Net positive, how courageous companies thrive by giving more than they take by Paul Polman and Andrew Winston, Harvard Business Review Press.
Reading Paul Polman’s Net Positive in the context of the recent COP 26 conference could leave readers with a sinking feeling. Polman’s book – co-authored with sustainability writer and strategist Andrew Winston – is an ambitious clarion call for radical change on climate, sustainability and social justice, set against an underwhelming response in Glasgow from those with the influence and power to do something about it.
Nonetheless, it is an important book given Polman’s own influence and pedigree from his game-changing tenure as CEO of Unilever and one that deserves attention.
The core idea of Net Positive is that reducing climate impacts to zero isn’t a sufficient end goal but merely a crossing point on a journey to making a better world. In this vision, a business doesn’t just do no harm, it also acts as a driving force for good, making communities and customers healthier.
You don’t just collect your own garbage in other words – you also clean up the mess others have made not just because is it the right thing to do, but because humanity now requires it.
This is not a utopian dream, he maintains, but a rather a model in which enlightened businesses can make healthy long-term sustainable profits by earning the trust of citizens and enriching their lives and the planet.
Polman uses language more usually deployed by the radical left. He talks of ‘bending the curve of capitalism’ and despairs of the philosophy and reckless practices of corporates that pursue narrow shareholder value principles that were once seen as legitimate definitions of the purpose of a business. Milton Friedman, the champion of neo-liberalism, is dead, he declares, saying we must kill the old philosophy if we want to survive and thrive.
Yet while spending some time emphasising the dangers of the current course and the urgency and which it must be corrected, this is essentially an optimistic book that it illustrates the choices available and envisages a world that could be cleaner, healthier and fairer.
Polman’s legitimacy through his own corporate track record adds potency to this work.
As CEO of Unilever in the decade to 2019, he delivered a 290% shareholder return for Unilever, reversing a decline in sales to grow turnover from $38 billion to $60 billion. More remarkably though, his Sustainable Living Plan also simultaneously delivered on its aim to halve the corporation’s environmental impact and treble its social impact.
On one of first days in office, he famously told the markets that he was abandoning quarterly reporting. Free from short-term pressures, he set about a radical purpose-driven approach that won plaudits as well as profits. The Dove brand became synonymous with empowering women, for example while Domestos was credited with driving better sanitary hygiene in developing countries.
Polman successfully fought off a hostile $143 billion takeover bid from Kraft Heinz in 2017 that would have enriched shareholders with an 18 per cent market premium but which he says would have stolen its soul, in a passage in his book he calls ‘Why Mayo (Hellmann’s) beat Ketchup’.
The dangers associated with taking the high road, however, are clear here too. A couple of year later he failed to convince UK-based shareholders to eliminate London as a joint HQ. Polman’s thinking was that a Rotterdam-only centre would protect it from further hostile bids. He bowed out shortly after and while he is widely regarded as a hugely influential and visionary leader on social and environmental issues, he says today he regrets not achieving more in this area during his Unilever tenure.
His mission continues. Today he is a driving force behind a group called Imagine, an initiative that aims to mobilise action on environmental and humanitarian issues through collaboration. Imagine’s purpose is to be a powerful ecosystem of decision-makers and powerbrokers linking businesses with governments, international institutions and NGOs with the aim of implementing net positive goals.
Polman was the first private sector individual to sit on the United Nations team on Sustainable Development Goals (SDG) in 2013. Representatives from national governments and the UN did not trust business up to that point but the Dutch and UK Governments pushed Polman’s candidature because they trusted him and argued that the world was unlikely to achieve the SDGs without business getting involved.
Purpose is a crucial element in the net positive philosophy, he says. Making money is not the key end in itself but sustainable profits ultimately flow from a healthy purpose-driven organisation.
As the boss of Unilever, he felt the hand of Lord Lever, the socially conscious founder who built houses for his workers at Port Sunlight before opening his factory in the late 19th century and paid wages to wives while their husbands went off to fight in the First World War.
As he explains in the book, there is no future for companies who do not get this but he agrees that an alarming number still don’t. Many companies are not willing to take responsibility for Scope 3 (indirect emissions linked with their operations) on climate change, saying at best that they will take responsibility for their own carbon emissions but duck and dive by outsourcing their supply chains and their responsibilities alongside that, he notes.
Climate change represents an existential threat and progress on issues like carbon reduction is painfully slow. The political process is gridlocked, multilateralism hasn’t worked. All the more reason why businesses need to step up.
Yet he remains optimistic. Tipping points can be achieved with around 20 per cent involvement of businesses and many are moving in the right direction. There’s an increasing realisation by corporates that sustainable practices ultimately drive profits. Markets get it too. Environmental and socially orientated funds are outperforming peers in many areas, he says, and this enlightened self-interest is significant, he says.
Technological progress is helping too. The authors note that 90 per cent of the technology required to solve the world’s problems already exists and that progress in areas such as driving down the cost of clean energy has been much quicker than experts had earlier predicted. Consumers and social activists are driving change on many issues.
Polman and Winston don’t confine themselves to climate change and sustainability. Gender balance, rights for minorities, human rights, and a living wage, amongst other goals, form part of the net positive agenda too. Polman’s socially conscious Dutch upbringing and his concern for fairness and equality shine through. Empathy, compassion, systems-thinking and collective action are vital ingredients in this vision of a better world.
In this thoughtful and agenda setting book Polman and Winston have provided a great service in highlighting what needs to be done and in so doing have upped the ante.
As its sub-title states, implementing the ideas underpinning Net Positive will require courage on the part of business but they too can reap rewards if they show it.