As people across the United States and the world grapple with the COVID-19 pandemic and calls for racial justice, the business community has an integral role to play in both the dialogue and the solutions to these social issues. Last week, former Unilever CEO Paul Polman urged business leaders to be courageous in their response.
“What COVID has done is a few things that we weren’t really able to get across until then. COVID has made clear that there cannot be healthy people on an unhealthy planet,” said Polman during his webcast conversation with Joel Makower, co-founder and executive editor of GreenBiz. “People are understanding how much more the relationships between biodiversity, climate, inequality — may I add racial tension to that? And I think it is not surprising that more people are asking now for a more holistic solution.”
He noted that citizens, employees and executives alike want better solutions. Polman is co-founder and chairman of Imagine, a “for-benefit” organization and foundation, which he started in 2019 with Valerie Keller, CEO for the organization; Jeff Seabright, former chief sustainability officer of Unilever; and Kees Kruythoff, chairman and CEO of the Livekindly Company. Imagine’s mission is to mobilize business leaders to tackle climate change and global inequality.
During the webcast, Polman noted that one reason he co-founded Imagine was to help break down obstacles for companies trying to deliver on their sustainability commitments.
“It’s difficult for individual companies now to do what the public at large expects from them. They might not have the skill. They might not have the capabilities. They might have the government working against them with policies, which still is the case in many places,” Polman said. “What we’re focused on now is, ‘Can we bring these CEOs together, at industry level, across value chains to make them more courageous leaders to drive these transitions faster?’”
Polman has spent decades at the helm of big corporations — in various roles at P&G and most recently as CEO of Unilever — and he’s known for his optimism.
In Polman’s work at Imagine, he aims to bring together key stakeholders who can make a big impact in their industries. “We carefully select the industries that we believe have the biggest impact on the Sustainable Development Goals, especially around climate change and inequality,” Polman said of Imagine, noting that the organization has started with the fashion industry and is starting to make traction in the food and finance industries. The COVID-19 pandemic puts Imagine’s efforts in the travel industry on hold.
While Imagine is choosy for now about which organizations it is working with, Polman said there will be room for more collaborators in the future. “As these initiatives become bigger, we can include others in the circle, so to speak,” he noted.
In the meantime, here are three major takeaways from last week’s conversation between Polman and Makower.
1. Companies that are focused on ESG performance are better off. “I think now it is clear … that if you want to maximize your shareholder return, it leads you automatically to a more responsible ESG, multi-stakeholder type business model,” Polman said. “That’s what the numbers keep telling us, and that’s also where the fiduciary duty is starting to move to.”
In addition to meeting the expectations of financial stakeholders, there is also the need for companies to meet the needs of their employees. Right now, in particular, there’s an enormous tension within companies because employees want their C-suites to deliver on their promises — for example, truly embedding diversity and inclusion throughout their work in a way that is intentional and sustained.
Companies that have not invested in their employees or their value chains “see that their relationships are broken now,” Polman said. “These are moments of truth where I think you can see what right corporate behavior leads to and what wrong corporate behavior leads to.”
2. Our social model is broken. The people who are most marginalized such as communities of color and those working in service industries have suffered most from the COVID-19 pandemic. Polman noted that people are starting to realize the importance of social cohesion. Moreover, their awareness about our broken systems is increasing.
People in lower paid jobs “have disproportionately paid for this crisis and yet these are the people that we need the most,” he said. “These are the people that provide us healthcare, transport, agricultural products and the list goes on.”
What COVID has done is a few things that we weren’t really able to get across until then. COVID has made clear that there cannot be healthy people on an unhealthy planet.
For some, including government officials and corporate leaders, there’s a sense of urgency to create a better, greener economy. Polman notes that this push is being driven by corporate leaders’ deep understanding that “businesses cannot succeed in societies that fail.”
There continues to be a need to operate within our planetary boundaries and move to a more inclusive, sustainable form of capitalism, Polman said.
3. The real Black Swan has been the lack of leadership. The coronavirus pandemic has done a lot of damage, but Polman said that government leaders, their lack of leadership and inability to work together have been the major reason for the extent of the crisis.
Polman noted that governments around the world are trying to put rescue packages in place that could help with the “greening” of society. But that’s not enough. “The other half still needs to catch on,” he said.
In addition to discussing government leadership, Polman said corporate leaders must show courage. That leadership needs to be moral and human, he said, in order to not repeat the mistakes of the past. For example, Polman pointed to the 2008 financial crisis in which the U.S. federal government rescued the wealthy but left others behind to figure it out on their own.
“It needs to be a leadership with more empathy and more compassion,” Polman said.
At the end of the webcast, this question was asked: At a moment in time when all hope feels lost, how can a person stay hopeful?
“I’m a prisoner of hope. And the second thing is I believe in the goodness of humanity,” Polman answered. “I’m hopeful for the young people because they have a higher sense of purpose and they’re going to play a bigger role. And I’m actually hopeful because of us having waited so long, the cost of inaction is now clearly higher. … And we need to translate [the hope] into action and resources.”