By Paul Polman
Over 250 years ago, a British entrepreneur called Richard Arkwright built the first automated textile machine and, in doing so, started the industrial revolution. It was an age built on coal and, over the years, further fuelled by oil and gas. It has transformed our lives and landscapes, lifting billions out of poverty and making many fortunes.
But the burning of fossil fuels has not only changed the way we live and work, it has also changed our planet, so we must now change once again the way we do business.
The cost of not doing so is too high — if we go on as we are, we jeopardise national and global security and economic prosperity.
Over the past decade, in the US, the cost of extreme weather including Hurricane Sandy and the droughts in California and Texas, has topped $300 billion. Sao Paulo, which produces a third of Brazil's GDP and relies on hydropower for 80 per cent of its electricity, has seen the worst drought in 80 years. The World Bank has warned that predicted temperature increases could lead to food shortages for 63 million people in India by the middle of the century. In total, the UN estimates that losses from natural disasters since 2000, increasingly linked to planetary warming, have been $2.5 trillion. We estimate Unilever alone is incurring costs linked to the effects of climate change of around €300 million a year.
The good news is, with this change comes opportunity. It represents a chance to transform business, save costs, reduce risks and fuel innovation.
The report, Better Growth, Better Climate published last year by the Global Commission on the Economy and Climate shows that economic growth and action on climate change do not have to be in conflict; quite the reverse. The growth of cities combined with the rapid adoption of clean energy represents a multi-trillion dollar business opportunity.
We are finding similar opportunities in our own business. Reducing our environmental impacts has helped us avoid factory costs of over €400 million since 2008. We see our brands with a sustainable purpose accounting for half the company's growth in 2014 and growing at twice the rate of our other brands — consumers are voting with their wallets. Moving to sustainably sourced tomatoes has not only provided thousands of farmers in Maharashtra with guaranteed incomes and training, but it's also seen Kissan become the number one ketchup brand in India.
And it helps us secure supply. Over 55 per cent of Unilever's agricultural raw materials are now sustainably sourced, more than half way to our 2020 target of 100 per cent. To achieve this, we have been working with smallholder farmers to help them increase their yields; we've trained 800,000 so far. This improves their livelihoods but also future-proofs our business in a volatile world.
We are showing that it is possible to grow a business while reducing environmental impacts and increasing positive social benefits. And we're making good progress. In India, for example, we've reduced our waste by 88 per cent since 2008 — and now send zero waste to landfill from our factories. Smart redesign reduced our packaging by 700 tonnes of plastic and 4,900 tonnes of paper in 2014. And we've trained over 30,000 people across the country in water conservation and better agricultural practices.
What I find heartening is that those who get it most are the young. Not just the hundreds of thousands who joined the People's Climate March in New York, Delhi and in cities around the world but the young entrepreneurs I meet, who see how innovation can create better lives for millions of people.
In just seven months' time, leaders from over 190 countries will meet in Paris to sign a climate agreement. There is still a steep hill to climb. Just as the factories that first installed Arkwright's mechanised looms were attacked by some — there will be cynics and detractors, with vested interests or held back by an alarming apathy.
But business is stepping up to the opportunity. More and more are calling for a higher ambition from governments. Over 1,000 organizations signed the World Bank Carbon Pricing Statement, calling for governments to implement a carbon price. Members of the B-Team — including Sir Richard Branson and me — have called for a target of Net Zero Emissions by 2050, a tough goal but one that is necessary to minimise the risks to the world and maximise the opportunities for business.
So as we mark World Environment Day, the case for action on climate has never been clearer and I am optimistic.
I hope that when the world looks back on 2015 many years from now, just as we look back on Richard Arkwright's great invention, they may see this year as the tipping point which started the second great industrial revolution — the year in which governments, business leaders and civil society came together to lay the foundations for a better world.
(Paul Polman is CEO of Unilever and Chairman of the World Business Council for Sustainable Development.)
