Sanger Leadership Dialogues: Paul Polman, former CEO of Unilever

Uh, Sanger serves, of course, as an important bridge between student learners and thought leaders by providing experiential programming grounded in research utilizing frameworks such as the Michigan Model of Leadership and the Sanger Leadership Journey. Our center's endowment enables us to provide programming that's unique to Michigan Ross, whether a student wants to take their influential storytelling skills to the next level navigate and strategize an unfolding crisis through our Crisis Challenge, or join a community that's focused on diversity, equity, inclusion, or reflecting on lived experience. Sanger has programs that are geared towards every leader. Without further ado, though, let's get started. I'd like to first introduce today's speaker. Paul Polman is our featured speaker. Paul has been described by Financial Times as a standout CEO for the past decade. For his role at Unilever from 2009 to 2019, and his book Net Positive was awarded Financial Times' Best Business Book of the Year. Paul is also involved in numerous leadership positions in business and world politics. He is the co-founder and chair of Imagine, an organization that mobilizes business leaders around tackling climate change and global inequality. He also serves as the chair for the International Chamber of Commerce, The B Team, Saïd Business School, and the Vice Chair of the UN Global Compact. Paul's career has involved many roles in leadership at Nestlé and Procter& Gamble. Throughout his career, though, he has tirelessly championed the idea that businesses can profit by helping fix the world's problems, including climate change, inequality, and diminishing biodiversity, rather than by creating them. At Ross, we believe in the power of business for the greater good. So we're excited to have Paul here today to talk more about his experiences and advocacy. Paul will be joined by Andy Hoffman, the Holcim Professor of Sustainable Enterprise here at the University of Michigan, a position that holds joint appointments at the Stephen M. Ross School of Business and at the School of the Environment and Sustainability. Professor Hoffman's research seeks to understand the cultural and institutional aspects of environmental issues, for organizations. He has published over 100 articles and book chapters, as well as 18 books. He has an extensive list of honors for his research, and in addition to his research, Andy serves on advisory boards for 6 environmental and innovation organizations and also serves as an endowed faculty member at the Ross's IRB Institute. Prior to academics, Professor Hoffman worked for the U.S. Environmental Protection Agency, Metcalfe and Eddy Environmental Consultants, TNT Construction and Design, and the Amoco Corporation. Welcome, Paul and Andy. Paul, I'll let you— I will let you— I'm sorry, Andy, I'll let you kick it off and get us started.

Okay, thanks. Thanks a lot, Jeff. And thank you to Sanger for pulling this together. Thanks for being here, Paul. What I want to— I'm thinking about our conversation following 3 themes. or 3 parts. The first, changes in business, business practice, and we'll talk about net positive. Second, what's needed within business education, how do we change that? And then third, advice for students, and that's where I really want to hit some positive and hopeful notes our students can take away from, from this conversation. So if you're, if you're fine with that setup, what I'd like to start with, can you just give the audience a brief description of what you mean by net positive and what your book is all about?

Yeah, very briefly, we wrote this book really to create a movement for a mindset change, if you want to. We are living well beyond the planetary boundaries. I think the audience should be familiar with that. World Overshoot Day, which is the day that we use up more resources than the world can replenish, is this year July 28th. I would argue that After that date, we're actually stealing from future generations. In more developed countries like the United States, that date will be even earlier. This wonderful world is 4.6 billion years old. If I put it at a scale of 46 years, human beings have only been here for 4 hours. Industrial Revolution only started 1 minute ago, and in that 1 minute, we've cut half the world's forests. Johan Rockström from the Stockholm Resilience Institute defines the health of the planet with 9 planetary boundaries. 4, or I would argue 5, have already exceeded the maximum acceptable level. So our linear production system, frankly, has come to an end. We've done a great job on lifting many people out of poverty, but now that we have an enormous population, enormous level of wealth in some parts of the world, Our linear production model is just putting too much pressure on planet Earth. 68% of the reptiles, mammals, birds species have actually disappeared in the last 5 decades alone. Some people call it the 6th greatest extinction. And climate change is obviously the biggest example of that. I don't need to really go into that too much. Yet most of the companies are in what I call the CSR mode. If you look at their sustainability reports, including the universities, or if you look at the commitments they've made at the COP26 in Glasgow, where I was for 10 days, it's all about being less bad. A little bit less plastics in the oceans, a little bit less carbon in the atmosphere, a little bit less deforestation. But if you've overshot these planetary boundaries to such extent, less bad is still bad. So what we're trying to do is to say, okay, now you might say, I want to be sustainable, but But that's no harm, that's neither good nor bad. To sustain is not good anymore either. 95% of the CEOs don't even want to come back to where we came from because it wasn't working either. So the only mindset that works, I think, to be longer-term successful, to live in harmony with planet Earth and future generations, is to think regenerative, restorative, reparative, and that is what we call net positive. A very simple question: how do you profit from solving the world's problems? not creating the world's problems? And really, is the world better off because your company is in it, yes or no? And I don't think many companies at this moment can answer that in the affirmative. So the book really takes you through the stages on how to do that very practically and what a net-positive company looks like. But Andy, we can talk that a little bit more later.

