BUSINESS
05/09/2016 01:15 pm ET Updated Dec 06, 2017

Doing Well By Doing Good: An Interview with Paul Polman, CEO of Unilever

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Changing the world is not a question of age, but mindset. Paul has been a leader in the corporate world for 35 years, and has used his background to build a new movement in this space...one that involves a commitment to social good.

A recent report stated 62 percent of surveyed millennials "only want to work for an organization that delivers social and environmental impacts." In an interview with the Guardian, you mentioned millennials "...don't want to work for banks." Can you tell us more about the importance of purpose in the corporate world?

Increasingly millennials want to work for companies where they can make a difference, positively influence others and ultimately leave this world in a better place than they found it. That's a life with purpose.

125 years ago Unilever's founder, Lord William Lever built a business around the sale and distribution of soap that not only proved to be profitable and sustainable, but which also played a pivotal role in transforming the health of Victorian Britain's poor. Since then, Unilever has always strongly believed that the purpose of business is not to take from, but to serve society.

Over the last few years we have embarked on the most exciting journey with the Unilever Sustainable Living Plan (USLP) which decouples our growth from environmental footprint and increases our overall social impact. What makes it unique is that we take responsibility across the total value chain - from farm to fork so to speak - and all our brands around the world.

The USLP has also helped us grow by addressing external issues such as food security, deforestation or sanitation. For example, it is enormously motivating if you work on a brand like Lifebuoy and your mission is to help a child reach the age of five, by preventing infectious diseases with the simple act of hand-washing. Or a brand like Dove which addresses women's self-esteem. We are now the preferred employer in most of the markets in which we operate and the third most looked up company on LinkedIn globally.

Before becoming CEO of Unilever, you worked at Procter and Gamble for 27 years followed by three years at Nestle. How has your thinking about CSR and the role of purpose evolved as your career progressed?

Thanks in part to the Millennium Development Goals, over the last few decades one billion people have been lifted out of poverty, three million children's lives have been saved each year due to improved hygiene and sanitation, and there are more people in education than ever before. But unfortunately, the crisis of 2007/8 showed that this progress led to high levels of debt, overconsumption and frankly left too many behind. Most companies understand that they have to be part of the solution, but often the focus is still on occasional CSR, rather than fully embedding sustainability into the business model and working with others to drive transformational change.

I was honoured to be asked by the UN Secretary General Ban Ki Moon, to be part of the high level panel to develop the Sustainable Development Goals (SDGs) adopted in 2015. If implemented successfully, the SDGs could irreversibly eradicate poverty in a more sustainable and equitable way.

Over the next year, we will look at how we can make the SDGs an integral part of how every company operates. One of the ways we intend to do this is through the newly formed Business & Sustainable Development Commission, under the leadership of Lord Malloch Brown, which brings together leaders from business, labour, financial institutions and civil society to highlight the enormous rewards to businesses who take a lead in sustainable development. After all, there is no business case in enduring poverty.

So we must embrace the SDG Agenda and recognise it as an important driver of business strategies, innovation and investment decisions. We need more companies on board, and more sustainable business models focused on meeting the evolving needs of societies around the world.

When you started at Unilever in 2009, your approach to CSR set you apart from everyone else. Have you seen a change in your interactions with your peers since then?

We are seeing more companies step up their conversion to a more responsible business model. Some driven by moral reasons and a firm belief in the role of business as a force for good. Others are driven by the economics as the cost of inaction in many areas starts to exceed cost of action. Finally there is a group that understands that we now live in the age of transparency, where there are few places to hide. Irresponsible behaviour will be detected much more quickly and can significantly affect reputation and market value, as we have seen in the many cases exposed.

We are also seeing stepped up partnerships across the industry as many issues, such as ending deforestation, driving social standards across the whole value chain or moving to sustainable sourcing can simply not be done alone. The move to natural refrigerants by consumer goods companies, The Tropical Forest Alliance, Grow Africa or Scaling up Nutrition are great examples of that.

What's the most important thing you've done so far in your career at Unilever?

Hopefully during my 8 year tenure to date I have helped strengthen the values, widened the talent pool to ensure future success and most importantly helped develop a new business model that serves society first and foremost. We are showing increasingly that by doing so other stakeholders and shareholders benefit over the long term, with for example the market cap having more than doubled over this period. We also see brands with a strong purpose and social mission now growing twice as fast as our other brands, and more profitably. Increasingly we are showing that a more purpose-driven model makes a lot of business sense.

What is the greatest lesson you've learned as an intrapreneur?

The power of purpose, passion and positive attitude to drive to great long term business results. Above all the moment you realise that it's now about yourself but about working for the common good, or helping others, that's the moment you unlock the true leader inside yourself.

Finally, do you think that by doing good, you're more successful?

More importantly, in order to create critical mass, we will need to show that it makes economic sense. There is increasing evidence to show that purpose driven models are indeed also good business models for the long term. Take climate change; if no action is taken, the Food industry will see its profits being wiped out in 30 years or less.
Companies that report on their carbon exposure are more in tune with the realities of today's world, and are most likely have thought about the risk of climate change to their business model and taken action. Providing the market with more information also removes risk from the finance sector and results in lower cost of capital. We now see the financial markets catching on - $24 trillion of capital under management is calling for a price on carbon and many are rapidly decarbonising their portfolio. Consumers are equally asking for a more sustainable and equitable future for all and increasingly are making their spending choices on that basis.