Paul, thank you for talking with us today. The audience of this podcast is people who are interested in being involved, in building back better, and dealing with some of the big global challenges that we're now facing. In a sentence, why should they read your book?

Paul Polman (PP): Well, in a simple sentence will be one question: is the world better off because your company is in it or not? This is probably the most important question to ask. What the book is trying to do is to create a movement that really describes how successful companies can profit -- not from creating the world's problems, but from actually solving the world's problems. So we describe officially in the book Net Positive as: a business that improves the well being for everyone it impacts, and at all scales -- be it product, operations, regions, countries -- and obviously caters to the multiple stakeholders. 

World Overshoot Day this year was July 29, which is the day that we use up more resources than the world can replenish. In other words, every day after that, we're stealing from future generations. So it's not anymore enough to be linear or to be circular. But more and more companies have to think about what can they do to have a positive impact on society. If they really can't answer that, then why should society keep these companies around? 

So the book talks about two things, personal transformation, because it starts with leaders, you cannot have systems changes without leader changes. So leadership transformation, and then systems transformation. And it takes you, with very simple steps, through what you need to do to get your own company in shape, to play a key role in your own value chain in your industry associations, and ultimately, in the broader society that you play in. And, the book doesn't shy away from some of the tougher choices, such as how you deal with tax, with corruption, with trade associations, with money in politics, with human rights. It's written for everybody, small and big companies, others who want to play a role in changing society for the better. So we think it broadly resonates. 

And, if I may, the characteristics perhaps would be good to talk about of a net positive company. That basically boils down to companies that take responsibility and ownership for all impacts and consequences in the world. Intended or not. Many only look at scope one and two under their control. But you have to take responsibility for your total handprint. You cannot outsource your value chain and also expect to outsource your responsibilities. That simply doesn't work anymore. It's companies that operate for the long term benefit of business and society, that try to create a positive return for all stakeholders. They see shareholder value as a result of what they do, not as a goal in itself. And last but not least, they partner to form these broader systemic changes that society needs.

MB: So we're in a very interesting moment where in some ways, business appears to be at least talking the talk on being a more positive force in society. You know, you've had the Business Roundtable decision, that you note, to sort of abandon the Milton Friedman view of the world and to sort of focus on more stakeholder capitalism. And you've had lots of companies saying they're committed to net zero carbon emissions by 2050. And more companies generally stepping into some of the political issues around elections in America, or issues like transgender rights, and yet there's also tremendous skepticism. You take a book like Anand Giridharadas' Winners Take All, which really regards all of this as a giant charade by capitalism. How do you view this data? Because in the book you do acknowledge that, even at Unilever, with some of the things, that you didn't feel you went far enough with, but you were one of the leaders there. Are we getting there? Is this real? Is it just greenwashing? Rainbow washing? What is it?

PP: I've read Anand's book Winners Take All and frankly, that's a book heavy on the analysis and light on the solutions. This book is really more practical and offers solutions to move it forward.

It's very clear that governments are not functioning the way we have designed them, that multilateralism is not really delivering what we expect from it. The multilateral institutions that were designed in, basically, 1944 with Bretton Woods are not adapted to the current changes. And the bigger issues are more global -- climate change, cybersecurity, pandemics, financial markets -- and we're just not getting to it. And what I think what you see is a few things, [such as firstly] technology always developing faster than people realize. So it's easier to change things. Now take green energy [as an example], the International Energy Agency was expecting solar and wind in 2014, to be five cents per kilowatt hour in 2050. We have achieved that in 2020 already. So technology is advancing. 

And the other thing that is happening is the issues are creeping up on us faster than we realized, especially on climate, we're getting closer to a negative feedback loop. And business sees that pressure. You see the weather disasters -- we literally have the world on fire -- disruptions in the food supply chain, and the logistics, and many other things. And in fact, COVID has been a rude awakening that you cannot have healthy people on an unhealthy planet. Just in Europe and the U.S. alone, we've spent $16 trillion on stabilizing and saving lives and livelihoods. The economy itself has probably lost $25 or $26 trillion dollars, according to the IMF. 

So people are starting to realize that the cost of not acting is becoming much higher than the cost of acting. And that's why you see this high level of dissatisfaction with the young people, with employees, with your customers, with people in your value chain. And good companies understand that, they understand that they have to be part of the solution, not the problem. They're internalizing sustainability, they put it at the center of their business, they become more purpose driven businesses. And what you see is that businesses that operate increasingly under these longer-term, multi-stakeholder principles at the core are actually also better performing. That bifurcation has been even stronger during COVID. That's one of the reasons why you see ESG funds taking off, green bonds taking off, the investor community getting actively interested in it, standard setters moving forward. Some of the responsible governments, like Europe, are embedding it in legislation, like the Green Deal or the taxonomy, so it's definitely moving. But as usual, as these things are becoming more topical, thousands of flowers bloom -- for example, we have over 600 standard setting bodies. And it's time to make some bouquets.

And yes, if there are no clear standards, then companies will interpret things differently. And some people might call that greenwashing. And there's undoubtedly some of that going on. But broadly, it is clear that we're moving in the right direction, but [just] not fast enough, and not at the scale that we need. We now have about 20% of the companies, for example, that have commitments to be net zero by 2050. But what about 2030? Because we cannot wait that long. What about beyond scope one and two, and including scope three, four or five? And that still is unsettling for many.