Sure. You know, you've been a CEO. How hard is it to do this? I know Emmanuel Faber at Danone, was shown the door for trying to do this. Are you asking CEOs to really stretch and do something incredibly hard?

Well, when the world is stretched and when our future is at stake, we all need to stretch. It's not only the CEOs. I'd like to see that as well from civil society and from governments, but we need it. The science is clear. And if we deny the science, that's a different story. But I think at this audience, I start from the premise that, for example, the climate science, what's 95% of the scientists are giving us, or the importance to keep our— restore our biodiversity, address the issues of inequality, are big enough issues that we care about, that we understand not only from a moral reason, but actually also from an enormous financial or economic opportunity reason. We're simply at the point, Andy, now that the cost of not acting, as we've seen with COVID actually, is higher than the cost of acting. COVID has cost us $17 trillion. A zoonotic disease like SARS, Zika, Ebola, Asian flu, a particularly nasty one, but it's a direct result of the destruction of biodiversity. So, and there are probably 4 or 5 more waiting around the corner. 8 million people die of air pollution every year. The cost of keeping people in poverty or not giving access to education or giving women less rights than men is tremendous on the global economy. So, because technology has developed faster than we thought, because we have increasingly the data that longer-term multi-stakeholder models, purpose at the core, sustainability embedded into all parts of your operation, are actually, in general, better for your shareholders. So, we have the technology, we have the data, and we have a more burning platform. So, I think we're in a better position than when I started. frankly, 14 years ago now, where I needed to do a lot of convincing. Now, most companies are moving, they're in first gear, and the challenge is really, given the urgency of the situation, to get them into second and third gear. So it's more about speed and scale than convincing people about what needs to be done and the direction. So then you say Danone, and it is true that we see in general that you have a higher chance of being successful, just like you have a higher chance of getting a better return if you invest in ESG or in companies that are better positioned for the future. The people that have invested in Tesla or in Ørsted or in, in some of the alternative meat companies have in general done very well. But any of these major transitions is bumpy, so you need to look at that over the longer term. Over the longer term, we've seen that companies that operate With these longer-term multi-stakeholder models, purpose-driven, actually, if you look at just capital, for example, in the Russell 1000 companies, 56% higher return over the last 4 years. I've certainly seen that in Unilever, where we had a 300% return and a consistent top and bottom line growth. Not surprising, it attracts people more and more. It provides engagement, more resilience with your suppliers. You become more innovative. I would argue you take inefficiencies out of the system and ultimately, that results into better business results. And the financial market is increasingly understanding that and seeing that. They're actually starting to value companies more, that the companies that more aggressively, Andy, attack these negative externalities increasingly are also higher valued by the market. Good example recently would have been the companies that left Russia proactively. About 2,000 companies did. If you compare these 2,000 companies that have given up Sales that have given up profits. If you compare that with a group that decided to stay, you actually see that the financial market rewards the first group in aggregate better shareholder value over this period than the group that decided to stay. So there is something happening there that is very clear, not only shown by the enormous demand for people with ESG knowledge and salaries that actually are rapidly increasing in this domain, but also in actually what these companies are doing. Then you come to cases like this. I think For every Danone case, there are 10 Enrons or Parmelads or Boeings or Wells Fargos. So we are not saying it's black and white. We're saying it's just the opportunities are better. But at the same time, there are some basics that you need to do. You need to have the right products. You need to have the right innovations. You need to invest behind it. You need to operate with discipline and keep your costs under control. You need to be sure that your boards are aligned to your strategies, that they are not getting into conflict between the CEO office and the supervisory office. So there are many basic things that never will change. I think Danone has had a poor shareholder value track record over 10 years. Combinations of business decisions, investments in business, organizational structures that weren't quite working anymore, innovations that were actually poor. So we should, be tough on ourselves, but also honest with ourselves that these 2 things go hand in hand. And if a shareholder in 10 years' time doesn't see results when the market in general has gone up tremendously over the last 10 years, then yeah, you have to ask yourself a question. You cannot sit here and preach sustainability if it is not directly linked to making your business more successful. So that's also the biggest watch out I had in Unilever. Where people gravitate towards wanting to do well and solving the world's problems. But if you don't have an iron discipline to link that to performance, then you just say, sorry, the time hasn't come yet, or I need to think about something else. I need to form partnerships perhaps to do that. I need to wait for governments to put legislation in place. I need to wait for technology to develop a little bit more. You know, you're not going to run your company right now on hydrogen when the cost is not at parity with other sources of energy. So, you know, whilst it is better, I wish the whole world would be running on hydrogen right now. It's clearly out of reach at this moment. So you have to be very smart on this journey. Otherwise, you obviously open doors to skeptics. And you also have to be genuine and deliver. And there's now a whole movement in the US on woke capitalism, and the right seem to have seized that. Statements being made by Cruz and DeSantis and many others. That business should not have a social role, should not have an environmental role, that this is a secret plot from China to undermine the US economy. I mean, I've read everything. But what we have to watch is that we don't open that door by making commitments and then not deliver, or by saying one thing or doing another thing. So this is hard work, but it's very rewarding. When the cost of not acting has become higher than the cost of acting, for the smart companies, this is a tremendous business opportunity. And it positions you where you need to be. And frankly, I think it's the only way right now to go. But we're at a delicate moment where the voices of the, you know, the vested interests are becoming louder, where unfortunately other events like the terrible war in Ukraine give people excuses to push back. Energy prices high, let's drill more holes. Investments in the US are up significantly. from what it was before, but that's the wrong response. We need to continue to accelerate the direction to that cleaner economy so that we all have an opportunity to live for generations to come. So, you know, these things go hand in hand, Andy.

