Paul Polman’s address to the Federation of Indian Chambers of Commerce & Industry.
Introduction
First let me thank Mr. Sanjiv Mehta, Mr. Subhrakant Panda, Dr. Anish Shah, and Mr. Arun Chawla for their continued leadership of FICCI and for bringing us together in this important conversation about India’s future.
I was thrilled when Sanjiv asked me to address you all. I have a great admiration for Sanjiv, a dear friend and also an amazing business leader.
As former Global Chair of the International Chambers of Commerce, FICCI is also close to my heart.
Especially during my time as Global CEO of Unilever, I had the opportunity to visit India extensively and meet with current and former leaders in government and business, and I witnessed firsthand the enormous transformations you have helped bring about.
You are a strong institution that has actively changed the face of India over its nearly 100 year existence.
As FICCI you have lead on many initiatives aimed at driving a more sustainable and equitable growth, and it is also starting to be reflected in the national policies.
There is equally admiration for India’s and especially Prime Minister Modi’s leadership, through uncertain times nationally and, increasingly, at the global stage as well.
A world in trouble
Every decade has it’s stories – it’s trends, its big events.
We are two years into the current decade, and some of those stories are emerging clearly.
A big one is instability, and the interlinked nature of the crises we face.
The words of the year, which describe our challenges well, are polycrisis and permacrisis.
A polycrisis is where a number of depressing factors have combined to create one big, alarming super-situation. A permacrisis is an extended period of instability and insecurity.
Globally, inequality is on the rise. Extremism is on the rise. Nationalism is on the rise. All while trust is in decline.
I think we can all see that the period of relative geopolitical calm is over, at least for now.
I do hope, as Prime Minister Modi recently wrote in the Telegraph newspaper, that “our era need not be one of war”.
But for now the conflict in Ukraine is displacing millions of people and sending a shockwave through the global economy, and shows no sign of ending.
India, as an increasingly important member of a globalized world, is not excluded from this. Your pick-up in inflation, reduced exports and high fuel import costs are just some indications.
COVID-19 is not over either. As the direct result of the destruction of our biodiversity, it’s not a black swan event as we know; there will be more pandemics.
Climate change is already with us: the devastation of floods, droughts, erratic monsoons, sea level rises. It’s moving faster than we are, and so are its costs.
Globally, inequality is on the rise. Extremism is on the rise. Nationalism is on the rise. All while trust is in decline.
On many issues and in many places, politics is stuck. The shape and patterns of international trade are changing as a result.
The effect of it all is uncertainty and upheaval, which threaten our common values and our shared future, and which make it harder to do good business and build the thriving companies we want to lead.
India on the rise
This is one story. A not a very happy one. But there is another story too, happening at the same time.
A different story; a story of growth. Innovation. Ambition. Investment. Renewal. Pride. Jobs. Youth.
That’s India’s story. Where I’m sitting, you can’t go more than a few days without reading an article telling you that this is India’s decade. The world is in awe of what you are achieving, in this highly unpredictable environment. Soon expected to be the world’s third largest economy; your GDP per capita expected to more than double by 2031; India expected to drive about a fifth of global growth over that period.
With size comes responsibility. Many have also been encouraged by Indian leadership on the world stage, including in your taking over of the G20 Presidency.
You can’t go more than a few days without reading an article telling you that this is India’s decade.
Your government pushing for more ambitious international commitments to phase down fossil fuels at the COP27 climate summit in Egypt last month, even if it did not succeed, was well noted.
So were the recent statements from your Prime Minister calling for an end to Russian aggression in Ukraine.
And reassurances that the environment and sustainability will be priorities at home and abroad.
And within India, there are many good things happening that are creating lessons for others. The digitization of your economy. The progress on decarbonizing your energy sector and ramping up renewables. The strides forward in regenerative agriculture, just to name a view.
Like every large economy you have big and serious challenges – not least in eradicating poverty and bringing security and dignity to all parts of Indian society.
And of course, nothing can be taken for granted: no nation is immune from the tectonic shifts taking place in geopolitics, in the global economy and in our changing atmosphere.
But, still: the relative stability in your economy; the growth projections in spite of everything going on; the management of COVID-19; the investment in infrastructure; your growing middle-class; the continued steps to make it easier for foreigners to invest here. All these things are not happening by chance.
This is a country being led – including by its business leaders – at a time when, globally, leadership is in too short supply.
My question to you is: how are these two stories going to come together? A world in trouble. An India going from strength to strength. And what role is Indian business going to play?
Is it one of being dragged along at slow pace as governments and multilateral institutions collectively struggle to implement needed changes? Often shrinking the pie.
Or is it one of actively driving this conversion to a more equitable, inclusive world thereby growing the pie for all?
