Paul Polman - The time to act is now

Thank you. Hi, everybody. We are thrilled today to welcome Paul Polman to Oxford. As you all know, Paul is the CEO of Unilever and has been since 2011. He started his career at Procter& Gamble for about 27 years, then moved on to Nestlé, and then to Unilever. We know him as a tremendously successful CEO, but more than that, he's run Unilever in a particularly important way. in a way that respects not only people and profits and planet— not only profits, but people and planet. He's a tireless advocate for a number of causes. He's the chairman of the World Business Council for Sustainability, UN Panel of Eminent Persons on the Development Agenda. He's an SDG advocate, but also a critic and says it doesn't go far enough. And now let's— for those of you who are MBAs in the room, Remember when we talked about at the beginning of the year, if we were gonna fill in the sentence, Oxford Saïd is the blank of business schools, how would we fill that in? I think we talked about this. Is it the Goldman Sachs of business schools? Is it the Microsoft of business schools? Is it the Uber of business schools? And what we concluded when we were together is that our aspiration was to be the Unilever of business schools. And so that's how we described ourselves, Paul, under your leadership. And with that, could we give a rousing, fully rousing applause for our guest, Paul Polman? Thank you so much.

Good afternoon, everybody, and thanks for the opportunity and thanks for the kind words, Peter. I have to have one correction, though. I actually started in 2009, not 2011. But I recognize that my first 2 years of CEO, I must not have made an impact. That's— but anyway, thanks for the opportunity here. We're actually here with our whole management team. I decided sometimes it's really good to get some oxygen and take a day off or 2, and that's exactly what we're doing here with our leadership team to actually see what the next steps on our journey are. The gap between act and do is obviously always there. We set the ambitions very high that we feel ourselves uncomfortable. And it's time that we set these gaps again a little bit higher now that we've achieved a lot of these things. So as you can imagine, now my leadership team is very uncomfortable. And they said, you know, we need to have some frank discussions and it's better that you're not in the room. So they kicked me out and that's why I'm here. But that is what they're doing. And hopefully in the next 2 days we come out with something that energizes us even more and and help sharpen our strategy for the next 2 days and no better— for the next few years. And no better place to do that than at this university and getting some oxygen from all of you and drawing on the enormous strengths and capabilities that are here. I also applaud you having chosen the university and the Saïd School. And from my several interactions that I've had over the last few years, I'm impressed really with How you bring the more, the different disciplines together, bring humanity into education. Come here really as a goal to better the world and have an impact that goes broader than your own small circle or your own self-interests. I just always remind people very simply that we are a lucky bunch. You're a lucky bunch to be sitting here, to be in education, to be in a great institution like this. You probably had a choice and you chose this. Many people in the world don't have a choice. Many people in the world don't even make it past the age of 5, or many people in the world don't speak other languages that you do. In fact, you belong to the lucky 2% of the world population, if you believe it or not. Might be hard to believe if you live in a bubble like this and you feel very happy as a student. But then it's simply your duty to put yourself to the service of the others. We cannot make this world function for any and all of us if we don't make it function for everybody and don't leave anybody behind. And that's the essence, obviously, of the Sustainable Development Goals. I'll go and talk about, but the most important thing is that we get young people like yourselves, that we get educational institutions and all moving in the same direction with the same weight. It's a great world to be born in, there's no question about it. If I would have a choice, I'd be born today versus when I was born. Today, actually, more people are in education than at any time in human history. Life expectancy is higher, more people have access to education. Sorry, to healthcare. More people have access to clean drinking water. Believe it or not, for the women in the room, more women are participating in the global economy now. There are, despite what you read in the papers, more rights that people have in this world. It's actually a fairly good world to be born in. In fact, when Kofi Annan, at that time the Secretary General at the UN, started the Millennial Development Goals, take yourself back to the year 2000 and the issues that were there in 2000. It looks a long time ago. They decided that with 8 simple goals, we would halve the number of people living in poverty in the 15 years from 2000 to 2015. And lo and behold, we have achieved that. Never ever have we lifted so many people out of poverty. And obviously China has been a big part of that, but also in many other parts of the world. And many of the goals that we've set