In this edition of Author Talks, McKinsey Global Publishing’s Raju Narisetti chats with Paul Polman, the cofounder and chair of IMAGINE and former CEO of Unilever. In Net Positive: How Courageous Companies Thrive by Giving More Than They Take (Harvard Business Review Press, October 2021), Polman and coauthor Andrew Winston, a sustainable-business guru, argue that to deliver the scale of change and transformation the world so desperately needs, companies must become “net positive” by giving more to the world than they take. An edited version of the conversation follows.
Paul Polman on business as a force for good
Why did you write this book now?
The timing is right. What we’re trying to do with Net Positive is create a movement so business can be successful by not creating the world’s problems but by solving the world’s problems. It is clear that people increasingly understand what needs to be done. COVID-19 has brought on an even higher awareness that you can’t have healthy people on an unhealthy planet. But many businesses struggle with the how. And this is as much a leadership transformation as it is a systems transformation.
The CEOs of this world are being held to significantly higher standards than they can deliver on.
The CEOs of this world are being held to significantly higher standards than they can deliver on. This book, in a very practical way—drawing on my Unilever experience and other experiences—talks about your own transformation, why you should care, and how you can set the tone from the top. It also looks at how you transform your company: first, internally and then in partnership with your value chain or your industry and, increasingly, in broader systems. There’s no better time to do that than now.
How can this book help CEOs get over their initial inertia?
There are many different things that need to be addressed that are actually blocking us. I personally believe in the goodness of human beings. I’ve never met a CEO who wants more unemployment, people going to bed hungry, or the destruction of nature. Yet, collectively, we’re clearly not behaving in the right way. One of the main reasons is the boundaries around us. Often our behavior is dictated by the boundaries that we have to deal with.
There is the simple bottleneck of CEOs not being able to solve some things themselves, because they don’t have the skill. No CEO alone can solve the issues of plastics in the oceans or climate change or inequity or human rights in the value chain. Collectively, they can, but then there are bottlenecks. If one CEO does it, the other doesn’t do it. They ask, “Why should I do the work and the other get the benefit? If my competitor does it, does he or she get the credit? If I go first, am I at a competitive disadvantage?”
So what we are trying to do with this book is get companies to prepare themselves for a seat at the table, working within their own value chains in their industries to be very competitively positioned for the future. But ultimately—and we describe this as one of the hallmarks of net-positive companies—they drive these broader systems transformations by working with civil society as well as the government sector. It is these broader systems changes that will benefit the world the most.
How can leaders take bigger, bolder steps?
The changes that we need are of such magnitude that they require not only personal courage from CEOs themselves but also broader, more transformational partnerships. Many companies, regretfully, are still struggling to stay on the right side of the law.
Being in the corporate-social-responsibility space is simply not good enough anymore. We need to be more ambitious. CEOs need to move from playing not to lose to playing to win; they need to set targets that they might not know how to achieve yet but they certainly know are needed. It is a tougher task. And that’s why it’s so important to have your inner motivation, your purpose, because the road of change is full of cynics and skeptics. But when you walk it and when you start implementing it, it will be very rewarding.
The book also doesn’t shy away from talking about what we call the “elephants in the room”: how to deal with money and politics, corruption, taxes, and human rights in the value chain.
Is the net-positive vision really achievable?
I think it is, and all the studies that have been conducted point to that. Let’s take climate change, for example. The aim is to be net zero by 2050—to have no incremental carbon emissions. A 50 percent reduction of absolute emissions every ten years is, by all means, possible. And as COVID-19 has shown, it’s probably a cheaper option than dealing with the consequences. We live in a world that’s literally on fire. We’ve spent $16 trillion in Europe and the US alone to save lives and livelihoods. The IMF [International Monetary Fund] estimates that the global GDP took a $26 trillion hit. People are starting to realize that the cost of inaction is higher than the cost of action. Interestingly, we’re moving, and we’re moving fast. Twenty percent of companies are making net-zero commitments on climate change. Increasingly, these commitments are for between now and 2030, not a promise for 2050.
There are very practical pathways to get there. The first one is the technology that has developed, which people are often not fully aware of. Sixty percent of green energy, for example, is already cheaper than fossil-fuel alternatives. But many people are still not fully aware of these possibilities, as technology is developing so fast. The second is that people see the enormous cost of not acting versus the opportunities of acting. The third one is driven by the younger generation, which is increasingly demanding more responsible business models. Fifty percent of the world’s population is now under 30 years old, so they’re driving these megatrends, with sustainability certainly being one of them, and COVID-19 has accelerated that.
Now for businesses, it’s tough. The average tenure of a CEO has dropped to four and a half years. It is really tough to be a CEO. But at the same time, 90 percent of the CEOs say they don’t want to go back to where the world comes from, and it’s very clear that investing in a greener, more sustainable future creates more jobs, better jobs, more resilient jobs, and jobs poised for success. The CEOs that keep their heads in the sand or deny climate change, as we’ve seen with a certain group of fossil-fuel companies and companies in some other industries, will increasingly be relegated to the graveyard of dinosaurs.
The CEOs that keep their heads in the sand or deny climate change, as we’ve seen with a certain group of fossil-fuel companies and companies in some other industries, will increasingly be relegated to the graveyard of dinosaurs.
A new version of this movement that we want to create, hopefully, will come in three or four years’ time. People will say, “I want to work for a net-positive company,” “I want to go to a net-positive university.” Hopefully, this becomes the gold standard of how we collectively live in this world. Businesses will not create the world’s problems and profit from them, but they’ll actually solve the world’s problems and be even more successful as a result.