Tag Archives: Unilever

An Unusual FTSE Boss

adam-and-paul-iv

Interviewing Paul Polman, CEO of Unilever

(I think my questions are sticking out of my back pocket)

Paul Polman is an unusual man for at least two big reasons. Most obviously, he is unusual because he is Chief Executive of one of the world’s biggest consumer brand companies, Unilever. But in many decades of interviewing senior executives he also strikes me as very unusual because of his willingness to engage in subjects of global concern such as environmental threats.

Much of the time of a CEO is spent trying to keep the support of major shareholders. Polman has been CEO for longer than most and it’s interesting therefore to know that in his early days running the company, rather than trying to keep shareholders on board, he spent much time trying to get rid of them. Many shareholders want short term returns, he told me. What he wanted was owners who were willing to look to the long term and so he tried to change the ownership of the company to those who would support those long term aims.

Polman appears to be a boss genuinely concerned about the environment and believes that companies can play a constructive role in helping improve it.  To that end he is tackling the problem of waste head on. Unilever says all of its factories now have zero waste – 600 factories globally recycling materials to create no waste at all, they say.

That’s quite a claim and something many believe is a model which others could follow,

The world produces nearly four million tonnes of municipal waste every day. If this trend continues, the daily amount is set to more than double by 2050.

CLEANER WORLD

GLOBAL WASTE GENERATION

2010                2020                2030                2040                2050

3.8                   4.1                   6.7                   6.9                   8.5

Unit: Million tonnes per day
Source: Hoornweg, Bhada-Tata & Kennedy, World Bank

 

2060                2070                2080                2090                2100

9.3                   10.2                 10.5                 11.0                 11.6

Source: Peak Waste: When Is It Likely to Occur?
http://onlinelibrary.wiley.com/enhanced/doi/10.1111/jiec.12165/

Looking over the river Thames on the roof of Unilever’s headquarters, Polman explained his corporate philosophy to me:

“Our role here is to look after the globe for future generations. Whilst we’ve been incredibly successful lifting enormous amounts of people out of poverty, unfortunately we’ve done it in a way that has resulted in quite a lot of over-consumption, acidification of oceans, plastic in oceans, air pollution, water pollution and frankly, leaving too many people behind.”

I asked him whether he felt it was too much to describe the environmental challenges we face as a crisis?

“No it’s not too much. Only 5% of packaging gets reused. So what we’ve now discovered because of population growth, this enormous level of consumption that has happened is that we need to move to a more circular model, where someone’s waste is someone else’s input.”

So just how is Unilever creating zero waste factories? One of its success stories involves a popular British food – Marmite. This savoury yeast spread is itself a by-product of the brewing industry – And now workers in Burton on Trent have come up with a use for the by-product of the marmite-making process.   They’re turning the sludge left in machines – which would previously have been washed away or been sent into landfill – into biogas.

That’s just one example of a different approach to manufacturing. I put it to Polman that this was rare. Indeed, perhaps it was an approach that other bosses shouldn’t take. After all their job is to make money for their shareholders who are trying to get a return for pensioners and their investors who need the company to make money rather than make an environmental statement.

He disagrees. He tells me that companies are corporate citizens who have a responsibility to lead change. But in leading change they don’t have to stop making money, indeed it’s just a new even more efficient way of creating sustainable profit.

He tells me “You have to believe in the goodness of people, which I sincerely do. You need to educate CEOs themselves to be able to verbalise to the financial community why it is important to invest for the longer term.”

One of the big challenges facing the world is sanitation, or the lack of sanitation. I asked Polman what companies like his do to help that?

“Yeah, it’s a tremendous opportunity actually” he says. “Despite the tragedy that 2.3 billion people don’t have access to clean drinking water or sanitation. We have set a goal to actually reach 1 billion people in the world with handwashing. The simple act of handwashing can cut infectious diseases like pneumonia, diarrhoea, by 75%. Currently we see every year 650,000 children die unnecessarily of these infectious diseases.

There’s over a billion people that don’t have access to sanitation in the sense of open defecation. Since our bleach cleaner Domestos is single-mindedly focused on building toilets, the brand is growing double digit.”

I asked him whether he felt such acts were part of the company’s charitable works – and he interrupts me before I’ve even finished the question.

“No, it’s not a charitable act for us. It’s an integral part. The more people have toilets, the better it is for Domestos. The more people wash hands, the better you sell your bar soaps.”

There are many in the world who try to make it better. There are many in the world who try to build companies, offer employment and improve economies. Paul Polman is a man who believes you can do both. Almost his final words, before we shook hands and left were these:

“We find out that every brand that has a strong social mission, because ultimately brands should be there to address issues in society, otherwise why should we accept them to be there? But the brands that have the stronger social mission grow at twice the rate of brands that don’t, and are actually more profitable as well. It makes good business sense.”

 

The interview and report on how to create a cleaner planet can be seen (only outside of the UK I’m afraid)  on BBC World News. For regular updates and behind the scenes pictures of our filming trips – follow @AdamShawBiz

 

 

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