then, they might not have been refined, and they were obviously the topics of the day, like HIV/AIDS was a big thing at that time, so they had specific goals. But many of these goals have been achieved. In fact, poverty at that time was defined as $1.25 a day, which you would agree with me is not very much. So despite all of that, though, I think we've come to realize, And it's enormous success, by the way, when that happens. We should be proud of that. But we've also come to realize, especially after the crisis, the financial crisis that we've seen, which then turned into an economic crisis, or in many places in the world, you might argue a governmental crisis. My argument will be at a separate occasion that it was probably more of a moral crisis. But what we have found out in the crisis now 10 years ago That, you know, when stock markets go up every year by 5 or 10% and everything grows, not many people ask themselves the questions. We become intellectually a little bit lazy when things go well. But then when the crash happened, we said, oh my gosh, why did this happen? What are we doing? And we found out, perhaps some people found out, not enough yet, that our system that we were operating under probably wasn't debt sustainable. We found out that it was supported with heavy levels of government debt or individual debt. We found out that it was based on a consumption pattern that really challenges the world's planetary boundaries, overconsumption. And more importantly, we found out that it actually also left too many people behind. And I would argue here in front of you that any system where too many people feel left behind or too many people feel that they're not participating in will ultimately reject against itself. We can agree or disagree, but the Occupy Wall Street movements, which didn't have the time yet at that time, or the social revolution that we saw, the Orange Spring that came from Egypt at that time, or the Brexits or Trumps, Catalonia independence movement and all that, are all signs of that dissatisfaction that people have. In fact, if you now look at the surveys that are coming out from Edelman, for example, on the US, only 15%, and I deliberately picked the US, which is sort of a stalwart of our ultimate example of capitalism, but only 15% of US people believe that capitalism is working for them. And not surprising, not surprising. So on the one hand, it's the best of times, as Dickens said in his book The Tale of Two Cities. On the other hand, it's actually the worst of times. If you look at some of the bigger challenges that we have that we need to solve, and I limit myself to a few of them that we do need to solve if we want to live in a better world, and then we'll go quite rapidly into some of the potential solutions and where you come in. and why it's so important that you're doing here and how you're going to live the rest of your life. But one of the biggest challenges obviously is planetary boundaries. Johan Rockström runs the Resilience Institute. He's about to change the job, but he runs the Resilience Institute now in Stockholm. Some of you might have heard about it. Yes. He talks about 9 planetary boundaries that define the health of the planet Earth. And unfortunately, 4 of these 9 are already exceeding what you might call minimal acceptable levels. Obviously climate change, I don't need to talk too much about that, but climate change being the most important one. In the US alone last year, there were 16 natural disasters above the normal pattern that had damages of more than $1 billion. In fact, the natural disasters that you saw playing out in Texas and Florida last year have cost the US economy over $350 billion already. And yet they refuse to put in $5 billion of their contributions to the Green Climate Fund coming out of Paris. But climate change is a real issue. In fact, the World Bank, Jim Kim, estimated that at the current trajectory now again, we are pushing about 100 million more people into poverty. Because of climate change. We have 126 million displaced people in this world. Lots of the tragedies that you see played out every night on television might explain some of that, but most have their origins in climate change. In fact, some would argue if you go back and Google that yourself and you look at the Syrian crisis that is still obviously not solved, had its origins in droughts and climate change with too many people moving to the cities, which then caused the spark to ignite it. The other key element of climate change, as you see, is Paris did a good job in getting an agreement that probably was more than anybody expected. We should be very happy about that. We bent the curve from about 4 degrees at that time, the trajectory that we were on, to 2.7 degrees by the calculations that we all did. But there was a provision in Paris Agreement that starts to take hold in 2018 onwards, which says no backsliding, you could call it that way, that whatever was proposed in Paris, which was all voluntary, these independent nationally determined commitments, INDCs as they were called then, were voluntary commitments, which was a masterstroke because every country participated. And because every country participated at different levels, there was a floor, which actually was better than any agreement on climate change that we've had before in the world. And now in 2018 would be the first round to move it forward. It's