Net Positive. By Paul Polman and Andrew Winston. Harvard Business Review Press; 352 pages; $30 and £22
WHAT IS THE purpose of a company? For some, the answer is simple: to make as much money for shareholders as the law permits. But many modern companies take a much broader view. They argue that business should also serve workers, consumers and society at large, and that profit should not be pursued at the expense of the environment or social justice.
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One figurehead of this movement, dubbed sustainable capitalism, is Paul Polman, ex-chief executive of Unilever, the consumer-goods giant. In that role he unveiled Unilever’s sustainable-living plan, which made commitments to cut its environmental footprint by half and help a billion people improve their health. Together with Andrew Winston, a writer, he has produced a book on his approach, defining “net positive”, the catchphrase of the title, as “a business that improves well-being for everyone it impacts and at all scales”.
Such grand statements attract criticism from both the right and the left. Conservatives disdain the philosophy as “woke capitalism”, which wastes shareholders’ money on gestures that make executives feel good about themselves; left-wing critics view it as a smokescreen that allows businesses to keep raking in profits by misleading consumers. It doesn’t help that advocates of sustainable capitalism are overly fond of acronyms and jargon. This book is no exception, containing phrases such as “leverage the company’s DNA to serve stakeholders better”.
But it distinguishes itself by detailing the many practical steps that Unilever took while Mr Polman was in charge, as well as the difficulties the company faced and the progress yet to be made. For example, it achieved the goal of paying all its direct employees a living wage by 2020, then set about requiring all its suppliers to do the same by 2030. The aim of ensuring that all agricultural inputs came from sustainable sources by 2020 proved too difficult, not least because it was hard to define what “sustainable” meant in this context.
Mr Polman says tough targets force managers to come up with innovative solutions. Lack of ambition is a fault, in his telling. “If a goal is not making you uncomfortable,” he advises, “it’s not aggressive enough.” Aiming to get only 60% of energy from renewable sources, for instance, implies that 40% will involve climate-changing gases. And there were successes. Unilever managed to reduce its carbon emissions by 65% in manufacturing, while sending zero waste to landfill. Mr Polman points out that these programmes have helped the company save €733m ($851m) in energy costs since 2008. It also achieved gender parity in management.
All this meant that the company’s financial performance was strong enough for it to fight off a takeover bid from Kraft Heinz in 2017. Its survival, in Mr Polman’s view, was because of its commitment to sustainability, not despite it. Take Lifebuoy soap, one of its oldest brands. An initiative that focused on the health benefits of handwashing in developing countries boosted sales. But a study also showed that the scheme reduced cases of diarrhoea, acute respiratory infections and eye infections among participating Indian families.
Cynics might sneer that Unilever was motivated by profit. But no one who reads this book can doubt the sincerity of Mr Polman’s belief that capitalism and good works can be combined. ■
