Mumbai: It was meant to be a speech at an advertising conference, but Unilever Global CEO Paul Polman used the platform to articulate a new capitalist manifesto.
“All of us need to be net contributors to the society,” Polman said at the event organized by the Indian Society of Advertisers, a lobby group. “We must offer more than we take from the society. We cannot afford any more global warming. We cannot let people go hungry. And, we cannot allow people to work for abysmally low fees.”
Then came the punchline: “Capitalism needs to evolve.”
It was an address that started off on a far less sombre note, with Polman wishing the audience Happy Diwali (the festival of lights is on Sunday) and enquiring if they had had their filling of ladoos, an Indian sweet.
Then he got down to the business of articulating the challenge.
“Rapid globalization and the resulting interdependence of financial markets, technology and economic systems have made this a more complex world to manage,” said Polman. “Never before have we seen such rapid explosions in the global population, shifts in economic power or resulting pressures on natural resources.”
Even as companies address this, they will have to factor in several things.
The first, Polman said, is the emergence of a new Asian hemisphere. “It used to be that we would be following, call it the US model, all MBA educated, the US way of doing things. But clearly, with this changing world order, the US is shrinking back into its own territory, even more evident in the last few years. And unfortunately, as the shift in power continues, countries like India and China are not yet fully ready to step up to the global plate… so there is an enormous vaccum.”
Meanwhile, he added, the big issues that affect everything, remain.
“Unfortunately, our political systems are designed for local issues. Why don’t we solve the climate change issue, why can’t we solve the European debt crisis? Why has Syria become a tragic soap opera spectacle on television, without the world moving? That is the political environment we will see for next decade,” he said.
The second trend Polman highlighted is the power of the connected consumer. “It’s playing out in a surprising way. No one had expected Facebook to be the largest nation after India and China,” he said.
Pointing to what happened in Egypt, he said: “If they could get a regime out in 17 days, they can get an irresponsible company out in nanoseconds.”
The third trend is the “end of the era of abundance”. Polman said the world, and businesses, could not afford over-consumerism and global warming.
“If we can figure out a business model that gives rather than takes, we have an opportunity to grow and we will be accepted with open arms,” he said, adding that the only way to do this is to start taking responsibility, not just for the business but for the entire supply chain.
He explained that increasingly, social media acts as an amplifier of good and bad corporate reputation by putting companies in the public eye. “That is why we believe businesses need to develop new business models if they are to continue to prosper, business models that balance growth with positive societal impact, while reducing our environment footprint,” he said. “If I can achieve a 50% carbon cut in my own shop, that’s CSR (corporate social responsibility) at best. If I can achieve a 50% carbon cut in the supply chain, then we can make 10 times bigger impact on the environment.”
It is a myth, Polman said, that consumers do not care about sustainability. Every brand, he said, has to be a cause for social good.