absolutely crucial. So the fact that the US has announced, because they've not gone yet, to go out of the climate agreements, or that Poland will be the next one leading the global discussions is not very encouraging. So that's why we need to up the ambitions and make our voices heard and actively participate in that. Climate change is our most burning issue, but it is in the broader range of planetary boundaries. In fact, Hubert Reeves, who is a philosopher in Canada, he said it very well because Hubert Reeves said, man is the most insane species. He worships an invisible God and destroys a visible nature, not realizing that the visible nature he destroys is the invisible God he worships in the first place. And that is probably what we are doing as we sit here. Nature doesn't negotiate. When people talk about the balance between man and nature, there isn't. The number of natural species that are disappearing right now in terms of biodiversity is 1,000 to 10,000 times more than what we have seen in the normal historical patterns. There's something happening to our planet Earth. And people might say it's a battle between man and nature. Nature will win that battle. It's even ridiculous that we position it or talk about it as a battle. We might soon become one of those species that is extinct, extinct, and then it will take Mother Nature about 150 years, 200 years to restore to its original beauty. We need to live in harmony. Challenge number 1. Challenge number 2 is not a surprising one. Peter is about to catch his plane. To China, and it's a symptom of how the world has opened up, how the world has moved south and east, and one of the main reasons for this poverty— lifting so many people out of poverty. But unfortunately, as the world has become more global, so have the issues that we need to deal with: the financial markets, privacy, climate change, These are global issues that cannot be managed on each individual country level. Unfortunately, the governance that we've put in place to historically rule this world successfully is really a governance mechanism that dates from 1944, which was Bretton Woods. In 1944, the world was quite different. In fact, 80-85% of the world economy was in Europe and in North America. So these institutions, be it the OECD or the WTO or the IMF or the World Bank, very much reflect still today what the world was then. And as a result, has become less effective. You see others creating other institutions. You see issues not being addressed anymore that should be addressed. You see representation in these institutions that doesn't reflect the true representation that should be there in terms of the way the world is now structured. So challenge number 2 is that global governance is obviously at a challenge. So that's what I would call the first challenge is the planetary boundary challenge. The second challenge is really who's in charge. And that has major repercussions because the private sector and any others were usually dependent on a well-functioning elected representation where people that then were knowledgeable would represent us in a way that was responsible. And if that wouldn't happen, we would change these political parties. Now politicians are outsourcing their responsibilities. A good example is the Brexit vote in the UK. It's a tragedy for democracy in my opinion, but you also see that countries increasingly are falling back to their own little shells and protect their own interests and have forgotten that it is much better to start first addressing these issues of the common goods. That we have far more in common as individuals, yet we tend to dwell and exaggerate the differences. And some of us rejoice in that. The third challenge is one of short-term versus long-term. The issues of climate change, of food security, of poverty, job creation, youth unemployment are challenges that cannot be solved with the myopic focus on quarterly profits. And yet we've created a financial system that is increasingly self-serving versus its origins to be a means to an end. The financial system was never meant to function by itself. It was meant to help make the real economy function better. But yet it has taken primacy versus servancy. And that's a big issue. In fact, if you look at all the financial institutions— call them banks for this discussion to make it simple— only 15% of their lending is to the real economy. It doesn't make sense to me. We have created— we have a real economy of $100 trillion. We have created financial instruments of about $400 trillion. It's not surprising that for the first time in the US, for example, last year companies spent more on special dividends and share buybacks than they spent on retained earnings to put it in the growth of their companies. It is more profitable now to play the financial market than to run the real economy. It's not good. It's one of the reasons we don't see the growth. It's one of the reasons I believe we don't see the job creation. So we need to move the financial markets to the longer term would be challenge number 3. The— Good thing is, and then, you know, I could talk about one other challenge, but I won't because you are probably more first in it than others. But that is really the challenge to create a more inclusive economic growth. Because of the financial system providing now the economic benefits of growth, Oxfam, which by the way started here in Oxford, Oxfam, This year at the World Economic Forum, again, published their famous study, which showed that 82% of the total growth of the world economy had only gone to 1% of the world population. It also showed that 8 people, 8 people, have the same wealth as the bottom 3.5 billion people. In a system where the economic returns is removed from the real economy, i.e., in the financial market, less and less people benefit from economic growth. 