You preempted what I wanted my next question to be, 'cause I was thinking about what you're talking about, and there are 2 ways to attack it. And one is the criticism of woke capitalism. And you talked a little bit about that, but does this run the risk of a company becoming a blue company or a red company? By miring itself in politically contentious debates?

So in the US, it has become more polarized than in other places in the world, although we have some examples, obviously, that it has crept into politics. The UK tends to mirror fairly quickly the US. So some of that debate is happening here from where I'm talking right now. But 70% of your employees want your CEOs to speak out. They also want to know where the company stands for So if you have a thing like an important change in legislation, like Wayfair's role, which is a very polarizing issue, the employees in a company want to know where your CEO stands, where the company stands. If you have a major issue like climate change, they want to know. If there's a major issue with not accepting the elections on January 6th, they want to know if the company supports the people. That don't recognize the democratic process or actually are opposing. If it's about LGBT issues, they want companies to speak up. So increasingly, actually, with the higher trust that actually companies have versus politicians, civil society and employees in your own company expect you to be a social leader. I think you have a moral obligation as well, Andy, because some of these things are basic values on which humanity is built. And if you stay silent, you actually become complicit because each time you stay silent, you let it happen. And each time it happens, it gets further ingrained and the bar moves. Very much the story of the last 4 years in the US. And then it's very difficult to change at some points in time. So I've always felt that as a CEO, you need to defend some of these basic things like dignity and respect, equity, compassion. These are values. on which humanity is based. And frankly, companies that have done that and done that thoughtfully have attracted perhaps controversy, but have actually been rewarded broadly by the market as well. A good example of that would be Nike, that you're well familiar with.