MB: Because in the book, you talk about how these goals ought to be. You use the acronym SMART, which is measurable and realistic. I think a lot of the netzero pledges have been made without the companies that are making the pledges really having much of a sense of how they're going to get there. And so you feel like it's more of an ambition that may be far enough into the future that the company's current leadership need not own it and there's no pathway. Is that a problem?

PP: Well, I think increasingly, for some industries, it is difficult. If you're in the fossil fuel industry where investments are being made by your predecessor or your predecessor's predecessor, and it takes 30 years before you get a return on drilling a well, etc., it's difficult to change very quickly. And some of the heavy industry, which happens to also be heavy emitters, might not have all the answers yet. How do you totally decarbonize airlines, or shipping, or steel, or aluminum and some of the other things? And the fossil industry itself needs careful reflection. But what is clear is that, increasingly, companies understand that it actually can be done, and it is within reach. 

Companies from Salesforce to Microsoft to Unilever, or to Pepsi and others [like] Walmart are making commitments that not only green their supply chains well before [they are expected to]  -- Amazon itself, 2039 -- and they have clear plans and pathways to get there. But they're actually going beyond that, they're looking at restorative commitments, they're looking at integrating biodiversity and planetary health into their thinking. And what we find is that companies that proactively work this are often better run, their leaders are more in tune with societal needs, they come out with better products, have more engaged employees, better relationships in the value chain, and increasingly, that is linked to better returns. 

You can now measure the negative environmental impacts of companies. And even within the same industries, there are some companies who take mitigating their environmental impacts more seriously than other companies within those industries. And what we clearly find is that accounting for these externalities about a quarter of these companies would not be profitable. But even within the industries, the ones that are less productive, also have lower valuations. So I think the market is starting to factor it in. And, looking very much at the leading companies that position themselves well for the future, and starting to reward those. So it is moving. 

But again, as I mentioned before, these issues are creeping up on us quicker than we thought. We're getting close to the situation that the Amazon are becoming negative emitters, that the Borealis melting releases methane that is up to 100 times more potent in the short term, and we don't have that luxury to wait. 

So what you need is to get critical mass behind this transformation, which is a big transformation, we all realize that. And that critical mass can only come from working together with civil society, with governments, obviously, and with the private sector, to drive these broader system changes.

MB: You open the book with this example of [when] you were quite far along in your time at Unilever, and the the CEO of Heinz comes along and makes this hostile takeover bid offer to you. And it seems like this is a battle between the old style capitalism and the new style capitalism. In this case, you were able to persuade shareholders to back you in this new model against the old model. Do you feel like that marked a decisive turning point in the attitude of big shareholders towards how big companies should be managed -- that they seemed to be saying: now we will support this net positive type of leadership?

PP: Well, it certainly raised awareness. I was happy that it happened during my eighth year of tenure in Unilever. We had produced very good returns for our shareholders. We also had worked very hard on changing our shareholder base, which was more loyal and had benefited from this value creation. So it came at a good moment in that sense. But it points out the dichotomy that there is in two legal systems. One that is focused on a few millionaires and billionaires, and financial manipulation, high leveraging up, cutting costs, frankly, something that anybody can do. And one that is more working for the billions of people invested in longer term value creation. And Unilever has certainly done that. Since the Kraft/Heinz attempted takeover bid, their share price has lost about 60%. They've had lawsuits, they've had change management three times, [while] Unilever share price has continued to grow. And I think this longer-term value creation model is also a better model over time for the shareholders, and you don't have to wait too long for that. So that game, I think that was being played there is increasingly being called out as not being constructive for society. And I broadly think that the longer-term shareholders understand that there's just so much money that we've put in the global economy, that a big part of that is chasing short-term returns at every cost. And there are some people that think their own greed is more important than the future lives of their children. 

So you always have to deal with these challenges, but in order to avoid that over time, and to move it in the right direction, we indeed need to be sure that the regulatory frameworks and the moral standards that we put behind it, the obligations that we demand from companies as they operate in society, that they also fulfill the needs of society and get a real license to operate. It hurts to see a company like that at the bottom of a human rights index. And it gives me pride to see Unilever at the top. And if we can square that multi-stakeholder focus, in our case there was a 300% shareholder return over 10 years, then I think that is a much better thing for society. I've always said, I'm a proud billionaire, because we've focused on improving the lives of billions of people. And that's a good way not only to live your life, but if you can also show that it is good for your shareholders, I think you square it, and give people more confidence that this should be the direction we should be pushing for.

MB: I wanted to focus on the last two or three chapters of the book where I think you really push into some of the very cutting edge developments that need to happen if a business is to really achieve its full potential in improving the state of the world. 

One is this whole issue of how you in the industry can partner with your competitors to actually, overall raise standards across the industry. And one example you give us is the fashion industry, which, obviously, increasingly, people are scrutinizing for the fast fashion, and in particular for its lack of sustainability. What have you learned about making a cross-industry partnership successful? What are the conditions that can make that a really positive thing?

PP: There's a whole chapter in the book which is called “One Plus One is 11”