1 in 8 people, the same wealth as the bottom 3.5 billion people. So a challenge is to create an inclusive growth is a very important thing. Technology obviously, on the one hand, tremendously energizing, helps enormously, but technology also has increased that divide. The 4th industrial revolution that is coming, artificial intelligence, robotics, Internet of Things, is going to be marvelous with a lot of things that people will celebrate. It's great that you can send now a drone into the Alps when I get a heart attack and I can self-administer my shock. I'm not sure how to do it, but that's what the theory says, and I'm alive again. So I like technology if it can keep me functioning a little longer. But at the end of the day, it's going to be the biggest wave of job destruction that we've ever seen in the history of human mankind. And it's coming at us very fast. In fact, in US heartland, where everybody had a job, where everybody actually had decent wages to some extent— I mean, could always be better, I agree with that— people were voting for the Trump phenomenon, if you want to, out of the anxiety or fear of being left out or their children left out in the future. One of the main reasons of the mental health issues that we have in this world, which are obviously, unfortunately going up in any place in this world— this country, a male committing suicide every hour. Every day someone jumps in front of a train in this country. It's because of the anxiety of not being able to keep up with that fast pace of change, technology being one of them. Technology also has other consequences, as you have just read. Yesterday in the papers on Cambridge Analytica, or how it tries to take the mind away from us and makes us slaves of basically the information that we get, how it polarizes us by targeting just our information and self-reinforcing it so that we become incapable of discussing with each other. To the point that average American in the US right now, they send around about 1.5 billion likes a day. to each other on Facebook and all the other sites, but they only have one real person they can talk to. That effect of technology has serious consequences that we need to address. Now let's go to the potential solutions. At a time when it seems that nobody talks to each other, that nobody likes each other, that families are splitting up because they're in or out, We actually have 193 countries in the world— I stand corrected, 196 countries in the world— that came together in September 2015 at the UN and signed what is now called the Sustainable Development Goals. These are 17 goals, 169 targets. I know it's a lot. It is a little bit overwhelming, but it's a big world that we need to manage. To get that down into a moral framework at the time that there is no global governance and no ability to come up with something else and better deserves our fullest support. It simply has a goal to finish the job that had been done over the last 15 years. Remember, I told you we halved the number of people in poverty over the last 15 years. Why don't we finish the job? When the Apollo went to the moon, It didn't stop halfway either and said, let's go home now. We'll try again next time. When Eugene Bolt ran the 100 meters, ah, let's stop at 50 because I'm kind of tired. Next time I'll try the 100. No, he finished it. When you go to a wonderful concert of Coldplay and you've paid your ticket, you're excited, you bring your family there, how would you feel if they stop halfway between a song and, okay guys, it's time to come home? See you at the next concert. We need to finish the job. And the job is a very simple one, as it is laid down in the Sustainable Development Goals. It simply talks about irreversibly eradicating poverty in a more sustainable and equitable way. It's a plan of leaving nobody behind. Obviously, it talks about our planet. It puts people right in the center. It talks about prosperity for everybody. Peace is a big part of that, goal number 16. And then it is heavily dependent on partnership. It's the famous Einstein definition of insanity, to try to do the same thing over and over again and expecting different results, applies also to the Sustainable Development Goals. An African proverb says that if you want to go fast, you go alone. If you want to go far, You go together. And this fairness of going together to solve this humongous challenge that we have out there together has to be done in partnership. Not just a partnership of your and my contract, or how can I be a little bit better off by screwing you a little bit, or perhaps you try to do that with me. No, it's a partnership for the common good. It's a partnership that starts with respect and dignity for each and everybody in this world. An opportunity to have access to education, the chance to make it past the age of 5, to find a job, to get your dignity and respect, just like we all would expect that for ourselves. It's a partnership that deals with communities in which