Early in his tenure as chief executive of Unilever, Paul Polman sought to reinvigorate the consumer-goods giant with a strategy anchored in an elevated purpose and identity for the company.
The result was the launch in 2010 of the Unilever Sustainable Living Plan (USLP), with the goal of doubling the size of the company’s business while reducing its environmental impact by half and improving the health and wellbeing of more than a billion people. (Unilever owns Axe, Ben & Jerry’s, Dove, and other ubiquitous consumer brands.)
Polman’s new book, Net Positive, written with sustainability expert Andrew Winston, is at its core the story of that strategy and its lessons for running a successful business that also contributes to addressing climate change and inequality.
By the 10-year mark in 2020, the USLP had met or exceeded most of its goals, and influenced other organizations to set ambitious sustainability targets, with Polman emerging as arguably the preeminent business spokesman for retooling big companies to better contribute to society.
He and Winston argue that today’s goal should be to create a “net positive” business “that improves well-being for everyone it impacts and at all scales—every product, every operation, every region, and country, and for every stakeholder, including employees, suppliers, communities, customers, and even future generations and the planet itself.” (p. 7) Their contention is that companies are better positioned to thrive and profit if they’re solving the world’s problems rather than creating them.
It’s a more specific and ambitious version of the “stakeholder capitalism” that has been touted over the past few years by top CEOs, who Polman acknowledges have failed to fully follow through on their promises. And while Net Positive at times reads like a Unilever corporate tract and at others like a dry manual for private-public partnerships, Polman’s own prominence and success as CEO of one of the biggest multinationals make this book important and compelling.
The most exciting part of the book, in many ways, is the chapter devoted to nine issues that businesses are often unwilling to acknowledge, but which can no longer be ignored. It’s exciting if only because it’s rare to have a member of the elite CEO club be so blunt about these problems and call out peers by name as offenders. ”This is hoarding money and power,” they write. (p. 194) The issues Polman and Winston highlight are:
- Tax avoidance. They name Amazon and other tech giants and Starbucks as offenders, but note that roughly one-quarter of the profitable S&P 500 companies paid no taxes or got money back from the government.
- Corruption. Here Polman and Winston discuss developing countries, but also what they describe as “morally hazy” involvement by Oracle CEO Larry Ellison with the Trump administration.
- Executive compensation. The authors cite GE CEO Larry Culp, who oversaw pandemic-related layoffs and then received a massive bonus last year. “Pay the top execs less, and peg the ratio [to other employees’ salaries] at a reasonable level (and maybe develop a sense of shame),” they propose. (For the record, Polman made about €11.7 million in 2018.)
- Stock buybacks. These reflect the unhealthy obsession with short-term performance.
- Unprepared boards. Corporate directors are “unprepared for the rising expectations of the outside world” and “remarkably short term in their focus.” Boards are “low in diversity and lack perspective,” Polman and Winston write. (p. 205)
- Lax human rights and labor standards. Some 1.6 billion workers worldwide have few protections or rights.
- Trade association lobbying. Unilever quit the US Chamber of Commerce lobbying group over its climate stance.
- Money in politics. “Companies should follow [IBM’s] example and commit to making no political donations and being much more transparent,” they write. (p. 211.)
- Inadequate diversity and inclusion. Through the use of targets, for example, Unilever got to 50% female managers in 2020.
On the question of whether business leaders should wade into societal issues, Polman and Winston are refreshingly clear. “There really is no choice,” they write (p. 253.) Employees and other constituents are watching, and will abandon the company if they believe it isn’t taking enough of a stand. “Get off the sidelines and speak out publicly, alone or collectively, to protect democracy, freedom, science, and truth.” (p. 273.)
Polman and Winston suggest five core principles for how a business can be net positive:
- Owning all of its impacts, whether intended or not.
- Operating for the long-term benefit of business and society.
- Creating positive returns for all stakeholders.
- Achieving shareholder returns as a result rather than the only goal.
- Partnering with other companies, governments, and non-governmental organizations to drive change.