But the other criticism could be, why should we look to CEOs to solve the problems of the world? We should have governments do this. A CEO is not elected. They're not accountable. They will always have the profit motive as a conflict of interest. The Harris poll that came out a couple of months ago, 68% of CEOs question the legitimacy or their sustainability efforts, whether they're being genuine, and said that a lot of things they do are greenwashing. So from the other side, why should we trust CEOs? Why should we trust companies to solve the world's problems?

Well, so there are a lot of premises in your question, Andy, if I may. And I am the last one to say you should trust CEOs. But the reality is, if you look at Edelman or some other surveys, the CEOs have a little bit of a higher level of trust right now than the governments do. That's regrettable. I wish that wouldn't be the case. Multilateralism isn't working either. And businesses, obviously, is 65% of the global economy, 85% of job creation, 95% of financing. We cannot solve these bigger challenges that we have if we don't have active participation of business. And increasingly, there is a group of businesses, not all, I'm sure there's greenwashing in anything that ultimately will be flushed out. But there is a big enough group of businesses now that say, you know, the way that this is currently going is not working. You can't have jobs on a dead planet. You don't have business in societies that fail. Increasingly, they accelerate actions in their own companies or form broader coalitions to then work hopefully with civil society and governments. Ultimately, your point is totally valid. And the book actually talks about that. 2 chapters on partnership. One is 1+ 1= 11, partnership within your industry, for example. And then it takes 3 to tango, partnerships across sectors, civil society, governments, and private sector. Ultimately, you need to have a big enough group of people, like the businesses in this case, speak up to help de-risk political process. I think very much that is what happened in Glasgow, where the COP26 on climate change negotiations gave a better outcome than people had expected. By far not enough, but better outcome, because the voices of responsible business were so clear and loud. The Secretary-General even referred to that. in that parallel track, as they called it, actually pulling up the courage of these governments to come in with more ambitious targets. So I think business has a role to play.

Is that how a company could be the most net positive, is to empower governments to do their job?

It's part of being net positive, is, as we would argue, being part of these bigger transformations. As long as you have $1.8 trillion, for example, in perverse subsidies that pull you to fossil, or that drive unsustainable agriculture, you'll never get there. If governments don't give clarity of direction, business will never invest. If there isn't enforcement of policies or clarity of standards, which need to work for everybody, then undoubtedly you get free riders that are driven by their own personal greed. So to really move as a society and to move at scale, we need to work together in this partnership. Especially since these challenges are so high. At this moment, to some extent, I'm happy about that. But you have an economic crisis, you have a health crisis, you have an equality crisis, you have a geopolitical crisis. You know, we've never had so many things to deal with at the same time. To some extent, I deliberately say I'm happy about it, because in previous crises, we dealt with symptoms and we put some bandages on it, but we made it actually worse by not addressing it. Now, for the first time, with the pause of COVID there are more and more people thinking about how do we need to bend the curve of capitalism, whatever you name it is not an issue for me, but bend the curve to make it work for more people, to be in harmony with planet Earth, and to make it function for future generations. And the good thing is, sadly enough, may I say, the good thing is, Andy, that often now the solutions are cheaper than bearing the cost of our failures. So it's becoming an enormous economic opportunity and good companies understand that. Elon Musk with Tesla certainly understood and he's built some good value, got also enormously rewarded for it. That's a different story.

Let's transition a bit. You're on the board at the Saïd Business School. So you know a bit about business schools, what they do, how they do it. Do you see—

At least I've been.

What's that?

I wish I would know a little bit.

Well, are business schools on the right track? Do they need to change to be part of the net positive movement?