we operate and work, and a partnership that thinks intergenerational. It is mind-boggling to me, absolutely mind-boggling to me, that in the last 20, 25 years, we've done more damage to this planet than in its 5 billion years of existence. I just simply ask the question, what gives us the right to do that? Often I get a question, why would you run your company in a way where you have zero waste or where you have zero carbon emission? And I've come to the point already some time ago That I really say, I don't really want to answer that. I really think you should ask those companies that don't do this. Why do they waste the scarce resources and take them away from future generations? Why do they pollute the air so that 8 million people a day— sorry, a year still die of air pollution? What gives us the right to do this? We're about to commit probably the biggest intergenerational crime in the history of mankind. And the young people know that. They realize that. That's why it's so important to give you a seat at the table. At Unilever, and this is the first and the last time I talk about my company because frankly it's the least important to me, but at Unilever we simply said we want to decouple our growth from environmental impact and we want to increase our overall social impact. We said we don't want to do that just in our own operations, what people call conveniently CSR, corporate social responsibility. The offers, your factories, your transport. No, we want to do that in the total value chain because we don't believe that by outsourcing your value chain like most companies do, we don't think it's right to at the same time also outsource your responsibilities. That doesn't work. If you're in the food business, you need to be equally responsible for fighting the issue of deforestation. Last year, by the way, up 51% despite the Paris Agreement. Deforestation provides 28% of the global solution to climate change, and it only gets 3 to 4% of our attention right now. We cut the size of New Zealand last year. In fact, many of our forests that were historically carbon sinks are actually becoming carbon emitters. So it's a scary thing that is happening. As long as we see the value of a dead tree higher than a tree that's alive, we frankly are in trouble there. So we said, let's take that responsibility of the total value chain. That means that we have to take co-responsibility of stopping the deforestation. Being sure that we provide sustainable agriculture, that we attack the issues of food waste, that we also work on the other hand on the scale on the issue of obesity, which is probably the biggest epidemic that this world is going to see with diabetes 2 and all the other things. You cannot escape that. We are in 190 countries in the world. We reach 2.5 billion consumers a day with our business. More than any government will ever do in this world. It came about because we had a lot of liberty. We were fortunate to be the product of 2 great colonial powers, if you can call them that way, the Dutch and the Brits. We've been in most of these countries for 100, 150 years and built tremendous businesses, 60%, 70% in the emerging markets, bigger than all of our competitors combined. But with that liberty, as Viktor Frankl in his book Man's Search for Meaning very perceptively wrote, he said, when they built the Statue of Liberty on the East Coast of the United States, they forgot to build the Statue of Responsibility on the West Coast of the United States. You cannot have liberty without responsibility. So we take that seriously. And it's not only about the economic and the environmental part, it's also about the social part. We all got woken up by the Rana Plaza. Many of us have not forgotten that. 1,050 innocent women lost their lives. They knew that they were going into a factory that was about to collapse. The cracks were on the wall. They were paid $0.11 an hour, the lowest in the world, by the way. Vietnam at $0.26 an hour. It's about as close as you can get to modern-day slavery. They didn't have a choice. Why didn't they have a choice? Because we thought it was cool to buy a $1 t-shirt. The social compliance is going to be an enormous important thing in which you will judge your companies, or if companies will succeed or not longer term. We said we need to create 5 million jobs or livelihoods for women. We need to create 5 million jobs for smallholder farmers. We are rolling out, have rolled out, the RUGBY frameworks across our total value chain. Social, environmental, and economical all go hand in hand. John Elkington's triple bottom line was probably the beginning of that. It starts with putting your own house in order. I don't think you have any rights to tell people what to do if you, don't do the things yourself. To be trusted, you need to be trustworthy. So we work very hard to make our value chain sustainable. We work very hard to create the jobs for smallholder farmers. We work very hard to take carbon out of our value chain. We run our factories at zero waste, as I mentioned. So in many of these areas, we're pushing the boundaries. Interestingly, as we do that, which is uncomfortable sometimes, which requires you to deal with trade-offs that you haven't dealt with before, You are treading new paths, you're making the dust that has not been made before. It's sometimes scary, but we find each time we do that, and anytime we do that, we find we