Paul Polman: A radical CEO

Paul-Polman-chief-executi-005“We’re the world’s biggest NGO,” Paul Polman, the chief executive of Unilever, sometimes likes to joke.

Literally, he is correct: “We’re a non government organization. The only difference is, we’re making money so we are sustainable.”

Lots of money, in fact. As one of the world’s biggest consumer products companies, with such brands as Dove, Hellman’s, Axe and Ben & Jerry’s, Unilever generated about $67 billion in revenues and $7.2 billion in profits last year.

But while Polman has led a turnaround at Unilever since becoming CEO in 2009, he is best known because he is outspoken about his belief  that “business should serve society.” He sounds more like the leader of an NGO like Oxfam or Greenpeace than your typical CEO. He’d rather blather on  about the Millenium Development Goals than boast about his company’s earnings.

More important, Polman’s Unilever uses its global to work for change, around a set of big issues, ranging from curbing climate change to eradicating poverty to deforestation.

That’s why the Center for Global Development, a DC think tank, honored Polman the other night with its “Commitment to Development: Ideas in Action” award. Previous winners include Global Witness, the One Campaign and Oxfam. Polman is the first business guy to get the award, as best as I can tell.

One reason: Unilever’s strong commitment to reducing deforestation, which helped drive the decision late last year by Wilmar, the world’s largest palm oil producer, to sign a “no deforestation” pledge. Wilmar’s commitment has the potential “to create a global revolution in how we grow food,” Scott Poynton, executive director of The Forest Trust, wrote last month in Guardian Sustainable Business. Palm oil is used in a variety of foods, as well as personal care products, like soap.

At the awards dinner, Nancy Birdsall, president of the Center for Global Development, said of Polman:  “He is surely the most outspoken and effective advocate for reducing the amount of deforestation that takes places to produce consumer goods.”

I went to the award ceremony not because I hadn’t heard Polman before — we spent time together last year when I profiled him in Fortune, under the headline Unilever’s CEO has a green thumb — but because he is such an outlier in the business world and I wanted to hear what was on his mind.

He didn’t disappoint. Some highlights from his remarks:

On the need for government policy to curb climate change: “We need to have the business community in the US speak up more, and then the Republicans will have to listen.”

On the urgency of dealing with global problems: “First and foremost, I am a businessman. I like to get to action. This worldis very long on words and very short on action.”

On the importance of sustainable development: “It is desperately needed that we build a new economic world order where we live within planetary boundaries.”

On global inequality: “The top 1.2 billion people consume 75 percent of the world’s resources. That is a system that is not in equilibrium.”

On the exploitation of garment workers in Bangladesh, who are paid 11 cents an hour“That’s as close as you can get to modern-day slavery.”

On the opportunity to have an impact: “In the next 15 years, we as a generation have the opportunity to be the people who eradicate poverty in a meaningful and sustainable way.”

On the need for business to step up to deal with social and environmental issues: “If you don’t make a positive contribution, you will be rejected…I  don’t understand why more CEOs don’t see this.”

Unilever’s Paul Polman: Pushing the boundaries of sustainability

Paul Polman in the store in Unilever house for the employees.More than any other big-company CEO, Paul Polman is serious about sustainability. Polman is serious about pretty much everything, actually. He’s serious about a vast array of problems facing the world, ranging from climate change to malnutrition to obesity to water scarcity to inequality to human rights to global governance, and he’s serious, of course, about his company and its long-term financial performance and especially about its ability to help solve any and all of those problems. He can, and will, pontificate about topics like the UN Millenium Development Goals, the important message of Global Handwashing Day, the social mission of brands like Dove and Lipton and Ben & Jerry’s.

A fun guy? Not really. A fascinating guy? Yes.

