Jonathon Porritt: can big business can be a force for good?
Twenty years ago, the notion of business being a “force for good” was frankly corporate philanthropy with knobs on. But over time, the business case for sustainability firmed up and today, for many companies, it is more than a marketing ploy. But is it enough? No.
The constituent elements of this model are pretty well understood: strategies led by a shareholder-friendly ‘business case rationale’ (rather than values-led), and based on the standard corporate measures for sustainability, Environmental, Social and Governance (ESG). A strong emphasis on carbon, water and waste, but far less on biodiversity. A traditional balance between risk management (including reputational risk) and business growth. A broad acceptance of the need to be ahead (but only just) of regulation, and big investment in measurement. After all, no measurement, no reports.
More recently, the social agenda has become more important, with growing emphasis on human rights and living wage issues. I detect a growing enthusiasm for collaboration, within and between sectors, and some commentators point an increasingly influential voice of business in global conferences and policy-making.
But is this model of corporate sustainability fit for purpose? No.
It’s flawed. One, it operates within the prevailing political and economic framework, leaving corporate wriggle room. Two, there are clear limits beyond which business chooses not to operate or speak out. Matters like shareholder supremacy and the ever-so-convenient sanctity of their shareholder duties.
It’s as if globalisation as ‘a good and necessary thing’ for everybody, when it clearly isn’t. Particularly for those affected by crass outsourcing, ruthless tax loopholing. Developing nations are deprived of legitimate tax revenues. Workers endure low wages because big business has its ‘hands are tied’ by international competitiveness. The same international competiveness that gives remuneration committees free rein to boost executive pay, regardless of actual performance.
But there is light. Forum for the Future has been tracking this stuff for more than twenty years. It’s been an astonishing privilege to see how leading global businesses have gradually upped their game in response to a host of converging sustainability challenges. And right at the top of our ‘roll of honour’ is Unilever, with whom we started work in 1997.
Almost by definition, with its global reach, it’s become the leading proponent of the simple and inspirational idea: many very small individual actions can scale up to very big collective impacts.
This clear precept is the heart of Unilever’s Sustainable Living Plan. It is, without a doubt, the most comprehensive and far-reaching sustainability strategy of its kind. Today, Unilever is evaluating just how far it’s going to get in meeting the many, many targets set back in 2010, and an impressive story of reducing carbon footprints, while beginning to make meaningful impact on large scale positive social and environmental change.
The Unilever benchmark has inspired many other companies, including its direct competitors, to raise their own game. On palm oil, as the world’s largest purchaser, Unilever has helped make a strong case for certified sustainable palm oil, and has led the way on getting a good outcome on stopping deforestation in all its supply chains. It’s not perfect, of course, and it’s moved much too slowly and cautiously for many of its critics, but these challenges aren’t easy.
In one area, however, it will almost certainly have to admit defeat: the almost insanely ambitious targets for helping to reduce the impact of the people using its goods. These CO2 and water consumption targets will be missed by a very big margin.
But let’s be clear: no-one else has set out to influence its consumers’ behavior in that direct way, which tells us something very significant about where we currently stand in progressing to a more sustainable global economy. Companies must move ‘doing less bad’ to being genuinely ‘net positive’ faster. But without a much more profound transformation in consumer behavior, their achievement will be capped.
So will Pukka be safe in Unilever’s hands? None of us really knows the answer to that all-important question, but all I do know is that no other global FMCG company could even begin to make that claim. That’s not just because of the Ben and Jerry acquisition, which I’ve followed closely, and enthusiastically celebrated. It’s a wonderful marriage between Unilever (a conventional plc if ever there was one!) and Ben and Jerry (an almost self-consciously unconventional disruptor!).
With the very public ironclad commitments made – by both parties – for Pukka to remain 100% organic, driving social benefit with Fair For Life, champions of sustainable herb sourcing with FairWild, committed to giving 1% of sales to environmental charities with 1% For The Planet, as well as being active members of B-Company, it seems that the anticipated growth will only bring benefit. By leading the way for business to be a force for good, small businesses can help big businesses make the change they so urgently need to, faster.
For this goal to succeed it is crucial that Unilever continues to fight its corner for the all-important idea of long-term value creation rather than short-term profit maximisation. And its investors have been more and more supportive. When Kraft Heinz pounced back in February, a frisson of horror ran through the sustainability community. Happily, the Unilever Board persuaded enough investors that the hostile bid did not represent a good long-term deal, however inflated the offer seemed.
Kraft retreated. But this intense shock reverberated throughout Unilever. To good effect. The commitment by Paul Polman to achieve higher margins for all its shareholders could all too easily have an impact on its sustainability ambitions, but, if anything it is more resolute.
As he has said before: “We want to use our scale, influence and resources to make a real difference to issues that matter – such as driving women’s empowerment, mainstreaming sustainable agriculture, improving access to clean water and sanitation, and eliminating deforestation. We want to help create 'transformational change' – not simply incremental improvements, but fundamental change to whole systems.”
Polman unapologetically advocates a different model of capitalism, but is only too aware of all the constraints and ideological absurdities with which Unilever’s hopes and ambitions are so painfully circumscribed. It’s not perfect – far from it – but it is blazing a trail. Devotees of what Pukka has to offer to a more sustainable world (genuinely sustainable!) should have hope. Unilever’s vision is leading the essential change that must happen, not just for a sustainable economy, but for a sustainable future too.