get the benefits from that in reputation, in lower cost, in a highly engaged workforce, and increasingly in finding opportunities by addressing these issues to grow even faster. Then once you get your own house in order, you obviously go into your value chain because these are all your suppliers, these are your partners. We've put in some responsible sourcing codes trying to lift them up, but you can find out then if you work in your value chain, you can achieve much more. Often 1 plus 1 is 11. You really get impact that makes you feel proud, that brings a little bit more purpose and meaning to life. And you can see the differences. Bringing a whole consumer goods industry together, the major retailers and manufacturers, and saying as of 2020, recognizing that you need a little bit of time, but as of 2020, we will not sell anything anymore that comes from illegal deforestation, or to move all your ice cream cabinets or Coke and beverage cabinets, if you call them that way, to natural refrigerants. You discover that by leveraging the scale of your value chains, you can actually have— make a difference at impact. And then if you move beyond that, you'll get to the ultimate level of what I call the leadership, or where you should be as a company is to drive transformative change beyond your own interest. The true moment of leadership in life is when you discover it's not about yourself. When you truly discover that by putting yourself to the service of others, you yourself will be better off as well. It requires you to be a human being. It requires you to be connected. It requires you to have a certain level of empathy. And care for the people that unfortunately found themselves in a situation that they couldn't care for themselves. The ultimate role for companies where, where I'm sitting is to drive changes beyond your own self-interest. It is clear that in the absence of global governance that I talked about, that companies cannot be bystanders in a system that gives them life in the first place. Companies have to provide these solutions to these bigger challenges. There's 60% of the global economy in emerging markets. There's 80% of the financial flow. There's 90% of the job creation. Take for example the Sustainable Development Goals. To implement the Sustainable Development Goals, we reckon that we need to have about $3 to $5 trillion a year to implement them. Again, sounds like a lot to me as well, but it's 3 to 5% of the global economy. It's not much. For 3 to 5% of the global economy, we can eradicate poverty. But the overall level of ODA, overseas development aid, of all the governments combined, the famous 0.7%, for which I'm grateful that the UK is sticking to that, is only $160 billion. $160 billion, $3 to $5 trillion. We need to use those billions to unlock the trillions, otherwise it's not going to work. So we have to get the financial sector, the private sector involved in the Sustainable Development Goals. For that reason, we asked Mark Moloch-Brown, who had worked at the UN as Undersecretary, to put this commission together, which we called the Commission for Business and Sustainable Development. Because I recognize that the ability of CEOs to remember more than 3 things is difficult nowadays. Right. Nothing to do with the CEOs. It's just how our brain is wired. And here you have the 17 goals and 169 targets. So we boiled this down and we looked at 4 areas only: mobility, cities, food and land use, and health and well-being. And just in these 4 areas, we saw an opportunity with the Sustainable Development Goals of $12 trillion and a job creation of 380 million people. It's a wonderful business plan. And because we have waited so long, unfortunately, let's take the positive side of that. Because we have waited so long, we've come to a point where the cost of not acting is actually higher than the cost of acting. This is kind of bizarre that that is the case, but fine, let's make use of that. That for the ones that don't have that moral compass to move themselves forward and go on this journey of a little bit more risk, Perhaps those people will see the economic benefit, which still is a main driver of the economy, and make us move a little bit faster. It's starting to work on climate change, as you have seen. But look at the numbers. It's quite striking, actually. 800 million people still go to bed every day hungry, not even knowing if they wake up the next day. Yet we have the audacity to waste 30 to 40% of the food that we produce every day. with all the environmental consequences related to it. To feed those 800 million people only cost us $70 billion. $70 billion for food waste that actually is about $700 to $800 billion, the 30%, 40% of the food that we produce. 10 times more we're willing to waste than to invest to solve the problem in the first place. How much do you think this world spends today on conflict prevention and wars? Can anybody just make a guess if I might make this a little interactive? How much do you think we spend? Don't worry, chat from mouths rules. Make a guess. How much do we spend on conflict prevention and wars in the world that we currently live in? Are we all living on the same planet or are you thinking about other things? So make a guess. $30 billion. Sorry? A billion. A billion? A trillion. A trillion? 