The former CEO of the British consumer goods giant Unilever shared his opinion on how the business should work in the coming years, checking the names of Tesla’s Elon Musk, the Danish energy company Orsted and Beyond Meat.
In comments made during a discussion moderated by Karen Tso of CNBC at the Mobile World Congress in Barcelona, Paul Polman suggested that the company’s performance could be boosted by environmental, social and governance (ESG) factors.
“You have to make sure that whatever you do when you run a company, you get the results,” Polman told a panel on Tuesday.
“But I increasingly think we have evidence that operating in a more inclusive, very interested, long-term model gives you a better chance of getting a return on shareholders over time.
Polman said that although short-term shareholders – whom he called speculators – will always be around, significant change is taking place.
Read more about clean energy from CNBC Pro
Polman added that “hard data” shows that “companies with more gender diversity perform better, companies that internalize climate challenges and reduce those that perform better.” This also applies to companies dealing with “human rights issues” in their value chain.
“Higher market value”
Expanding his perspective, the CEO – who is the co-founder and co-chair of the Imagine social venture – said that from airlines to food and mobility to shipping, “companies that are more active in trying to mitigate these negative externalities are actually more high market value. ”
“Although standard accounting systems have not yet caught up, the financial market is now able to assess what some people call ‘intangible’ problems,” he said. “They are material and are extremely important for the future of a company.”
He cited energy companies Vattenfall and Orsted as examples of companies moving in that direction.
“Either you have Teslas or you have Beyond Meats who are going for food alternatives. They are much more valued than the previous ones, which have a harder time changing. “
Tesla specializes in the production of electric cars, a technology that many consider crucial when it comes to reducing urban air pollution.
Although Tesla is focusing on something that could play a key role in the planet’s transition to more sustainable forms of transport, it is not immune to criticism.
In February, the California Civil Rights Agency filed a lawsuit against the company, accusing it of racist harassment and discrimination against black workers, which have been going on for years at the company’s car assembly plant and other facilities in the state. Tesla called the case “wrong.”
Sustainability debate
With growing concerns about sustainability, the environment and climate change, the discussion and debate on the ESG is becoming increasingly important. Polman’s comments reflect a growing trend toward the ESG, which has a fair share of supporters and opponents.
Last summer, the CEO of Credit Suisse told CNBC that the coronavirus pandemic “has significantly accelerated the trend towards ESG and sustainability.”
“The demand we see – both from our private customers and from institutional customers – for ESG-compliant products is growing,” said Thomas Gotstein, who spoke to CNBC’s Jeff Cutmore. “It’s also seen as an opportunity to improve returns.”
“There is no contradiction between sustainable investment and sustainable returns, but in fact the opposite,” Gotstein added. “In many cases, sustainable investments actually have a higher return than unsustainable investments.”
In fact, many corporations around the world are trying to improve their accreditation for sustainability by announcing zero targets and plans to reduce the environmental footprint of their operations.
However, in some circles there is considerable skepticism about many of the sustainability claims that companies make, given that specific details are often difficult to find and the dates for achieving these goals are sometimes decades apart.
This often leads to accusations of environmental cleanup, a term Greenpeace UK’s environmental campaign team called “PR tactics” used “to make a company or product look environmentally friendly without significantly reducing their environmental impact.” .
– Laura Kolodny of CNBC contributed to this report