So, what should a net zero approach mean, given this context? “The only thing that really works longer term is if we think restorative, ‘repair-ative’, and that is what we call net positive. We ask ourselves a very simple question in the book: how can I profit from solving the world’s problems, not creating the world’s problems, and is the world better off because my company is in it — yes or no?”
Polman believes that very few companies can answer that question in the affirmative — not even Unilever — and he acknowledged that this is difficult.
“For us, a net positive company is a company that, first and foremost, takes responsibility for its total impact in the world – all consequences, intended or not. Many of them think that they can outsource their value chain and also outsource their responsibilities; that doesn’t work anymore.
“A net positive company operates long term by addressing these major issues and works ‘multi-stakeholder’ puts sustainability at the core. They see the shareholder return as a result of what you, and not as a myopic objective. And, last but not least, these companies work on the broader transformations that society needs.
“These issues are simply too big for anybody to do alone. And they cannot really happen at the scale and speed that we needed if we don’t get the right frameworks in place. So, this is what net positive companies do. And increasingly we are starting to see signs of that happening. But we obviously need to scale it.”
With leadership key to being able to achieve net zero objectives, it’s important to consider what kind of leadership is required. Polman’s answer: “courageous leadership”.
To explain this, he referred back to the height of the Covid-19 pandemic, a period that tested leaders in many ways. Polman observed that there were two “bifurcations” evident at the time.
The first was between two types of company. Those operating under what he called “multi-stakeholder, longer term models”, with purpose at their core and embedding sustainability in all of their operations, did better. That was reflected in the relative outperformance of environmental, social and governance (ESG) funds, Polman said.
By contrast, companies that were just focused on the shareholder, had become over- leveraged, had not invested in the resilience of their value chain or in their own employees, had a harder time getting through the crisis.
The second bifurcation was related to leadership itself. “Where organizations that were run by leaders who showed a higher level of empathy, compassion and humility [and were] purpose-driven and thinking on multi-generational terms — they instilled a higher level of trust at a very uncertain time when many people had an enormous level of angst,” Polman explained. “And those companies and those leaders tended to do better. They created a following that ultimately gets translated into results.”
In the book, Polman and Winston say that such companies give more than they take and are run by people who lead “with the heart and the brain”. Such courageous leaders are in essence “bringing humanity back to business”. They have a high level of awareness of what is going on in the world and a high appetite to engage.
“As a result of that higher level of awareness and purpose, they’re not afraid of setting the targets that are needed, not the targets that they can get away with,” Polman explained. “They’re not afraid to work in partnership and listen to sometimes inconvenient truths. And they’re not afraid to work with broader changes that society needs, even if it requires working with governments and others, which at times is not that easy.
“You cannot have a sustainable company if you’re not sustainable yourself, or a purposeful company if you’re not purposeful yourself. You cannot be a courageous company, if you don’t have that courageous leadership,” he said.