30. Global economy is $100 trillion. So we have a trillion, we have a billion. That's okay, don't worry. One other one. $50 billion. $50 billion. Okay, the answer is 12 to 14% of the global economy, which if it's $100 trillion, is $12 to $14 trillion. That's just conflict prevention and wars. Whilst implementing the whole Sustainable Development Goals is $3 to $5 billion— trillion dollars. $3 to $5 trillion just on one. Any goal, food security, that keeping women— giving women and girls the same access to education, to land rights, to finance as we just take for granted would unlock the global economy by $28 trillion according to McKinsey. Just stopping the issues of stunting, which is poor children who don't even— who aren't in control of anything yet in their first 1,000 days of life, giving them enough nutrition to have the normal brain development. 160 million children are deprived of that every year. Sub-Saharan Africa, parts of India. It takes away 10% to 12% of their economies. Any Sustainable Development Goal has a payout of 1 to 10, 1 to 15, whatever you want to look at, to implement the Sustainable Development Goals. And here we are, like frogs in a little bit of a pan, like deer in the headlights, paralyzed to act. The cost of acting is significantly cheaper already now than the cost of not acting. So what does it take us to move? Why aren't we moving? Why do we still rejoice in giving ourselves the label of most intelligent species on this planet? Frankly, we don't deserve it as far as I'm concerned. So a few things need to happen. Firstly, our politics have become very short-term. They react to symptoms and rules and laws and regulations come out of that. And very seldom have the time to go to underlying causes. We have a little bit more time, also in the private sector. We've been around— this is our 3rd century. We'd like to be around for a few more centuries. I think not about my tenure. I think what this company will be 10 or 15 years after I leave. So think about some of these underlying causes and change the boundaries. If you change boundaries, people will behave differently. People in essence are good. Don't take anything out of my talk that I doubt the goodness of people. I believe inherently in the goodness of everybody that is here, all having a diamond that can shine. But somehow we don't behave like that because the boundaries that are put upon us make us behave a certain way. For example, if I tell all of our salespeople, you get rewarded by the number of sales orders you write, you're going to write a lot of orders. One little cosmetic here, one little bar soap there, one little deodorant there. If I tell you, you get rewarded on the total sales you produce, you're going to probably be more efficient. So boundaries decide our behavior. So the first boundary we need to move is to move out of just calling capitalism only optimizing the return on financial capital. We are very good at that, so capitalism works. But if you move the definition to also include social and environmental capital, Capitalists are the best ones to optimize it. So a price on carbon would be a very practical, good step. We measure and we treasure. So move the definition of accounting to include environmental and social. Move the financial markets to the longer term. There is a fundamental difference between investors in companies and speculators. Now, I have my own opinions, but I don't have judgments against speculators. But they should not be treated like shareholders. It is absolutely ridiculous that someone who has a lot of money can just move in because they see an opportunity to make more money and try to destroy a legacy that has been built over centuries, where multiple stakeholders are being served and not just a few who want to earn more money. It's a battle between billionaires and the billions of people. So we need to define what that is. And interestingly, a lot of money in the financial market comes from all of us, the pension funds, the institutional investors. They have long-term obligations, so they should be looking at long-term incentives so that we get the space to address these issues. And by the way, they should invest in companies, as far as I'm concerned, that create a world that you can invest in, that you can retire in 20, 25 years from now. If you want to get a lot of return, But you then discover you can't retire in that wealth. Good luck. So we need to move the financial markets to the longer term. And then we need to get an economic system that is more inclusive. Difficult to do. But our economic systems were developed at a time that labor was scarce, so we taxed labor. When resources were abundant, so we didn't put tax on resources. Now we live in a different period. Can't help it. Now resources are scarce, so tax resources. Now labor, we need to be very careful that we make the employment of labor more attractive, so lower the cost of labor. So move our economic systems to a different direction bit by bit. It also requires, last but not least, a different contract, social contract for companies. It cannot be good sports to avoid paying tax. It cannot be good sports to participate in corruption. It cannot be good sports to treat people in a way that you never want to be treated yourselves. There's something about the Golden Rule that you find back in every religion. If you're Hindu, if you're Muslim, if you're Christian, or if you believe in Judaism, you all in your religions have the Golden Rule: do unto others as you would