So coming from the private sector, it takes a while to understand the academic community. Great respect, they have a high level of trust, but there are some modus operandis that are different than what I'm used to. But, you know, I deliberately took a fairly young school and was honored to be asked to be a chair, because there weren't that many preconceived notions or dogmas that make it sometimes difficult to change. But, you know, only 1/3 of the business schools have made climate commitments to be net zero, when, you know, the science says it. That's kind of surprising. Many schools are still in that camp of less bad versus really thinking net positive. Many, most schools, if I may say, still see sustainability as an elective course you can Pick, you know. Your Urban Institute is ahead of its trend. What you're doing with your library and case studies and bringing it in everywhere is ahead of the trend. That's why we became friends, and you've been so kind enough to help us with the book and theories of change and other things. But you're the exception, not the rule. Just like Unilever, perhaps in the business world at that time, was an exception. In fact, if you ask business schools and you ask students how they how satisfied they are. with the results that their programs deliver. They actually score out of 10, 5.5. I mean, that would be a failure score in any exam that you would give, Andy, I know that. So there is work to do. So what is— I was talking to Judy Samuelson the other day who works at the Aspen Institute. And you know, the Aspen Meadow Institute has done ideas, was— Was teaching is one of their streams to get this into the education. But she said it's interesting, Paul, what your observations are. We did a little survey where we interviewed students going into the business programs before they started. I want to change the world. I want to make a difference. Want to leave this place in a better situation than I found it. And we interviewed the same people after they graduated. Want to make a lot of money. I want to work for Goldman Sachs. And you know, so they made it from wonderful human beings into little monsters and. I call them little Milton Friedmans on steroids. We're still teaching a very narrow definition of leadership, a very narrow definition of success, not different from a country's GDP. And I'm not exaggerating, that's probably what is happening in most business schools, where you should be able to get an elective course that has a sustainability title in there, but that's about it. I hope that soon we can get to the point where this elective course is Milton Friedman and where the core of your education— is really, you know, how we should be running society and how we respect these other stakeholders and do that successfully. So that is the major transformation. And the same with companies. When you do baseline and improvements, you get incrementalism. You really have to think about redesign. What I like about Zayed, not to make advertising for Zayed, but there's the Blatvanik School of Public Policy. It's very important to know how to deal with governments, to your previous point. There's the Smith School, the Martin School that have a lot of the science of climate there. So people that become these leaders of the future, and we certainly need them, need to be able to be these horizontal leaders, not just vertical specialized silos, if I'm clear enough.

And, you know, I like that you brought up Milton Friedman because many business schools, Michigan included, will teach the idea that the purpose of the corporation is to make money for the shareholder. Milton Friedman. I always fall back on Peter Drucker, who said the purpose of the corporation is to identify and serve a market. How well it does that is measured by profits, but at the end of the day, the worth or the purpose of a corporation is how it serves society. What's Paul Polman's definition of the purpose of a corporation?

Well, the purpose of a corporation is to profitably address the issues of people and planet, as Colin Mayer in his book Prosperity says it very well. Sustainability for me is put the interest of your children and their children ahead of your own personal greed. No one has come up with that definition, that— but that's basically what it boils down to. In fact, we are in a sweet spot, Andy, that we don't have to have the debate between the shareholder and the multiple stakeholders, but more between the short and the long term. I believe increasingly that the interest of the shareholder— and sure, we need to have them as an important stakeholder, and also have them ensure that they have a decent return. But I think the interest of the multiple stakeholders and the shareholders are actually increasingly converging. This is also why you see the financial market moving and moving from seeing it as risk mitigation to actually seeing it as enormous opportunity. In this year's shareholder season, with the proxies for the shareholder meetings in the AGMs, Now the majority of proposals that came from the shareholders had to deal with disclosure of money in politics, with social standards for your employees like living wages or gender balance, or had to do with carbon decarbonization. Engine One with ExxonMobil being the most publicized example where shareholders actually come in and put people on the board to move. So I think this activism is now You know, we've moved from passive shareholders and index funds and frankly not shareholders in its true sense. We have seen again a resurgence, I think, of more active involvement. And not only because of letters of Larry Fink, but I think it is actually true across the board. Part of that is because ESG funds have outperformed their peer funds over the last 3 or 4 years. In 2020 alone, 81% higher return than equivalent funds that were not called ESG. You might say some of that ESG is not really ESG, but fine, you need to start somewhere. You get legislation, you get standards, you hold people accountable, and you move forward. But this is— it is happening. And the financial market is actually a bigger engine for change. In Glasgow, my last sentence is, we saw the Global Financial Alliance of Net Zero, where $130 trillion of money under management made the commitment to decarbonize their portfolio. Even if half of that is hogwash and trying to be popular, then you're still dealing with $65 trillion. Even if you say it's not true, it's only a quarter of it, you're still a coalition of $30 trillion. That's enough to make a systems change, as you know. That's tipping point material. So I think it's starting to happen. It always takes a little bit longer for us to realize what is going on until we see it happening. I

