Is the world better off because your company is in it? That is a great question, asked by Paul Polman and Andrew Winston in the latest issue of Harvard Business Review (Sep-Oct 2021). Paul Polman is a former CEO of Unilever, he currently chairs Imagine, a for-benefit organization that mobilizes businesses around the UN Global Goals; Andrew Winston is a speaker, writer, and adviser.
“Corporate leaders can no longer sit on the sidelines of major societal shifts or treat human and planetary issues as ‘someone else’s problem’”, they write. The age of externalizing costs and internalizing profits is over. If companies don’t contribute to society, society won’t accept them, younger generations won’t work for them and their business as usual won’t prosper.
They think that companies can “unlock lasting value and grow by helping the world prosper”. This is a new game that should be played to win, not to avoid losing. They advocate “net positive companies” that improve “well-being for everyone it impacts and at all scales – every product, every operation, every region and country, and for every stakeholder, including employees, suppliers, communities, customers, and even future generations and the planet itself”. They put the bar high. “No company has reached this lofty goal. But a growing number have begun the journey.” They acknowledge that this approach is a paradigm shift. “Taking full ownership of all your impacts is a revolutionary act; after all, agressively not taking ownership helped drive short-term profits over the past century.”
Purpose drives performance, the authors write. Companies should reward investors, but not be obsessed by them. Financial performance is “a result of running a business that serves others”, not a primary goal.
Polman and Winston give interesting examples in their article. Microsoft for instance has pledged to be carbon-negative by 2030. Moreover, it has set a retroactive carbon-neutrality goal: by 2050 it will remove sufficient carbon to compensate for all its emissions since its founding in 1975. Another example is Google. It wants to be operating carbon-free by 2030, not offsetting emissions by building renewables elsewhere, but using only renewables and energy storage on each site. “If the company plugs into a grid at all, that grid will have to be clean.” Thus Google is not only transforming itself but also encouraging a transformation of electric grids.
The HBR article is based on their new book Net Positive: How Courageous Companies Thrive by Giving More Than They Take, which has been published on 5 October 2021.