I spent time with Paul Polman, as well as other executives at Unilever–including US president Kees Kruythoff, global marketing head Keith Weed, sustainability honchos Gail Klintworth and Jonathan Atwood–while researching a story on the company for FORTUNE. It appears in the June 10 issue of the magazine, under the headline Unilever’s CEO Has A Green Thumb. (The story is behind a pay wall, for now.)

I thoroughly enjoyed getting to know Unilever, which takes a uniquely expansive view of its role in the world. Far more than IBM, GE, Walmart or any other big company, Unilever puts sustainability at the core of its business — its strategy, its operations, its R&D and its marketing. (Patagonia, a much smaller, privately held firm, strikes me as similarly driven by broad concerns.) Polman’s theory, put simply, is “to put the challenges facing society smack in the middle of the business.” So Lifebuoy soap helps prevent the spread of disease in poor countries. Dove stands for the self-esteem of women. Lipton’s sustainable supply chain will help tea growers earn a livelihood. Operations, of course, are efficient, and the global supply chain of tea, tomatoes, onions, etc. aims to become sustainable.

In Port Sunlight, a tidy little suburb of Liverpool where the company got its start back in the 19th century, I visited a research and development lab where some of the scientists are focusing on coming up with laundry soap that can clean clothes using very small amounts of water, at any temperature. Much of the R&D at Unilever, in fact, revolves around planning for what the company expects to be a resource-constrained world.

Will the strategy pay off? So far, Unilever under Polman has done very well, outperforming consumer-products giant Procter & Gamble. But whether the firm’s financial results are driven by its focus on sustainability is very much an open question; more likely, it’s a result of the fact that Unilever has a strong commitment to emerging markets, which have been growing more than the US and EU.

There is, however, one way in which I’m convinced that Polman’s determination to make Unilever a better company has paid off on the short run, and that is with its employees. People I met, as best as I could tell, come to work at Unilever with energy and a strong sense of purpose.  That’s invaluable. As Polman told me, proudly, Unilever is one of the five most searched-for employers on LinkedIn, behind Google, Apple, Microsoft and Facebook. That’s impressive.

Here’s how my story begins:

Paul Polman calls himself a “hard-core capitalist.” Sometimes you have to wonder. The day he became the chief executive of Unilever in 2009, Polman said the consumer products giant would stop providing earnings guidance and quarterly profit reports. “I figured that the day they hired me, they can’t fire me,” he says, “so that was probably the best moment to do that.” The stock fell and analysts grumbled. Not long after came word from the CEO that Unilever, whose brands include Dove, Lipton, Hellmann’s, and Ben & Jerry’s, was determined to tackle big social and environmental problems like climate change, disease, and poverty. “If you buy into this long-term value model, which is equitable, which is shared, which is sustainable, then come and invest with us,” Polman told investors. “If you don’t buy into this, I respect you as a human being, but don’t put your money in our company.” Shareholder return, he insists, cannot and will not trump nobler aims. “Our purpose is to have a sustainable business model that is put at the service of the greater good,” he says. “It is as simple as that.”

This sounds like the boilerplate that fills corporate responsibility reports, but Unilever, which has headquarters in London and Rotterdam, has gone beyond big U.S. Companies like GE, IBM and Wal-Mart by putting sustainability at the core of its business. In a 2010 manifesto called the Sustainable Living Plan, Unilever promised to double its sales even as it  cuts its environmental footprint in half and sources all of its agricultural products in ways that don’t degrade the earth by 2020. The company also promised to improve the well-being of 1 billion people by, for example, persuading them to wash their hands or brush their teeth, or by selling them foods with less salt or fat.

The Fortune story goes on to talk about Polman’s background (he once wanted to be a priest), the company’s paternalistic past and Unilever’s commitment to a water-purification product called Pureit that has little chance of ever making a profit. I hope you’ll find a copy of the magazine and enjoy the story.