want to get to student questions, but there's one more I want to ask, and that is directly to the students. I see in my students an idealism. They want to use the power of business to make the world a better place. That's— I see that. But I also see them, they're a bit dark. They look at climate change, income inequality, political divisiveness, a market that seems to want to squeeze their idealism out of them. What words of encouragement and hope can you give them? How does one— I've always wanted to ask you this question, Paul. How in the world do you get to be the CEO of a major corporation and hold on to your idealism? How do you do that?

I don't know. It must be either stupidity or naivety, but I didn't want to be a CEO in the first place, Andy. I just ended up being it. I'm probably the accidental CEO. If I ever write a book again, I'll write that. I think it's very dangerous actually to want to be myopically a CEO. That's not to me a very good motivator to give people such an important job. So I would not make that the key objective. No, I know half of the— we did a survey during COP26 in Glasgow and half the young generation doesn't want to have children. There's a real angst about what is happening and we've never been in such a A challenging situation with the many issues that are out there. I cannot remember that in my career. It's also not easy to be a CEO where you have to make changes that are bigger than the scale of the Industrial Revolution, and you have to do it faster than than the technological revolution. Many CEOs are not trained for that. The average tenure now is four and a half years. Average tenure, by the way, of a publicly traded company has dropped down from sixty seven years. When I was born to 17 years now, the lifetime of a publicly traded company. So we really have the wrong leaders and we really don't know how to run our businesses in this environment would be a real conclusion. We also have boards that frankly have grown up in a different time and struggle. Many of the pressures on companies, the short-term pressures actually don't come from the financial market as much as we always try to make clear. But if you really look at it, actually come more from the boards itself. So there's a job to do to educate people. For the young people, it's a wonderful opportunity. Because again, once more, we have technology coming in. We have the economics increasingly are starting to move into that direction. We have a higher awareness now of what needs to be done. We have increasing evidence that companies that do that are more successful, also in where you want to work or where people are going or where people are disconnecting from the workforce. So there are so many reasons. What is a challenge is how you do that and how you form these partnerships in these environments. But, you know, humans are up to these challenges. At the end of the day, this is not a challenge of climate change or inequality or food security. This is a challenge of greed, of apathy, of selfishness. And interestingly, the next generation that is coming in, which by the way, 50% of the world population is below 30 years old, they're going to be 100% tomorrow. They're more purpose-driven. They embrace partnerships. They think multi-generational. So I think they're well prepared. If we ensure that they not only have a seat at the table, but sometimes actually give them the table, it is a very exciting moment. Study after study points out as well that we can do it and that it makes sense to do it, that decarbonization is better than continuing on the path of fossil fuel, that equality in society or decreasing the gaps instead of increasing them would result in more robust resilience. That it's better to go for better air, more biodiversity we can enjoy, or peace in this world than some of the behaviors that we see right now. So if we create the right leaders, I wish I could in that sense start over again and be part of that journey. It's completely transformational, not only for yourself, But for the world. If you talk about a purpose, it's being given to you on a silver platter. So what do people need to do? I think find the sweet spot between what you're good at, what the world needs, and what you like to do. That's always the starting point. And it doesn't have to be business in that sense. But if you can be in that little circle where that is an overlap, that's very important. People that are curious is very important. People that are humble is becoming very important. People that continuously understand that true leadership is about putting yourself to the service of others, knowing that by doing so you're better off yourself as well. So these are the type of skills that I think increasingly come in. And, you know, and I think again, once more, like you, I'm very encouraged by the people I see in the universities I work with, which are quite a lot. And the work we are doing now is the book. that, uh, that, uh, my hope— I would call it that way— my hope is very much grounded in the millennial Gen Z generation.

I'm trying to scan through the questions, and, and one theme that seems to be coming out in the questions is how do you get this change in mindset, change in culture to go out through the company? I know you did a lot of work at Unilever to get everybody to examine their purpose Can you talk a bit about just some techniques, some tactics you use to spread this idea and change the culture of a massive organization like Unilever?

