Few top executives are as synonymous with changing the way companies view their role in the world as Paul Polman, who announced last week that he is retiring from Unilever, the world’s third-largest consumer goods company, after ten years as the company's CEO.
Polman pushed boundaries in redefining how a company could take on big societal challenges and remain hugely profitable. He declared an end to quarterly profit reports in favor of a long-term vision of sustainable growth, put investors on notice that he only welcomed those who shared his vision and still managed to generate returns totaling 290 percent over the decade he led the company.
“Too many companies are running their business into the ground, I would argue, by being myopically short-term focused on the shareholder,” Polman told Bloomberg News in 2017. “We’re going back to what it should be.”
Back in 2009, when Polman began putting forward a different vision of a company’s mission, talking about climate change and the challenges of sanitation in sub-Saharan Africa, he was an outlier. Today he is joined by hundreds of companies globally that take seriously the goal of sustainability, who are willing, like him, to support their brands taking stands.
Going for big, audacious goalsThe centerpiece of Polman’s vision of a “truly purpose-driven company” is the Unilever Sustainable Living Plan, launched in 2010, which sets out to decouple the company’s growth from its environmental footprint, while increasing positive social impact. Three big goals underpin the plan: improving the health and well-being of more than 1 million people; reducing the company’s environmental impact by half by 2030, and enhancing the livelihoods of millions of people.
It was a bold plan when first announced, and in fact, the environmental goal proved too ambitious and was later aligned to the 2030 target date of the United Nations Sustainable Development Goals (SDGs). Its Sustainable Living brands, however, grew over 50 percent faster than the rest of the business and delivered more than 60 percent of Unilever’s growth in 2016.
Still, Polman kept his focus on the big picture, and the need for collaboration, as reported in TriplePundit: “What we’re now dealing with are enormous challenges of poverty or climate change; sustainable growth in its broadest sense; equality . . . That requires a broader level of partnerships.”
Debating the legacyUnilever’s record under Polman was not wart-free. The company received its share of criticism, from opposing GMO labeling to unsavory labor practices in a Vietnamese factory. In the latter case, Unilever pledged to change how it organizes its Vietnam operations, including organizing human labor rights training for all its internal business stakeholders, factory leadership and key suppliers.
On the GMO issue, Unilever stood by its position on GM crops, stating that science and technology, used in a responsible manner in agriculture, could help meet the world’s long-term food needs more sustainably.
Unilever had also sued Hampton Creek over that food startup’s description of its vegan spread as a version of “mayonnaise” - though it eventually dropped that lawsuit.
Yet examples of sustainable innovation far outshadow these criticisms. For example, the company led initiatives like drip irrigation projects for soybean farmers that save water and reduce the need for pesticides. Unilever also launched factory eco-efficiency programs that save 200 million euro annually and create 1,000 jobs.
“In a volatile world of growing social inequality, rising population, development challenges and climate change, the need for businesses to adapt is clear, as are the benefits and opportunities,” Polman has said. “This calls for a transformational approach across the whole value chain if we are to continue to grow.”
As Polman’s legacy is discussed and debated, those who come out on the positive side seem to outnumber those who are more skeptical.
Colin Mayer, professor of management studies at Oxford university’s Saïd Business School, said in a 2016 profile of Polman in Financial Times that he believed Polman’s contribution will be long-lasting: “He has demonstrated immense courage and vision in promoting a concept of the purpose and function of business that initially met with considerable resistance, bordering on hostility, from several quarters.”
Turning over the reinsAlan Jope, currently President, Beauty & Personal Care, will take over as Unilever’s CEO, effective January 1, 2019, with Polman supporting the transition process during the first half of the year. It was a transition for which Polman had long planned. In an interview in Ethical Corporation in May, he said, “It’s good for Unilever to have change at some point in time. There will be people who are better than me. From the day I came in here, I worked on my succession. That’s my responsibility as a CEO.”
At the same time, Polman appeared to have lost none of his earlier passion. As he told Ethical Corporation, “I have a lot of energy in the job because I am mission-driven. What Unilever is doing fits with my values and my purpose. So I feel very happy here. I don’t feel I’ve been here 10 years. I feel like it’s my first day in the company and there’s a lot to do.”
Where Polman will direct that energy now will be interesting to watch. For now, he seems ready to let the Unilever he built over the past decade continue on its journey of creating long-term value that doesn’t come at the expense of the planet.
Reminding Bloomberg of his approach during the 2017 interview, he asked, “Do we choose to serve a few billionaires, or do we choose to serve the billions? Over time, I think the billions will win.”
Image credit: World Economic Forum/Wiki Commons