Is there profit to be made in attempting to fix global problems instead of contributing to them? As new strains of disease plague daily living, climate change causes arid conditions as much as flooding and food shortages are a reality in many places – who is responsible for seeking and implementing solutions? Is it the government’s responsibility or do businesses have a role to play?
This is precisely what is considered in Net Positive: How Courageous Companies Thrive by Giving More Than They Take. In this paradigm shifting book, former Unilever CEO Paul Polman and sustainable business guru Andrew Winston proffer a model by which companies give more to the world than they take out or use of it.
What the authors refer to as net positive companies, are those which connect purpose, profits and collective action to deliver the scale of change and transformation the world needs.
The coauthors wade through 50 years of corporate dogma to unearth key lessons from pioneering enterprises about how one can profit from fixing global problems. Their message is that for businesses to thrive tomorrow, they must become ‘net positive’ by giving more to the world than they take.
Writing about Fortune 500 CEO survey results, President and Chief Executive of Fortune Media Alan Murray says that corporates believe they should “mainly focus on making profits and not be distracted by social goals.”
Net Positive outlines the principles and practices for surviving and thriving, based on the experience of one world-leading company, Unilever, which opted to be guided by doing the harder ‘right thing’ than the easier wrong – and other groundbreaking global organizations.
The multinational faced challenges in early 2017 when it was on the road to attaining its Sustainable Living Plan, which placed purpose and people’s lives at its core. As Unilever worked to double sales whilst simultaneously cutting its environmental footprint, revenue grew by 33 percent to reach US$ 60 billion.
In the midst of this activity, Chairman of Kraft Heinz Alexandre Behring visited Unilever’s headquarters in London, and Polman assumed that Behring had come to make an offer on one of the businesses that the corporate wanted to sell. Instead, he offered to buy Unilever for 143 billion dollars – an 18 percent premium over the market price.
Kraft Heinz had been bought by Brazilian private equity firm 3G Capital and Berkshire Hathaway, and was making a bid to buy one of the largest conglomerates in the world. This was going to be an interesting battle since 3G had a reputation for slashing expenses and increasing short term margins, and Unilever had been in operation since 1929.
Unilever was delivering a 19 percent return on invested capital but the goodwill created by investing in partners and working with stakeholders won the day. 3G Capital backed down. Another plus factor was that during Polman’s 10 year tenure as CEO, Unilever shareholders had received returns of nearly 300 percent.
On another front, the authors point out that as many as three billion people will become ‘climate refugees’ when their communities become too hot or too flooded to live in as global warming advances. This was clearly seen in the summer of 2022 when temperatures soared to over 45°C in cities such as New Delhi and floods swamped low-lying areas in Bangladesh.
Now, more than ever before it is vital that nations reimagine their economies and companies. Many in the business community – enterprises great and small – have already heeded the signs and are looking for and implementing solutions to our most profound challenges by deploying long-term, purpose-led business models that put people and planet first.
And these efforts have been rewarded as new tools, AI and data-driven transparency, and radical improvements in the economics of clean technologies have opened pathways to profitability.
Former General Electric CEO Jack Welch initially valued short-term shareholder profits. But since retirement, he has taken a different perspective. Welch now says: “Shareholder value is the dumbest idea in the world.” Shareholders are not the only constituents needed to reach new goals.
In Sri Lanka, there’s a cry for the privatisation of loss making state owned enterprises whose cadres are crammed with political cronies. But privatisation is not a panacea – as investors will look at how they can reap profits, and businesses can’t be spectators when it comes to national issues, nor can they thrive in societies that fail.
The compelling case studies in this book outline the principles and practices that could be emulated by others to deliver the scale of change and transformation the world so desperately needs. This work by Polman and Winston is a must read for every aspiring sustainable business.