Well, it's something in life is if you have to disrupt yourself or you'll be disrupted. That's true for a business and that's also true for individuals. So when I came to Unilever, it was the height of the financial crisis. It wasn't very easy then either. The company wasn't in very good shape. So we had a burning platform to make the changes. But just to make the changes by focusing monoptically on making more money or selling more products without having a deeper purpose behind that is not really the best way to engage your employees. We tried that, we'd done that, we'd actually failed. We'd become victim of short-termism like many of the other companies. So we went back to the roots of the company. Often that's the answer. Founders of companies didn't start to just become rich or only please the shareholder. They had an idea. They saw an issue in the world that needed to be addressed. They knew how to do it better than anybody else. And in the process, they were successful financially as well, but that didn't drive them in the first place. Lord Lever invented the bar soap because in Victorian Britain in the end of the 19th century, 1 out of 2 babies was dying because of issues of hygiene. He wanted to solve that. His mission was, his purpose was make hygiene commonplace. And he understood that the best way to do that was with what he called a shared prosperity model. That's what he called multi-stakeholder at that time. He built the houses for the workers before he even had the factories up and running. He introduced pensions for the first company in the UK, guaranteed 6-day work weeks, had hospitals and schools and all these things. Wow. He got broadly rewarded for that. The results certainly that he put in and the company that he built is quite admirable. So we went back to that origin and that core and out of that came our purpose adjusted to today's needs, making sustainable living commonplace. The next thing we did was really work, as you said, on your own purpose because that is important. In an uncertain world, you want a beacon. You want to work for something bigger than yourself. We— it gave us courage to say we need to take responsibility of the total impact. It gave us courage to say we need to set targets that the world needs, not targets we can get away with. It gave us courage to say we don't have all the answers, we feel very uncomfortable, so we need partnerships, we need help. And it put bit by bit the ingredients in place for not only making our business model more robust but actually being able to reach more people in the bottom of the pyramid to get increasing respect of society. And as the trust went up, we were twice as high on the trust scale in Globescan than even companies like Patagonia, opportunities actually came. So this multi-stakeholder model started to grow and became more robust. And even when we were put to the test with this attack from Kraft Heinz, which frankly was financial manipulation without real value building, for society, if I make it simple, I could see that if you stand by the world, the world stands by you. And that amount of support I got not only from the board, but also from others to say, hey, society needs these business models that are geared towards serving the billions of people, not the few billionaires, that are based on values to create value, not just extracting value at any cost, that take multiple stakeholders into account. Versus the shareholder only. And it has proven to be worthwhile to stick with Unilever. Share price continued to evolve. Kraft Heinz, big write-offs, share price lower than when the company started. So we have to bring society to a certain level of sanity that requires us to set examples. This is not easy. But I think increasingly we show that if you go that route, you have a higher opportunity to be successful. So why not do that? And it's better, not talking the moral reasons, but it's better for the world. It's better for future generations, which we, I believe, should take into account a little bit.

We're running short on time, but I see 2 questions here that are interesting, sort of probing in what you're talking about. The first, I'll give you both of them. The first one, can every company be net positive if a company's business model is designed around extracting, for example, extracting and burning fossil fuels, can they be most net positive by bringing themselves to an end, or can they become net positive? And the second question is an important one, and I know it's something you've thought about, but as we start to think about the developing world, I mean, let's face it, most multinationals are not focused there, and there's where a lot of attention needs to be focused. How do we change the business model to serve all people and not just those in the affluent West?