Over 250 years ago, a British entrepreneur called Richard Arkwright built the first automated textile machine and, in doing so, started the industrial revolution. It was an age built on coal and, over the years, further fuelled by oil and gas. It has transformed our lives and landscapes, lifting billions out of poverty and making many fortunes.
But the burning of fossil fuels has not only changed the way we live and work, it has also changed our planet, so we must now change once again the way we do business.
The cost of not doing so is too high — if we go on as we are, we jeopardise national and global security and economic prosperity.
Over the past decade, in the US, the cost of extreme weather including Hurricane Sandy and the droughts in California and Texas, has topped $300 billion. Sao Paulo, which produces a third of Brazil's GDP and relies on hydropower for 80 per cent of its electricity, has seen the worst drought in 80 years. The World Bank has warned that predicted temperature increases could lead to food shortages for 63 million people in India by the middle of the century. In total, the UN estimates that losses from natural disasters since 2000, increasingly linked to planetary warming, have been $2.5 trillion. We estimate Unilever alone is incurring costs linked to the effects of climate change of around €300 million a year.
The good news is, with this change comes opportunity. It represents a chance to transform business, save costs, reduce risks and fuel innovation.
The report, Better Growth, Better Climate published last year by the Global Commission on the Economy and Climate shows that economic growth and action on climate change do not have to be in conflict; quite the reverse. The growth of cities combined with the rapid adoption of clean energy represents a multi-trillion dollar business opportunity.
We are finding similar opportunities in our own business. Reducing our environmental impacts has helped us avoid factory costs of over €400 million since 2008. We see our brands with a sustainable purpose accounting for half the company's growth in 2014 and growing at twice the rate of our other brands — consumers are voting with their wallets. Moving to sustainably sourced tomatoes has not only provided thousands of farmers in Maharashtra with guaranteed incomes and training, but it's also seen Kissan become the number one ketchup brand in India.
And it helps us secure supply. Over 55 per cent of Unilever's agricultural raw materials are now sustainably sourced, more than half way to our 2020 target of 100 per cent. To achieve this, we have been working with smallholder farmers to help them increase their yields; we've trained 800,000 so far. This improves their livelihoods but also future-proofs our business in a volatile world.
We are showing that it is possible to grow a business while reducing environmental impacts and increasing positive social benefits. And we're making good progress. In India, for example, we've reduced our waste by 88 per cent since 2008 — and now send zero waste to landfill from our factories. Smart redesign reduced our packaging by 700 tonnes of plastic and 4,900 tonnes of paper in 2014. And we've trained over 30,000 people across the country in water conservation and better agricultural practices.
What I find heartening is that those who get it most are the young. Not just the hundreds of thousands who joined the People's Climate March in New York, Delhi and in cities around the world but the young entrepreneurs I meet, who see how innovation can create better lives for millions of people.
In just seven months' time, leaders from over 190 countries will meet in Paris to sign a climate agreement. There is still a steep hill to climb. Just as the factories that first installed Arkwright's mechanised looms were attacked by some — there will be cynics and detractors, with vested interests or held back by an alarming apathy.
But business is stepping up to the opportunity. More and more are calling for a higher ambition from governments. Over 1,000 organizations signed the World Bank Carbon Pricing Statement, calling for governments to implement a carbon price. Members of the B-Team — including Sir Richard Branson and me — have called for a target of Net Zero Emissions by 2050, a tough goal but one that is necessary to minimise the risks to the world and maximise the opportunities for business.
So as we mark World Environment Day, the case for action on climate has never been clearer and I am optimistic.
I hope that when the world looks back on 2015 many years from now, just as we look back on Richard Arkwright's great invention, they may see this year as the tipping point which started the second great industrial revolution — the year in which governments, business leaders and civil society came together to lay the foundations for a better world.
(Paul Polman is CEO of Unilever and Chairman of the World Business Council for Sustainable Development.)
Read More News on
Download The Economic Times News App to get Daily Market Updates & Live Business News.
...moreRead More News on
Download The Economic Times News App to get Daily Market Updates & Live Business News.
...more
