Weekly Blog #69 - "Is the world better because your company is in it?"

Updated: Nov 12

This is a rather thought provoking question. I borrowed it from an article published recently in the Harvard Business Review (Issue 2021/09). This article is written bei Paul Polman, a former manager at P&G, Nestlé and Unilever, and Andrew Winston, one of the world's most widely read writers and thinkers on sustainable business.


Polman and Winston are writing about the so called Net Positive Manifesto. According to the authors, net positive means that a company is ‘improving well-being for everyone they effect – every product, operation, and stakeholder, including future generations and the planet itself’.


Besides the fact that the authors promote their new book ‘Net Positive: How Courageous Companies Thrive by Giving More Than They Take’ (please find a link to the article and the book below), Polman and Winston make a strong case for why it is important for companies to leave the traditional idea of corporate social responsibility behind and focus on a new approach that focusses on a company’s purpose and overall impact on the planet. They state that the current efforts businesses take to address global challenges such as climate change are inadequate and that it requires a new approach to Corporate Social Responsibility, which is traditionally characterised as doing good for society and participate in philanthropic efforts, while being guided by and adhering to external moral obligations. However, many of these actions are only taken in order to achieve higher shareholder value.


Emphasising the necessity to change, the authors state that net positive companies will not only avoid existential risk by making themselves vulnerable to increased public criticism for socially and ecologically irresponsible businesses - they might also profit from an opportunity to globally unlock ‘trillions in value and create hundreds of millions of jobs’ by meeting the UN’s Sustainability Development goals, according to a two-year study by the Business and Sustainable Development Commission.


Four core elements or 'critical paths' are described throughout the article in further detail. According to Polman and Winston, these steps are crucial in becoming net positive. I would like to give you a brief introduction into the four paths subsequently:

  1. Operate first in service of multiple stakeholders.

  2. Take full ownership of all company impacts.

  3. Embrace partnerships and work with critics.

  4. Tackle systemic challenges with net positive advocacy.

PATH 1 - "Serve Stakeholders, Then Shareholders"

While many companies have embarked on their journeys towards carbon positivity and other planetary goals, consequently putting stakeholders first has yet to be achieve. Looking at how money is currently being thrown at companies on the stock market, it is obvious that we are still in an 'era of shareholder obsession'. However, companies traditionally followed a more stakeholder focused approach, typically derived from a company's purpose to serve. Recalling the old days of stakeholder-centricity, Polman and Winston suggest rethinking shareholder value as an outcome of stakeholder-centric initiatives.


One way of doing this is by identifying and initiating purpose-led brand initiatives, such as Unilever's Lifebuoy Campaign in cooperation with UNICEF. Unilever - led by Polman for over 10 years - provided millions of soap-bars to support the campaign. The goal was to teach kids and soon-to-be mothers how important basic hygiene like washing hands is to reduce easy to prevent but potentially life-threatening diseases in different parts of the world. I highly recommend reading more about this campaign! The key message is that Unilever was able to reap profits through purpose-led brand initiatives by intertwining company goals with social problems.


PATH 2 - "Taking Ownership of All Company Impacts"

The second path aims at rethinking how companies can take more accountability for their impact on people and planet. Polman and Winston argue that companies traditionally focus on externalizing cost and internalizing profits without considering environmental and social consequences. These are typically characterized as ‘beyond their control’.


Today stakeholders increasingly encourage companies to reconsider their codes of conduct by reminding them of their impact on our daily lives - while also expecting them to be able to evaluate and measure said impact. As a part of this process, it must be understood how much accountability an operation can take for shared global challenges. It obviously would be foolish to assume a single person or company, no matter the influence or size, can take full responsibility. Yet it seems similarly absurd to refuse any accountability.


PATH 3 - "Embrace Partnerships and Work With Your Critics"

The third path focusses on how companies can engage in partnerships – especially with critics – to take on bigger challenges that lay outside their individual control. The authors state that ‘when companies partner with peers on low-risk efforts that make everyone more efficient and sustainable, they create space for tackling harder, more systematic problems.’


The article especially promotes the act of closely working together with sceptics and critics. Civil society’s help has always been crucial for companies in different ways. With today's advancements in technology, the possibility to rapidly exchange information and the vast availability of data to identify and react to emerging trends, cooperating with partners and critics outside an organization can work as an early warning system for nascent challenges while inviting sceptics to openly discuss issues can build valuable relationships and trust.


PATH 4 - "Change Systems with Net Positive Advocacy"

Whereas the first three paths focus on what must change within a given system to become net positive, path four focusses on what can be done to change the system itself. The authors promote an approach to actively participate in the design and adaptation of policies and regulations instead of solely adhering to them. When businesses openly and transparently approach governments and policymakers to improve the rules and help them to reach their own goals, larger problems can be solved in a combined effort. This also promotes trust on both sides and earns companies a seat at the table when bigger issues are being discussed.


Google is used as a positive example. At Google, the carbon-positive issue is tackled by aiming at being carbon-free every operating hour of the day instead of offsetting emissions retroactively. This means that Google attempts to use 100% renewable energy whenever plugging into an electric grid – and therefore advocating for a full-scale transformation of electric grids in general. The key message is proactivity: ‘Net positive companies propose solutions rather than wait for (or complain about) regulations that tell them what to do’.

CONCLUSION - 'Net Positive Purpose'

It is no secret that every company has a reason for being - a purpose. And - according to the authors - purpose can help approach the challenging goal to become net positive. While Unilever’s first mission statement from the 1890s stated ‘to make cleanliness commonplace and to lessen work for women’ the updated version 120 years later vows ‘to make sustainable living commonplace’ which is firmly grounded in its original purpose and values. Surely not every company has comprehensive historical records of what its initial purpose once was to what it is today and even the current reasons and intentions behind a business might not be clear to everyone in the organization. Yet identifying a company’s purpose in the light of today’s planetary challenges can be inspiring and act as a trigger for understanding a company's responsibility towards people and planet.


In summary, the authors promote a paradigmatic shift that requires thoughtful and persistent work. Their claims and proposed solutions can appear somewhat idealistic and in conflict with traditional ways of conducting business. Nonetheless, while solving any of the bigger planetary issues is a task that requires long term engagement, the urge to act from a practical and moral standpoint is clear and initial success stories emerge. Therefore, the core messages of ‘The Net Positive Manifesto’ should at the very least serve as a starting point for immediate reflection.

Here is a link the the HBR article:

https://hbr.org/2021/09/the-net-positive-manifesto


And a link to Polman and Winston's book:

https://store.hbr.org/product/net-positive-how-courageous-companies-thrive-by-giving-more-than-they-take/10496


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