Robert Guest, US Editor - The Economist, in conversation with: Paul Polman, CEO - Unilever.

RG: You talked about the value of humility within multinational corporations; that they should feel able to ask for help in achieving their ethical or environmental goals. Please could you elaborate? Perhaps you could give some examples of how multinational firms can work co-operatively with NGOs?

PP: The big social and environmental problems that the world faces today are too complex for any one government or any one company, however large or powerful, to tackle alone. The 2013 progress report of the Millennium Development Goals (i) demonstrates that we still live in a world where 1.2 billion people live in extreme poverty; one billion go to bed hungry each night; and 200 million are unemployed – 73 million of them being young people below the age of 24. Globally we need to create 600 million jobs by 2020 – and generate opportunities for the estimated 3.5 billion people who will make up the global workforce by 2030.

Action is needed on a very big scale. Civil society, governments and business must work together to create a demand for sustainable and ethical goods and services. Partnerships based on respect and mutual accountability are essential to move beyond pilot schemes and drive through bigger projects.

A great example is the Scaling Up Nutrition initiative, which, since its launch in 2010, has brought together multinational food companies and hundreds of other partners across 43 countries to create a movement for addressing malnutrition, especially in children. As a single company, we could not achieve that alone. Another example is the GAVI initiative, a public-private partnership focused on saving children's lives and protecting people's health by increasing access to immunisation in poor countries.

The private sector can help deliver responsible, equitable growth when it makes inclusive business part of its operating model. We have discovered that to do this well, you have to go right back to the beginning of the supply chain. In our Unilever Sustainable Living Plan, we have committed ourselves to engage with at least 500 000 smallholder farmers and help them improve the way they grow the food they sell us. We support multistakeholder initiatives like the New Vision for Agriculture, which has already resulted in national partnership programmes in twelve countries to achieve sustainable agricultural growth.

Connecting smallholders (including women) into larger supply chains is an integral part of these programmes. As a result, this year, Unilever and the Government of Tanzania have agreed to establish an ambitious partnership to reinvigorate the Tanzanian tea industry, creating 5,000 jobs, developing 6,000 hectares of smallholder tea farms and thereby improving the incomes and lives of approximately 30,000 people. Another example is the Tropical Forest Alliance, an industry coalition created to fight deforestation, which accounts for 17 per cent of global warming.

RG: You work with organisations such as the Consumer Goods Forum (an industry body that promotes responsible business practices), and have tried to curb the sale of products which come from illegal deforestation. What have you learned about how companies can collaborate to address ethical and environmental problems? What works, what doesn’t and why? Please give examples.

PP: I take note of an encouraging trend in which many businesses are leading the way and showing real commitments to sustainable development. For example, the Consumer Goods Forum (CGF) is a global network of about 400 companies with combined revenues of over three trillion dollars committed to improving lives through better business. They pledged to mobilise resources within their respective businesses to help achieve zero net deforestation by 2020. Recognising the need for government support, the CGF has created a public-private partnership with the governments of the USA, Norway, UK and the Netherlands to reach its goal. The partnership, known as the Tropical Forest Alliance (TFA), has drawn up an action plan and is now engaging with producing-country governments like Indonesia, Brazil, Colombia, Liberia and Côte d’Ivoire.

The TFA is also an example of some of the challenges in making big coalitions work.

  • Different partners have different interests: Inside these coalitions you have 1) rival companies 2) customers and suppliers 3) governments from different countries 4) NGOs who are, themselves, often competing with each other. It can therefore be difficult to find areas of consensus.
  • Competition law: Competing companies working in partnerships have to be very careful that they do not fall foul of antitrust rules.
  • Trust has to be built among the partners: Partners need to overcome the suspicions and prejudice which still exist between business people and civil servants and the cultural barriers between different nationalities. In the end this depends on personal relationships between people. The biggest problem here is the rapid turnover of individuals in both companies and governments.

Despite these difficulties the TFA, by bringing together industry, government and civil society, opens up huge opportunities. The biggest ones are:

  • Give governments the confidence to address some of the difficult political issues. For example an enduring solution to deforestation will only come about if India and China, which import more than half the world’s output of commodities like soy, palm and beef, demand certain minimum sustainability standards. The TFA can encourage the US and other governments to raise questions of this kind with policymakers in China and elsewhere. If China were to insist upon certain basic criteria for the products which it imports it would, overnight, transform the markets for soy and palm oil.
  • Mobilise coalitions to raise the standards of smallholder farmers. In general, whether you are talking about soy or palm, it is the smallholders who have the weakest environmental standards. To raise the standards of two million small growers of oil palm in Indonesia and four million small farmers of soy in Brazil will demand vast resources. Here governments and NGOs have a big role to play alongside private companies.
  • Persuade governments to modify their own procurement policies in such a way that it encourages sustainable production. If major governments around the world started to demand strict sustainability standards for the products they buy, it would send a strong signal to producers.

Finally, we have learned that certification schemes can help us in bringing scale. A good example is the Roundtable on Sustainable Palm Oil (RSPO). All of Unilever’s palm-oil suppliers are required to be RSPO members, which means commitment to sustainable certification and with plans in place to achieve this before a deadline. We need to work with all partners to make sure that certification schemes work. Regarding RSPO we learned that if we would like to source sustainably, we need to be able to trace our palm oil back to the plantation where it was grown, and trace its route through certified mills, transport and use.

i The Millennium Development Goals Report 2013 ( United Nations: New York)