Unilver boss Paul Polman, who is stepping down in 2018 ©PA Archive/PA Images
Unilver boss Paul Polman, who is stepping down in 2018 ©PA Archive/PA Images

How to leave a legacy like Paul Polman

Whether you see him as a do-gooder or a CSR pioneer, the departing Unilever boss has moved corporate sustainability to the top of the global business agenda

Anyone wishing to leave a legacy like Paul Polman would do well to start by re-evaluating the purpose of capitalism.

The CEO of Unilever, who is stepping down this year, took a brave stance after taking the top job at the world’s fourth largest consumer goods firm (by sales) when he declared it was possible to foster growth and be ethical at the same time. Polman said he would be doing this by putting the consumer first.

“Too many companies are running their business into the ground, I would argue, by being myopically short-term focused on the shareholder,” he told Bloomberg. “We’re going back to what it should be.”

The Economist meanwhile has described Unilever, worth around £124bn and behind dozens of household staples from Dove soap to Hellmann’s mayonnaise, as the “world’s biggest experiment in corporate do-gooding”.

Polman has been true to his word. Joining Unilever in 2009, he introduced the Unilever Sustainable Living Plan a year later, which includes targets to halve its environmental impact by 2030 and sustainably source 100% of agricultural raw materials by 2020. At the end of 2016 this figure was 51%. Currently 67% of procurement spend meets Unilever’s responsible sourcing policy, against a target of 100% by 2020.

Central to his strategy has been a focus on emerging markets, including improving the lives of workers in Unilever supply chains and social welfare programmes, which have the added benefit of introducing people to Unilever brands. By way of example, through charity campaigns, schoolchildren in developing countries have been taught a hand-washing routine – to encourage better sanitation and tackle childhood diseases – which happens to involve soap made by Unilever. Sales in emerging markets have driven much of the company’s recent growth, making up 57% of overall sales in 2017.

Sustainability has the added benefit of appealing to consumers in the developed world, many of whom are taking a more active interest in the provenance of products.

And while many could be accused of greenwashing, Polman, who wanted to be a doctor and trained for the priesthood, is committed to a sustainable business model.

“We spend a lot of time disengaging from shareholders who do not benefit our strategy, and attracting those who do buy into what we are doing,” the Dutchman told Management Today in 2011. “There will always be people driven by short-termism, greed and self-interest, but we’d rather not have them associated with our company.”

Polman’s corporate vision was challenged early in 2017 when Kraft Heinz made an unwelcome $143bn bid for Unilever. Kraft Heinz is owned by Warren Buffet’s Berkshire Hathaway, and the private equity group 3G Capital, which has a reputation for ruthless cost cutting and high margins, going against everything Polman stands for.

The takeover was fended off by Unilever, and Buffet has since said it was not meant to be hostile, but Polman was forced to alter his strategy to appease investor expectations. Unilever has promised to lift operating margins from 16% to 20% by 2020, to conduct a share buyback and it has started using zero-based budgeting.

Unilever has announced that a search is under way to find a successor for Polman, who has said he will remain in post throughout 2018. It may not be much of a stretch to guess where his career might take him next. Polman is a familiar figure at conferences such as the World Economic Forum in Davos, and he sits on the board of the UN Global Compact and is a member of numerous development organisations. If you want to leave a legacy like Polman, it is definitely time to dust off your sustainability credentials.

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