Paul Polman interview with Business Green
This is a transcript of a Business Green interview with Paul Polman, published in September 2015. Business Green is website that covers news and advice for how businesses can grow while becoming more environmentally responsible. Paul was interviewed in New York, the week that the Global Goals were announced at the UN.
How would you summarise your involvement this week?
It is the responsibility of business to promote sustainability
Unilever is involved in the SDG agenda as we fundamentally believe these are challenges that need to be addressed for economies, businesses and society to function. We have hardwired sustainability into the heart of everything we do across the business – our operations, innovations, our brands and our whole philosophy. There is not just a moral imperative to be sustainable but a clear business case too.
I will be in New York this week alongside a number of our other executives. I had the privilege of serving on the Secretary General’s High Level Panel of eminent persons on the Post-2015 Development Agenda. One key lesson from the MDGs was to involve all the key decision makers from the beginning. By doing this the new global goals have come from an extensive dialogue that has been more inclusive than ever before, involving policymakers, business, civil society and citizens. Getting to this moment today has taken enormous work on all sides.
Being discussed at the summit this week will be some of the most urgent issues facing the world. We hope that by the end we will have clear commitments to tackle poverty, inequality and climate change. The talks are essential to our very future.
So why are we involved? Because I believe it is the responsibility of business to promote sustainability – but there’s a clear business argument too. Sustainability has always been in Unilever’s DNA. In the 1890s, William Hesketh Lever, founder of Lever Bros, wrote down his ideas for Sunlight Soap – a product that helped popularise cleanliness and hygiene in Victorian England. Ever since, Unilever has looked to build a strong business around societal needs. We believe it’s possible to grow and do good – indeed grow by doing good and we see consumers increasingly expecting this of business.
Essentially, it’s about looking long-term, serving the societies where your consumers live, where your supply chains operate, contributing to social and economic development, creating jobs and stability, fostering a virtual circle of growth.
Our Unilever Sustainable Living Plan (USLP) is our blueprint for doing this – for operating sustainably across the business – it sets clear and measurable targets. It cuts costs, reduces risks (like future proofing our supply chain through sustainable sourcing programmes), drives growth and fosters trust and purpose. Half of our graduate hires say they join the company because of our sustainability programmes and the way we do business and we are amongst LinkedIn’s top three most sought-after employers – I am sure that our shared sense of purpose is central to this.
The USLP has helped us be a resilient business in an increasingly volatile world. It has helped drive consistent top and bottom line growth ahead of our markets. Our longer term focus has enabled us to address some significant environmental and social challenges: moving to sustainable sourcing, reducing CO2 emissions from our factories, moving to zero waste to landfill - the latter alone saved us €200 million across our factory network - and ensuring that we respect and promote social and human rights, not just in our own operations, but throughout the entire supply chain.
In 2014, we identified four big focus areas under the USLP where we could accelerate and deepen our impact even further on issues such as clean water and hygiene, sustainable agriculture, enhancing livelihoods, especially those of women and deforestation. All of these issues are addressed through the new global goals and we will continue to work in partnership on their delivery and implementation.
Brands with purpose like Dove, Lifebuoy, Domestos, Ben & Jerry’s and our water purification brand, Pureit are growing strongly and creating movements for change.
Take Lifebuoy, its mission is to help 1 billion people adopt the life-saving practice of hand-washing. We’ve already reached nearly 300 million people in some of the most impoverished parts of the world, where preventable diseases are a daily threat. Lifebuoy also happens to be one of our fastest growing brands. In fact, in 2014, our most sustainable brands grew twice as fast as the rest of the business. The global goals being discussed this week have a strong correlation with the social mission of many of our brands.
Did the MDGs have an impact on the business community? Can you point to evidence of how they changed the business and investment environment? (Millennium Development Goals)
The MDGs had a big impact on the global community. The MDGs had an impact on business and business has had an impact on the MDGs. And given that in emerging markets, business accounts for 90% of job creation, you would expect that to be the case. But the world has changed since the dawn of the MDGs and the mood in business has evolved and engagement has increased. Business has been through dramatic shifts in the last five years alone and levels of CEO engagement and understanding on the importance of these issues is at an all-time high.
The case for action is very clear. Just look at the UN Global Compact – with 8,000 member companies it is pioneering new blueprints for how business is done; likewise the WBCSD with a global network of over 35,000 companies. Over a thousand signed the World Bank statement calling for a price on carbon. Who would have expected this five years ago.
Working collaboratively with these organisations and networks, with like-minded partners, is the key to being able to drive transformational change across the industry.
How do you expect the SDGs to impact businesses?