2012’s green business heroes

Bill McKibben does the math

Bill McKibben does the math

Some say, and with reason, that 2012 was the best year ever. Never in the history of the world has there been less hunger, less disease and more prosperity. Of course there’s plenty to worry about–the fiscal cliff, gun violence, chaos in Syria and the Congo–as always there will be. But, to paraphrase Martin Luther King, the long arc of history bends towards a more just and sustainable world.

In the little corner of the world that occupies much of my attention–the places where business and sustainability intersect–it has not been a good year. Global greenhouse gas emissions continue to rise. We’re burning more coal, oil and gas than ever. Policy is stuck, in the US and internationally. This will be the hottest year on record in the US, and still people don’t accept the science of climate change. Go figure.

That said, in this final blogpost of 2012,  I’d like to salute some people (again, mostly from the world of business and sustainability) who fought the good fight during the year  just past. Some are business people, others are politicians, activists and even journalists, but they are all doing what they can to bend the arc of history. They’re my green business heroes for 2012. [click to continue...]

Unilever: Boldly going forward…

Since launching its ambitious Sustainable Living Plan in 2010, Unilever is buying more sustainable palm oil and cage-free eggs, putting less salt and fat in its tomato sauces and spreads, selling water purifiers to poor people in the global south and rolling out climate-friendly freezers for its ice cream.

No big company is doing more to limit its environmental footprint, while improving health and well being and growing its business. Unilever’s commitments are wide and deep. It’s no wonder that the firm and its CEO, Paul Polman, have become darlings not just of corporate-friendly NGOs like WWF, but also a favorite of  hard-charging activists from Greenpeace and the Humane Society of the US.

But even as Unilever today [Tuesday, April 26] reported making good progress towards its sustainability goals, questions remain about its strategy: Will consumers–and investors–notice and reward Unilever for its efforts?

It’s obviously too soon to say whether sustainability will drive growth at Unilever, but the early evidence appears mixed. Eco-efficiency efforts in factories have reduced waste and saved money. Unilever revenues have grown nicely, to $46.5 billion in 2011, up $44.2 B in 2010 and $39.8 B in 2009. But the company’s share price is up by less than 2% in the last year in the US market, slightly trailing the S&P500. (It’s doing better in European markets where currency factors don’t come into play.) Meantime, Unilever’s corporate identity is all but hidden behind consumers brands like Lipton, Skippy, Ragu, Bertolli, Hellmann’s, Suave, Dove, Ben & Jerry’s and Breyers, at least here in the US. That makes it hard to win over those consumers who care about companies that do good.

Today, I attended a Washington event with company execs, partners and NGOs where Unilever’s president for North America, Kees Kruythoff, released a progress report on the company’s sustainability efforts. [click to continue...]

Unilever CEO: “Don’t stay on the sidelines”

As a global consumer products giant, with $44 billion euros [nearly $60 billion] in 2010 revenues, Unilever has a big impact on how and what people buy. Two billion consumers use a Unilever product on any given day. If you use Lipton Tea, eat Hellman’s mayonnaise or Ben & Jerry’s ice cream or use Dove or Lifebuoy soaps or  Suave hair products, you’re among them.

Paul Polman, Unilever’s CEO, embraces the idea that his company can make the world more just and sustainable. Unilever buys about 4-5% of the world’s palm oil, so it has promised to purchase all its palm oil from certified sustainable sources by 2015. It buys about 7% of the world’s tea, making it the world’s largest buyer, so Unilever aims to have all the tea in all Lipton tea bags sourced from Rainforest Alliance Certified™ estates by 2015, and 100% of its tea sustainably sourced by 2020.

“We have to take that responsibility,” Polman said today (Nov. 22) during a webcast called Sustainable Living: Mainstream or pipe dream?  The webcast, organized by the Guardian Sustainable Business, was held a year after Unilever released its sweeping Sustainable Living Plan, in which it promised to cut the environmental footprint of its products in half, help more than 1 billion people take action to improve their health and well-being, and source 100% of its agricultural raw materials sustainably. [See my 2010 blogpost, Unilever's big, broad, bold sustainability plan.]

