest – recent studies point out that companies that integrate climate-change into strategic planning see an 18% higher return on investment than those that do not.
Purpose over profit
We also need to work in far greater partnership. Individual contributions, I’m afraid, are simply not enough. We need to aggregate the aggregators. Take, for example, the 870 global companies – worth almost $17trn in market capital – that have made bold climate commitments via the We Mean Business platform. Groups like these are shaping markets and sending a powerful signal to politicians that they are ready for bolder policy to put our economy on track for ‘net-zero’ by 2050.
We also need to win greater support from the financial community. Recognising right now primarily the risks, investors are starting to move. Environmental and social governance (ESG) assets under management have grown to $22trn; $34trn are now asking for a price on carbon; and $82trn of money under management have signed up to the Principles for Responsible Investment. In fact, the financial community really is in pole position to help us live within our planetary boundaries – a key enabler here being the move to more open and transparent reporting and the building in of externalities. If you ‘measure what you treasure’, you automatically drive greater accountability for the system changes needed to shift, for example, to a zero-carbon economy.
The World Benchmarking Alliance is a great example of the kinds of initiatives we need. This aims to make it easier for investors to direct capital to sustainable businesses, by developing free public benchmarks comparing companies’ performance on the SDGs. But the financial markets can go much further and much faster – especially given their impact on all sectors of the economy. It’s critical that we ‘shift the trillions’ to invest in sustainable and equitable growth.
By putting itself to the service of others; by putting purpose above profit; and by holding up shared responsibility and prosperity as the kitemarks of success, business can and will be the catalyst for the transformative progress that the world so desperately needs.
Paul Polman is Chair of the International Chamber of Commerce (ICC), The B Team and Vice-Chair of the UN Global Compact initiative. As Chief Executive of Unilever (2009-2018), he demonstrated that a long-term, multi-stakeholder model – captured in the Unilever Sustainable Living Plan – goes hand-in-hand with good financial performance. Under Polman’s leadership, Unilever was one of the best-performing companies in its sector, delivering 10 years of consistent top- and bottom-line growth. Polman was announced as the winner of edie’s Lifetime Achievement accolade at the Sustainability Leaders Award.