They offer specific advice for how companies should set sustainability goals, including what they call the “reverse goal challenge.” “If you set a target to get to 60% renewables, you’re also committing to a goal that says ‘40% of our energy will produce climate changing gases and will cost us more,’” Polman and Winston write. (p. 111) They suggest saying that aloud and considering whether you’re proud of that target.
To be sure:
- Net Positive paints multinational corporations and their leaders as primary agents for fixing the world—and there’s abundant evidence to suggest that solving climate change and inequality requires more radical solutions and actors. “There is no denying that today’s elite may be among the more socially concerned elites in history,” writes Anand Giridharadas, one of the most trenchant critics of this Davos set, in Winners Take All. But “by refusing to risk its way of life, by rejecting the idea that the powerful might have to sacrifice for the common good, it clings to a set of social arrangements that allow it to monopolize progress and then give symbolic scraps to the forsaken.” (p. 7)
- Unilever itself has been rightly criticized for moving too slowly on important fronts, including addressing the environmental destruction of palm-oil production. It has also come under fire for marketing skin-lightening products in ways that perpetuate discrimination and digitally altering models’ bodies to confirm to beauty stereotypes.
- The book often reads like a Unilever-produced sustainability report. “Even without a direct connection to sales, Unilever helps enrich the communities it operates in,” the authors note, for example. (p. 159) Polman is at times presented as something of a superhero, the sole business representative in an important United Nations working group, for example, and the man who negotiated the release of Greenpeace activists from jail in Russia. And the section on partnerships at times feels like a laundry list of Unilever initiatives in that area.
Memorable facts and anecdotes:
- In 2017, Unilever faced a “near-death experience” when Kraft Heinz launched a $143 billion hostile takeover bid. Polman resisted the acquisition by Unilever’s rival, whose private equity owners were driven by short-term shareholder returns. Ultimately, Unilever succeeded in fending off Kraft Heinz, which Polman and Winston argue was in part thanks to goodwill it had generated with NGOs and the public.
- Unilever’s “purpose-driven brands”—which are linked to addressing societal issues such as sanitation—have higher margins than the rest of the business and have grown 69% faster.
- The CEO of a European carmaker asked all of its board members to write a letter to their grandchildren about what they did on the board.
- An NGO partner boldly rejected Unilever’s plan to recycle “sachets,” the small-format packaging responsible for unnecessary waste in India and elsewhere. It argued for more radical-change, such as packaging-free stores.
- “An economic system where still too many people feel they are not fully participating or are left behind will ultimately rebel against itself.” (p. x)
- “The ultimate question is this: Is the world better off because your business is in it?” (p. 7)
- “Our current economic system has two fundamental weaknesses: it’s based on unlimited growth on a finite planet, and it benefits a small number of people, not everyone.” (p. 13)
- “If you’re quiet, you’re complicit. If you stand back and watch leaders in government or business undermine democracy, science, and civil rights, you’re helping autocracy and ignorance take over.” (p. 49)
- “When you publish your sustainability report, if you don’t give your lawyer a heart attack, you’re not doing it right.”—Jeff Hollender, Seventh Generation cofounder (p. 55)
- “Embrace your younger employees and let them pull you into the future.” (p. 90)
- “People with purpose thrive, brands with purpose grown, and companies with purpose last.” (p. 92)
- “If a goal is not making you uncomfortable, it’s not aggressive enough, and someone else will likely disrupt you.” (p. 97)
- “Trust comes on foot and leaves on horseback.”—Dutch proverb (p. 122)
- “If you only look at price, you won’t get the lowest price. It sounds ridiculous, but it’s only when you work with suppliers to coordinate innovation investments and improve overall cost structures—without obsessing about price per unit—that you really get better prices.” (p. 147)
- “Companies use basically two tools of influence to create the outcomes they want: corruption and lobbying. The difference between the two is often one of semantics.” (p. 169)
- “Success without integrity is failure.” (p. 199)
The bottom line is that Net Positive clearly lays out the case that businesses should be able to do well by doing good. Drawing on the important example of Unilever during Polman’s tenure, it’s also a high-level guide for organizations to more aggressively contribute to combating climate change and inequality.