2 very good questions. Questions. As you know, Unilever had 65% of its business in the developing world, in countries like India or Indonesia or Brazil. We are the biggest company in these countries or the second biggest. In the Indian Stock Exchange, we are the second highest valued company. Very much, 80% of the world population is living outside of Europe or the US, if you like it or not. We sometimes might not get that impression, But that is where future population growth is, where also people have the aspirations to have a certain level of comfort or standard of living that we've become accustomed to. But they have the opportunity to design it right. So if you're a fossil fuel company, what do you need to do? You need— you're in the energy business. Your purpose is to give people energy. That's a great purpose. There's still 800 million people in the world who don't have energy. We know that is an unlock to the Sustainable Development Goals. There's still 1.3 billion people that have access only to intermittent energy. And if you provide energy to them, you give them jobs and opportunities, you give them education and that they can study, you give them hygiene and sanitation. It unlocks really all these other sustainable development goals that we need to drive prosperity. So yeah, you need to transform. When I started working in Unilever— sorry, in Procter& Gamble— both Procter& Gamble started making candles. And then the electric light bulb was invented. So if they still would have made candles today, you wouldn't have P&G in the way we have it now. The company evolved to respond to these needs of society and positioned itself well for the future. So we have energy companies like Ørsted or Iberdrola or Acciona that have more aggressively converted their business models to green energy, and they're well positioned for the future. We can clearly now see sector by sector that these companies that have done more aggressively already the move to sustainable energy are actually higher valued by the market. And the ones that haven't are actually lower valued because they are higher risk of stranded assets, of lawsuits, of being really part of the problem in a big sense. We see the same in agriculture. Companies that have moved more aggressively to stop deforestation in their value chain or to move to regenerative agriculture, things that are going in the direction of net positive restoration of nature. Walmart protecting 1 square kilometer of ocean is a net positive thing. Microsoft saying, I take carbon out of the air since 1975 when I started. Is a net positive thing. Mastercard saying, I spent $500 million on minority businesses because nobody else seems to take care of them. That's a net positive thing. Some of the— Chobani who stepped up, my friend Hamdi, in I'm going to take in refugees or I'm going to set the wages well above the minimum wage so that people can live in these places. That's a net positive thing. And each time we see these companies do that, with, with, um, common sense, with, with, um, reflection, uh, not like cowboys, but each time these companies do that, we see them getting rewarded for it. And, and this is the moment that we are now in. So yes, you need to transform your company, and yes, we need to be net positive, because continuing to take away from the planet doesn't work anymore. You can't have infinite growth on a finite planet, and anything you can't do forever is by definition unsustainable. And COVID has shown us we can't have healthy people on an unhealthy planet. So, you know, frankly, 95% of the people we ask, including the CEOs, once more don't want to go back to where we came from. So let's master this and be smart and become part of that solution, not continue to be part of the problem. And this is what the book, in a very constructive and positive way, is trying to help people with. So I always say not everybody can invent the internet, Andy. That's not a problem at all. I don't know how it works either, but I'm certainly using it. Here we have a new internet which is called net positive. If people read the book, they undoubtedly will get ideas that will make collectively a big difference. Small actions, big difference.

Well, thank you very much, Paul. This is all too short. We could talk about this for a good long time. I would love the ideas you're pushing here to really start to infiltrate business school pedagogy, business school education. And we at Michigan are trying to push it in this direction. But thank you so much for spending time with us. I think Jeff is gonna bring us formally to a close. There you go, Jeff.

Absolutely, yeah. Thank you so much, Paul, for your advice and leadership and really, really importantly, your vision in this space. And thank you, Andy, for your expertise and dedication to this work. We want to show appreciation for Paul and for participation in today's session. The Sanger Leadership Center has actually donated funds to the Michigan Climate Venture, or MCV. MCV is a program that's housed here at U of M, for those that don't know, in our School for Environment and Sustainability, which centers around a student-run investment fund targeting early-stage climate tech companies that have massive potential for rapid decarbonization. So thank you. And then for those that are joining us, we hope that this isn't the last time that you join us. We've got— we'll have continued opportunities for leadership dialogues. If being here today is something you enjoy, we'd love to hear from you. If you are a faculty member, we'd love to have you involved with our center. If you are an external organization, we'd love to have you involved, speaking opportunities or becoming a judge at our Leadership Crisis Challenge. And if you're a student, we'd love to have you involved in some of our programs. We will be announcing our next speaker very soon, and we know you'll be excited for it. Can't release details yet at this moment, but we have some exciting news coming up for you. On behalf of the Sanger Leadership Center, thank you all so much for your time and for joining us this afternoon. Have a great day.

Thank you.

Thank you all. Be safe. Thank you. Hope to see you soon. Thanks. Bye-bye.