have loved or liked to do unto yourselves. Why not apply that in everything we do? Your business would be better, your lives would be better, and you certainly would be longer-term more successful. We have the answers to all of this. We don't need more PhDs, in due respect. We don't need to send more people to Mars. What we need is human willpower, which by the way itself is a renewable resource, so it's very attractive. So we need more leadership at the end of the day. We know today what we need to do to feed these people. We know today what is needed to protect these forests. We know today how we can move to a circular consumption system versus a linear consumption pattern. We have the answers. It's a matter of willpower. So it boils down to leadership. It boils down to all of us, if we care or not. If we don't care, you'll have the answer. But if we get enough people to care, we can make a movement. And it actually comes from the young. Look again at what has happened in the US with the terrible tragedy in the school in Florida and Fort Lauderdale. It took another tragedy. Normally, the NRA will immediately call for buying more weapons and giving more teachers weapons. A totally bizarre idea if you live in Europe, in my opinion. But that is how it goes. Now these students stood up, the same students who saw their friends being killed in front of their eyes and said, this is enough is enough. And they went after the Walmarts or the Deltas and others not to give discounts to the NRA anymore and to get rid of some of these perverse legislations that are still on the books there under the banner of the 5th Amendment or whatever it is, the constitution that they have in that country. It's young people that drive the change. We saw it in Paris. We saw it with the LGBT movement. We see it here now. But it comes from young people. It comes from young people. So what type of people do we need? We need people that are more purposeful, that are driven by a deeper sense than just the here and now. We need people that are systemic thinkers. The issues of water, food, energy is not so easy. It's like a little balloon. You push it, you try to contain it, and it pops up here, it pops up there. You need people that can think a little bit holistically about the problems in society and can distill that down to simple things and actions. You need people that can work in partnership. Many of us are not being trained on that. You need people that can think longer term. Clearly, we've not created enough of them with the average tenure of a CEO being 4.5 years now of a major Fortune company, and actually the numbers are going down. It clearly tells you that we haven't created enough of these leaders. Ultimately, you need these courageous leaders. So this is where you come in. Invest in leadership. Enormous networks happening out there. Enactors, Global Shapers, Ashoka Fellows, WE Day. One Young World, thousands of young people changing in their own circles increasingly broader the world. If we could connect those and create that movement for good, would be very, very good. The second thing I'm positive next to the youth, which by the way is especially women, because if you look at these qualities that I just mentioned, the female race, if you can call it that way, possesses these qualities more than anybody else. Peter Senge, who teaches at MIT, was looking once for me at some of the biggest humanitarian efforts in the world. We identified 11. 7 of those were led by women. Not surprising to me. The climate change agreements were done by women. Christiana Figueres would be a good example of that. So there is a book in the US that came out that is— the title of that book is The End of the Era of Man. I got a little bit worried when I saw that title. But there is some truth in that, I have to say. So you're well placed there. And we definitely need to cherish more women in the leading positions, including in politics. The second reason I'm optimistic is actually the internet again, because we live in the age of transparency. Every week you can now, every day you can open the Financial Times and you see a company that is caught with their pants down. And anytime that that happens, they lose 20%, 30% of their market value. You know, the age of transparency now. And you need that transparency because that transparency builds trust. And that trust is needed for prosperity. It's one of the reasons we publish everything and put everything on our websites. It really helps, I believe. And then the third reason why I'm optimistic is already what I've alluded to, is that the cost of not acting is going to be higher than the cost of acting, which even gets the guys who don't believe in it, and they're usually guys, get them to move. So I think we're at a good time, but we need the movement. We need the movement to accelerate. The direction is clear. What needs to be done is clear. We really shouldn't spend too much time on that. What we really need is now to accelerate at scale, and that's where you come in. It's the Dalai Lama who said it very well when the Dalai Lama said, if you seek enlightenment just for yourself on your own causes, you miss purpose. But if you seek enlightenment to help others achieve their purpose, others achieve their causes, you are with purpose. Put yourselves to the service of others. Thanks for your time and we'll open it up for some questions. Thank you.