The Net Positive Manifesto: Is the world better off because your company is in it?

Article originally appeared in Harvard Business Review, September-October 2021

By Paul Polman and Andrew Winston

What's the article about

A net positive company is one that “improves well-being for everyone it impacts and at all scales—every product, every operation, every region and country, and for every stakeholder, including employees, suppliers, communities, customers, and even future generations and the planet itself”.

The idea reflects the huge shift towards companies embracing action on environmental, social, and governance issues. Recent push factors include the UN Sustainable Development Goals, the Covid pandemic’s effects on the business environment, growing recognition of the potential benefits of sustainability versus the cost of global disruptions from climate change, and the fact that it has never been easier or more profitable to shift a business to low-carbon operations. The core technologies of a clean economy have become radically cheaper and are being implemented at scale (90 percent of new energy put into the global grid in 2020 was renewable). Alongside these factors, investors, financial regulators, business customers and employees are also pushing for change.

Dive into the details

Paul and Andrew identify four critical paths for businesses in their 2021 book Net Positive: How Courageous Companies Thrive by Giving More Than They Take.

At odds with Milton Friedman’s doctrine that earning a profit (for shareholders) is the primary responsibility of a company, the first path to becoming net positive is serving stakeholders, then shareholders. The idea is that a business that serves the world does better over time. For example, the Unilever Sustainable Living Plan set targets that include slashing the firm’s environmental impact in half and improving livelihoods for millions of women and smallholders in the supply chain.

Companies also need to take ownership of the social and environmental consequences of their actions, including those they see as beyond their control. This requires thinking about all the ways they affect people and the planet, and new tools can help. For example, the Greenhouse Gas Protocol identifies three “scopes” of emissions – from the fossil fuels burned on-site, from the generation of electricity purchased from the grid, and from the operations of value chain partners (suppliers, logistics, and customers). Looking at the wider picture, it doesn’t make sense for a firm to implement carbon-reduction goals but then lobby against policies to reduce emissions. That’s not net positive, no matter how well they manage their own footprint.

Embracing deep partnerships is the third path. This involves working with peers as well as critics. With regard to the former, the Consumer Goods Forum brings together over 400 of the world’s largest consumer goods retailers and manufacturers to collaborate on issues such as standardising the sizes of shipping pallets so that trucks can be packed more tightly, saving money and fuel and reducing carbon emissions. As for critics, NGOs can make life difficult. However, when Unilever opened up its Vietnamese business to an audit by Oxfam, the resulting standalone report helped them identify ways to improve the company’s human rights performance they hadn’t thought of.

At the next level, the fourth path is to tackle systemic challenges by changing the system itself rather than always working within it. This requires rethinking advocacy and relationships because the for-profit sector, civil society (such as consumers, nonprofits, and other advocacy groups) and government all need to be in the room. As one example, Unilever has maintained a consistent presence in Brussels in order to stay involved in EU policy making. Net positive companies also propose solutions rather than wait for (or complain about) regulations that tell them what to do. In the spirit of being proactive not reactive, Microsoft has pledged to be carbon-negative by 2030, investing in carbon sequestration projects and so helping new technologies get to scale.

The takeaways

Heading toward net positive does not mean being perfect or doing everything at once. There will be short-term trade-offs in the service of larger goals. However, good returns demonstrate that sustainability is not an antibusiness plot to undermine free markets. The net positive model allows companies to thrive because of their efforts to serve the world.