Arun Sudhaman 16 Sep 2016 // 7:55PM GMT
Unilever CEO Paul Polman has come to embody the idea that businesses must be about much more than just profit. Capitalism, according to Polman, can no longer prosper at the expense of society. In his eyes, Unilever is a model for a more sustainable and equitable form of business, a company that does well by doing good.
Polman’s thinking has come to define Unilever’s brands, which now incorporate social purpose as part of their core positioning, alongside a sustainable living plan that is seen as a model of corporate sustainability. It is a stance that has seen him decry the quarterly reporting cycle, arguing that such a short-term mindset detracts from the company’s longer-term goals.
For all of these reasons, Polman is widely viewed as the kind of visible CEO that represents the best of public relations. So his address earlier this week to the Arthur W. Page Society annual conference in London — an audience that included the world’s top communications directors — was always likely to be treated with immense interest.
And rightly so. According to attendees of the session, Polman began by noting that while — statistically speaking — this is the best time to be born, there are critical environmental, economic and societal challenges that must be addressed.
The costs of not acting to create a more inclusive and sustainable society, argued Polman, are much higher than the costs of action. Much of his thinking was framed in economic terms, putting tangible dollar numbers against the various costs associated with sustainability goals. One particularly stark example: it costs less to feed the hungry than the various penalties that banks have incurred.
Accordingly, Polman believes a long-term view is required and corporate financial targets must reflect this, rather than a short-term focus on quarterly profits. Money, he said, is a means to an end. The case must be made for environmental and social capital, all of which requires a longer view.
Polman then noted that without trust in companies, there can be no genuine prosperity. And trust requires transparency. 75% of US graduates, he said, do not want to work for big companies anymore; they have a strong preference to act for common good.
With all of this in mind, Polman believes a company’s communications department can help shape the world. In particular, he pointed out that brands with a stronger purpose grow twice as fast. Lifebuoy, as an example, helps children reach the age of five, by improving sanitation in emerging markets. Food brands can help solve the problem of nutrition. And Dove can address women’s self esteem.
Other Unilever goals include carbon neutrality by 2030 and ambitious targets to reduce waste. These, said Polman, do not necessarily translate to quarterly earnings guidance. He added that most board discussion focuses on shareholders, such as the powerful multibillion dollar pension funds — a phenomenon that he does not necessarily think is healthy.
Instead, Polman wants companies to report their contribution to sustainability goals, and also the purpose of their brands. In this regard, the Global Reporting Initiative is crucial. Moves like these put Unilever at the forefront of efforts to make business more responsible. Yet, as Polman surely knows, unless more big companies — and, indeed, their communications chiefs — follow Unilever's lead, many of these ambitious global goals will prove critically difficult to realise.