But there are limits to what even a big company can do, so Unilever has begun thinking seriously about how to change consumer behavior around sustainability. Today, it released a new report called Inspiring Sustainable Living [available for download] which identifies five levers for change: Make it understood, make it easy, make it desirable, make it rewarding, make it a habit. [click to continue...]

Helen Clarkson: Beyond incrementalism, five steps to sustainability

Helen Clarkson

Today’s guest post comes from Helen Clarkson, US head of Forum for the Future, a London-based nonprofit that works with business and government leaders to “create a green, fair and prosperous world.” Helen’s got an interesting background: She trained as an accountant because she wanted to work in the international aid industry. “It’s quite boring, but you learn so much about business,” she told me. She spent six years at Médecins Sans Frontières (Doctors without Borders), doing stints in Pakistan, Sudan, Nigeria and the Congo, where she saw first-hand the intersection of economics, health and environment. She joining Forum for the Future in 2007, and opened its office in New York at the beginning of this year.

As you read the green business news over your morning (Fair Trade?) (organic?)  coffee, there’s  lots to get excited about in the world of sustainability.

2011 is shaping up to be the year of the electric car. Clean tech appears to be thriving. Innovative thinking brings us everything from greener cleaning products to new business models such as Zipcar.

But while these announcements promise more sustainable ways of doing things, turning to the science pages can quickly undo your positive mood. Put simply, water, forests, soil – all the essentials of life – are becoming depleted and degraded at a dangerous rate, and our climate is changing at a speed and on a scale far beyond anything modern humanity has ever experienced.

This is an unprecedented challenge. And when you put the scale of the challenge next to the scale of solutions being undertaken you realize that all is not that rosy in the world of sustainability. [click to continue...]

Unilever’s big, broad, bold sustainability plan

Unilever unveiled its 2020 sustainability plan today, and no one can accuse the company of playing small ball.

The global consumer products giant ($57 billion in revenues in 2009) intends to improve the health of 1 billion people, to buy 100% of its agricultural raw materials from sustainable sources, and to reduce the environmental impact of everything it sells by one-half, while doubling its revenues.

Those are big hairy audacious goals (to borrow a phrase from Jim Collins), befitting a company that touches 2 billion consumers a day. Unilever’s brands include Lipton, Dove, All, Hellman’s and Ben & Jerry’s.

The biggest idea here–and the one that will probably prove hardest to achieve–is that a company can grow its sales without growing its environmental footprint. As Dave Lewis, president of Unilever Americas, put it:  “We cannot choose between growth and sustainability. We have to do both.

This is what U.S. consumer-products giant Procter & Gamble implicitly said it could not do when it announced its sustainability goals back in September. (See P&G: A bold green vision but…) Unilever is also hedging its bets some–it is promising a 50% reduction “per consumer use”–and it acknowledges that it can only grow sustainably by changing consumer behavior. That’s no small matter and one that is largely beyond its control.

Still, Unilever’s Sustainable Living Plan, as it’s called, breaks new ground for a number of reasons.

It is comprehensive, setting more than 50 social, economic and environmental targets.

It is rigorous; the company says its has measured the carbon, water and waste footprints of 1,600 products, representing 70% of its volume.

It’s far-reaching, taking into account the full lifecyle impact of its product–from “seed to disposal,” as one executive put it.

It builds on an impressive past history when it comes to sustainability.

And it goes well beyond green, including efforts to improve nutrition–

By 2020 we will double the proportion of our portfolio that meets the highest nutritional standards, based on globally recognized dietary guidelines.

and global health–

By 2020, we will help more than a billion people to improve their hygiene habits and we will bring safe drinking water to 500 million people.

and poverty–

Our goal is to link 500.000 smallholder farmers into our supply network. We will help to improve their agricultural practices and thus enable them to supply into global markets at competitive prices. By doing so we will improve the quality of their livelihoods. [click to continue...]