The biggest opportunity
Not acting is not an option. Deloitte puts a price of $178 trillion USD by 2070 on climate inaction alone.
Conversely, action to hit net zero could add $43 trillion to the global economy. The cost of inaction is now starting to significantly outstrip the cost of action.
No wonder leading companies are accelerating change. Industry, more than ever, must support and drive the transition.
The cost of inaction is now starting to significantly outstrip the cost of action.
Governments have a role to play, but they can’t do it alone, and they increasingly lack money, innovation, financial and human resources, and, in many places, the needed political will.
Time is running out. To transition to stable, clean and inclusive economies in the time available, we will need to move with scale well beyond the industrial revolution and with speed much faster then the technological revolution.
The deadline for action isn’t 2070, it isn’t 2050, it’s 2030.
Not easy, otherwise others would have done it before us. But needed. There simply is no alternative.
You have it in your three P mantra: Profit, People and Planet. All reinforce one and other.
In my time at Unilever, we ranked number 1 in the world for sustainability every year. We were consistently voted one of the best places to work. During that time, we increased shareholder returns by 290%.
The opportunities now are even bigger than they were then.
Aided by accelerated technology, signals from the marketplace, changing regulatory frameworks and higher cost of not acting, this is becoming the business opportunity of the century. Important forces are beginning to converge.
More governments waking up to the climate emergency and setting more serious targets.
More investors decarbonising their portfolios – and seeing the benefits of doing so.
More in industry signing up to science-based targets, and more coalitions forming, with CEOs coming together even in the most hard-to-abate sectors, such as shipping, aviation or cement, taking steps to decarbonise their business models, across the value chain.
It’s not surprising given the growing evidence, every year, that companies which score higher on ESG more likely outperform their peers.
And given that the signals from the marketplace are there. Citizens around the planet want to work for and buy from businesses which are actively making their world better. This is especially true for millennials and Gen Z.
We have seen more momentum in the last 5 years than in the last fifty. But we’re still not moving fast enough – and it is in businesses’ clear interests to make sure we accelerate.
Net Positive
This is why we wrote Net Positive. To help companies seize the opportunities, and bring speed and scale to our collective efforts.
It’s about setting the audacious targets the world needs, not just the ones you know you can deliver – even when you’ll probably fall short.
In essence, Net Positive companies thrive by giving more than they take.
It’s not enough any more to run a company that is a bit “less bad”, or does a bit “less harm” through conventional Corporate Social Responsibility.
At a time that we have overshot the planetary boundaries, less bad simply will not cut it anymore.
It doesn’t fix our problems; your people won’t have it; your children won’t forgive you; and increasingly your shareholders are demanding the change.
The days we live for now demand companies which actively restore and regenerate our world and our societies. This the idea behind Net Positive.
It’s about making profits from solving the world’s problems not creating them. About leaving the world better than you find it.
Taking carbon out of the air: creating more nature and biodiversity; replenishing water; creating more equity; advancing science, democracy and truth.
It’s about taking responsibility for your company’s total impact, including direct impacts, across your value chain.
It’s about serving all of your stakeholders – workers, customers, suppliers, the local community, the planet, even the next generation – in order to build lasting value, over the long-term, including for your investors.
It’s about setting the audacious targets the world needs, not just the ones you know you can deliver – even when you’ll probably fall short.
All this is not easy, but it is possible and needed.
It’s about using your power and influence not to lobby for special favours from government, but to give our politicians confidence that, if they are bold, if they find ways to break political stalemates, business is with them.
Ultimately, it’s about being a systems thinker and partnering with others – even your competitors and your critics, to drive transformative change.
Leadership and willpower
All this is not easy, but it is possible and needed.
We have the money , the technology , and increasingly the economic incentives. We now need the willpower.
At the beginning, I spoke about polycrisis and permacrisis. Perhaps the biggest crisis of all is actually the crisis of apathy, of selfishness and of greed.
And so the solution, above all, has to be a move toward moral leadership and willpower.
Toward courage, which comes from the Latin cor, or heart.
If we could change ourselves, the tendencies in the world would also change… We need not wait to see what others do.
Mahatma Gandhi
Our world desperately needs more leaders.
Leaders to drive tipping points.
Leaders who have empathy, integrity and ambition.
Leaders who can see the bigger picture, and who are motivated to put themselves in the service of others, understanding that this is where they find themselves. After all “the best way to find yourself is to lose yourself in the service of others.”
In FICCI we are therefore blessed. Your willpower and leadership have already helped build tremendous companies, and you are in the driving seat of one of the most extraordinary chapters in India’s history.
You are transforming your nation, and with ambition your companies can play a huge role in transforming our world,
If not now, when?
If not India, who?
To quote the great Mahatma Ghandi one more time: very simply, “the future depends on what we do today”.
Thank you very much.
