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Big company shift underway to sustainability

Paul Polman

by Paul Polman

Filed under Climate Emergency / Diversity of Thinking

Huge change in thinking and leadership is needed for our planet to get anywhere close to achieving Net Zero as rapidly as required. Are leaders getting the message and taking action at last?

Yes. Here Paul Polman describes how at last the mountain of scepticism, caution and resistance is shifting noticeably in the direction needed. The former CEO of Unilever, is now a global engine room for action. He co-founded Imagine to bring together stand out leaders who are determined to drive change by unlocking courageous leadership.

In October 2021 he published ‘Net Positive: How Courageous Companies Thrive By Giving More Than They Take’. Here he gives his update on an encouraging new speed and scale of progress to the BBC’s Today programme on 31 December 2021. His latest assessment should encourage and embolden leaders.

PP: There has been enough progress to turn even the most hard bitten, sustainable sceptics optimistic, I think.

We see things that not long ago seemed for an environmentalist a pipe dream becoming a reality, especially since COVID when people have discovered that you can’t have healthy people on an unhealthy planet.

Rapidly we see Net Zero supply chain commitments coming in from many of the major, if not all of the major companies. Technology [is] advancing, like cheap energy storage, high abatement sectors like aviation, or shipping making decarbonisation commitments.

New clarity: the costs of not acting

And obviously, all of this is aided not only by the enormous cost that we are seeing of not acting - which makes it an interesting business opportunity - but also by advances in technology that are going faster than people have ever imagined.

BBC Presenter: Surely, there is a tension though between maximising profits and dividends for shareholders, on one hand, and on the other reducing or eliminating carbon emissions. Don’t boards have to put the profit - the dividend - first because that is their duty?

PP: Well, you obviously need a profit to survive. I compare profit a little bit with white blood cells in your body. You need these white blood cells to live, but you don’t live for white blood cells.

And increasingly, we can show that if you’re interested in being around for the longer term - which really is a fiduciary duty towards your shareholders - then the best way to maximise the shareholder returns [is shown] increasingly is to take care of all of your stakeholders, and run a more sustainable business model if you want to.

Explosion of ESG investing

We are clearly seeing that companies that operate on that basis increasingly are outperforming the ones that don’t. And this is one of the reasons why you’ve seen also especially in 2020, and now in 2021 again, an explosion of ESG investing.

Not all of it is kosher. There’s a lot of standards that still need to be set, and convergence of these standards globally to make it easier for investors. But the fact that they’re even asking for it means that that it is moving.

As far as the fiduciary duties are concerned, there is a misconception that is really only towards the shareholders. If you look in the company act in the UK and the director’s duty, then it really says that the director has to act in the best interest of the company, not just the shareholders.

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