Sustainable business models are vital to long-term inclusive growth and value creation
Business has played an important part in shaping the new SDGs and it will therefore play an important role in realising it. But what’s increasingly clear is that we need more businesses to embrace the sustainable development agenda and treat it as an important driver of core business strategies and investment decisions. Sustainable business models are vital to long-term inclusive growth and value creation.
Our voice, and our leadership, in supporting governments to take decisive action on implementing the SDGs is paramount. And our actions send market signals that the world really can change path, and business leaders are committed to making it happen.
What would you say to those who argue big business should not play a role in development politics?
We should focus our attention on what’s at stake here. As business we have scale and reach, and therefore an enormous possibility to transform markets. We know that delivering the goals can happen only if the public sector, private sector and civil society all step up and demonstrate real leadership.
And here, the business community is – and must continue to be – a key partner in advancing the sustainable development agenda. There is no business case for enduring poverty - after all, business cannot stay on the sidelines of a system that gives it life in the first place. Businesses can help – through investment, job creation and women’s empowerment which aid economic development and stability.
The big change between the SDGs and the MDGs is the way environmental issues have been incorporated – how did this come about and why do you think it matters?
We cannot make progress in improving the lives of people if we don’t also protect the one planet we share
Learning from the MDG process has been essential, building on successes and equally taking lessons from what’s not worked so well. We cannot make progress in improving the lives of people if we don’t also protect the one planet we share. After all it is often the poorest and those that have had least to do with causing climate change that are most affected by it.
The SDGs build on the MDGs by recognising that eradicating poverty eradication and protecting our natural resources are key elements of longer-term sustainable development. This message came across very clearly in the Pope’s Encyclical earlier this summer. The good news is that transformation is already taking place – and in 2015 we have in front of us a perhaps once in a lifetime opportunity to end poverty, and deal with climate change.
Target-setting is all well and good, but how will these new environmental targets translate into policy and development activity on the ground?
Many countries commitments or Intended Nationally Determined Contributions (INDCs) go beyond pure emissions targets to specific measures they intend to take. Of course in many cases domestic legislation or regulations will be needed to turn the targets into reality. Some countries are already moving – take President Obama’s leadership in setting emissions performance standards for power stations as an example. But perhaps most important of all is the signal the Paris agreement will send to private sector investors and the resulting changes in capital flows that are already occurring as confidence in the new trajectory continues to rise.
How do you see the SDGs informing the Paris climate summit?
The post-2015 meeting in New York sends a positive signal that the world is ready to change course. The business community is engaged as never before. If we are successful, we have a very real prospect of reaching an ambitious and equitable international agreement at COP21 in Paris. Advancing progress on human development will be impossible without action to preserve a stable climate.
Global commitment to the SDG agenda presupposes commitment to ambitious climate action. The ambitious vision of the SDGs, and countries commitment to implement it can only add further moral weight to the necessity of a Paris agreement that really marks the turning point in our fight against the prospect of runaway climate change and the end of the fossil fuel dominated economy.
What commercial risks and opportunities do the SDGs and Paris present for a company such as Unilever?
It is absolutely vital that we reach an agreement in New York and Paris this year. The effects of climate change threaten us all, impacting both consumers and supply chains and often hitting the poorest communities the hardest. This is an issue for all global companies, not just Unilever. If we don’t all tackle climate change in a constructive way, global economic growth will be stifled.
I have talked earlier about the economic and business opportunities that the SDGs and Paris bring. How our brands whose social missions are aligned with tackling some of these global challenges, are growing strongly. Thinking about sustainability - the SDGs and climate - also drives innovation. So if you design with the circular economy in mind or innovate to reduce packaging, you can save money as well as doing the right thing.
Practically how do you see Unilever responding to these new targets?
We have already set out our ambition to double the size of our business whilst halving our environmental footprint and increasing our social impact. This is the core focus of our business – enshrined in the USLP, and something that we continue to evolve as we make progress.
For example, in 2014 we strengthened the USLP to include a new commitment – our pledge to empower 5 million women by 2020. And earlier this year, we released our first ever human rights report (PDF | 5MB), which set out our ambition to actively advance human rights across all areas of our business. We will continue to take lessons from the SDG framework.
How confident are you these goals can be met? Where are the biggest challenges in meeting these goals?
I am very confident. I am confident because this is about setting the world firmly on a course to end poverty and protect our planet – there is no bigger task. But meeting these ambitious goals will require an economic transformation, a new way of doing business and an even greater emphasis on collaboration. But we need to overcome the common misconception that somehow action on climate and poverty are at odds with economic growth.
We have seen the impact the Global Commission on Climate and the Economy has had in reframing the narrative on climate action and economic growth. As businesses, we will need to give confidence to governments that economies can grow inclusively and sustainably and that policies which reward sustainable behaviour are better for the bottom line.