Few people on the planet face more pressure and have their schedules more tightly packed than the CEOs of major corporations, so it comes as no surprise that Unilever CEO Paul Polman frequently voices his preference for action over talk. But while Polman runs a $54 billion global consumer goods company, the action he calls for on some of the most public stages in the world is for sustainability.
In June, Polman told the UN General Assembly that the world is making "incremental progress" on climate change and other sustainability challenges, when "we need transformational change."
"By 2030, the world population will have passed 8 billion. Without decisive action to tackle climate change, some estimate that in that time more than 100 million people will perish and global economic growth will be cut by 3.2%, directly or indirectly as a result of our carbon intensive development model," he warned.
Polman's focus on sustainable development has helped Unilever top the rankings of various corporate sustainability measures. It led the food, beverage and tobacco group in the 2014 Dow Jones Sustainability Index. And it was ranked first in corporate leadership according to an annual survey by GlobeScan/SustainAbility. Unilever was cited by 38% of experts, compared to 11% for Patagonia and 8% for Interface.
Both the urgency and the economic calculus contrast with many statements from businesses and trade groups calling for more gradual change in policies affecting energy use and the environment. For example, in the wake of the U.S. Supreme Court's ruling that the Environmental Protection Agency had overstepped its authority under the Clean Air Act, Ross Eisenberg, NAM's vice president of Energy and Resources, urged caution, stating, "We all want clean air, but we need policies that support a sustainable environment without handcuffing the economy and our nation's job creators -- manufacturers."
Is Polman a "radical CEO," as journalist Marc Gunther called him in a blog post last year? In at least one measure, Polman is very much a mainstream corporate chieftain -- that is, he sees growth and profit in the course he has charted for Unilever.
In 2010, Unilever announced its Sustainable Living Plan which commits the company to:
- Help more than 1 billion people improve their health and well-being
- Halve the environmental footprint of its products and de-couple environmental impact from growth
- Source 100% of agricultural raw materials sustainably and enhance the livelihoods of millions of people.
In May, Polman told a gathering of sustainability experts in London that brands targeted in some way to address global issues such as rising populations and climate change were not only meeting consumers' desires for "responsible brands," but proving more profitable.
"Our experience is that brands whose purpose and products respond to that demand -- 'sustainable living brands' -- are delivering stronger and faster growth," he said, referring to brands such as Dove, Lifebuoy, Ben & Jerry's and Comfort. "These brands accounted for half the company's growth in 2014 and grew at twice the rate of the rest of the business."
A greater focus on ESG [environmental, social and governance] is increasingly commonplace in corporate circles. Some 75% of the S&P 500 now produce an annual sustainability report, notes Hank Boerner, CEO of Governance & Accountability Institute Inc. The reasons for this attention to ESG, he says, range from scrutiny of federal government contractors to industry peer pressure to efforts to attract and retain young people. And in many cases, it includes Wall Street's efforts to manage risk.
"Investors are looking more and more at the ESG performance of a company," Boerner observed, noting that there will be increasing implications for access to -- and the cost of -- capital based on these measures.
Because the ESG issues are so wide-ranging and important to the strategic performance of companies, Boerner said, "These are all in the wheelhouse of the CEO." And that may be why Unilever's Paulson is less an outlier than a role model. Welcome to life in the S-Suite.
