SPEAKER 1: Ladies and gentlemen, please silence your electronic devices. Our program is about to begin.
MARTHA E. POLLACK: And welcome. It's really my pleasure to have you all here at the Hatfield Address, Cornell University's premier event for the exchange of ideas between the academic and corporate communities. We're honored to welcome Paul Polman, Chief Executive Officer of Unilever, as Cornell's 35th Hatfield Fellow in Economics Education.
As many of you know, designation as a Hatfield Fellow is the highest honor that Cornell bestows on outstanding individuals from the corporate sector. The Continental Group Foundation established the Robert S. Hatfield Fund for Economic Education in 1980 to honor its retiring chair, the late Bob Hatfield, Cornell class of 1937. The fund supports not only a public lecture by the Hatfield Fellow and associated events, but also the enhancement of the teaching of economics to Cornell undergraduates.
Paul Polman, who became CEO of Unilever in 2009, joins a distinguished roster of corporate leaders who have shared their perspectives with the Cornell community as Hatfield Fellows. As head of one of the world's great consumer products companies, Mr. Polman has been widely recognized for his leadership in the area of corporate sustainability-- a stance that has helped him secure Unilever a spot on Fortune Magazine's list of the world's most admired companies for six years in a row.
At the core of Mr Polman's vision for the company is the Unilever Sustainable Living Plan, which has guided the company since 2010. The plan aims to grow the company, while at the same time reducing its environmental footprint, and increasing its positive social impact. And it has three broad goals-- to help more than a billion people improve their health and well-being by 2020, to halve the environmental footprint of Unilever products by 2030, and to enhance the livelihoods of millions of people also by 2020.
The ambitiousness of the Unilever Sustainable Living plan becomes apparent when you consider that the company's products include more than 400 brands-- Lipton, Knorr, Dove, Axe, and Hellman's among them. Its products-- from tea to snacks, to soaps and other household goods-- are manufactured in more than 300 factories around the world, including in countries that have not traditionally prioritized environmental protection or human rights.
Yet by the end of last year, the company had made impressive progress towards its goals Moreover, in 2016, the company's Sustainable Living brands grew 50% faster than the rest of the business and delivered 60% of the company's growth. In fact, the company has delivered 5% top line growth every year over the last eight years.
I'm pleased to note that Unilever has been a Cornell partner for more than 40 years, providing support primarily to the Colleges of Engineering and Agriculture and Life Sciences, as well as to the Samuel Curtis Johnson Graduate School of Management. Also, more than 100 Cornellians are employees of Unilever.
Mr. Polman's commitment to sustainability expands beyond Unilever. He actively seeks cooperation with other companies to implement sustainable business strategies and drive systematic change. For example, as Chair of the World Business Council for Sustainable Development, a member of the International Business Council of the World Economic Forum, and a member of the B Team.
Mr. Polman has been closely engaged in discussions about the UN's Sustainable Development goals and action to tackle climate change. And in 2016, he was asked by the U.N General Secretary to serve on the SDG advocacy group. He's received several international awards for his work in sustainability. And last year, he received France's Knight of the Legion of Honor, in recognition of his efforts in galvanizing business action on sustainability, as well as for his involvement during the 2015 UN Climate Change Conference in Paris.
Paul Polman earned his undergraduate degree from the University of Groningen in the Netherlands in 1977, and an MA in Economics and an MBA in Finance and International Marketing from the University of Cincinnati in 1979. In private life, Mr. Polman is the founder and president of the Kilimanjaro Blind Trust, a nonprofit that supports people who are blind in East Africa. He and his wife are parents of three children. Their son, Christian, and his wife, Cleo, who are both Cornell alumni, recently had a baby. So now Mr. Polman can add grandfather to his already impressive list of titles.
We are delighted to have the opportunity to hear Paul Polman's thoughts on the case for sustainable capitalism as our 2017 Hatfield Fellow. Please welcome Paul Polman.
PAUL POLMAN: Thanks, Martha, for that kind introduction. I'm always happy that my mother is not in the audience. It's good to be back in Cornell. When my son was studying here, I tried to go by as often as I could. Every visit to the US, I sort of sneak by here-- try to avoid the winters. But I've thrown fish on the ice. I've stayed in the Statler many times, and shouted the words during the games that you're not supposed to shout. And the guys watching to put you out. In fact, they smuggled me in, because they didn't have any tickets. But they knew how you could get in without paying, which I thought was pretty cool.
And then the chicken wings in the Statler were very good. I haven't had them yet, but I'll try them again before I leave. Since my wife isn't here, she'll let me do it. Anyway, it's an honor to be here, and certainly to get the recognition. And that's obviously reflecting the work of a lot of people, so I'll dedicate it to them.
And as Martha said already, we enjoy very strong links with the University, and that's what we're happy about. My son having graduated here, it was obviously no issue for me to find the time to come. It's unfortunate that he's now living in London, and they just got a baby. It's actually my third one, believe it or not-- grandchild.
They met here, and that was very special for them. In fact, believe it or not, not to diverge from my talk, but his wife is from Singapore, studied law here. And they met at the dentist, believe it or not, here on campus. Because the dentist showed up late, and she was sitting there waiting. And then my son came. The joke in the family is that he said, open your mouth type thing. [LAUGHTER] But anyway they're happily married. And they love Cornell. So here we are.
Anyway, I was looking at Robert Hatfield, and he's certainly an extraordinary man and a business leader. I was looking at him when he was born. In fact, this would have been his 90th year, if he would have been still alive. He passed on two years ago. But it's an exemplary life that he lived, where he combined his civic duties with his business responsibilities. And having this recognition in his name is certainly an honor.
I was also looking at some previous people you have recognized. And I notice, with my friend Ratan Tata, we're the only known Americans on the list. So you have a little bit unconscious biased-ness here. But I was also glad to see that people like Mike Weinberg, who is doing an outstanding job as leader of ENY, got recognized not long ago. In fact, we are together on ICASA task force to move these financial markets to the longer term.
It's something that's not easy to do. We call it focusing capital on the long term. And obviously, you need the accountants for that. We cannot move the wealth if we don't change the things that we measure and the things that we treasure. Obviously, I'll talk about a more sustainable and more equitable future, because that's probably the most important topic that we need to discuss.
But I was also glad to see what you're doing here at Cornell-- obviously, integrating sustainability into your curriculum, putting the solar panels in on campus in not negligent amounts, making a commitment to be carbon neutral by 2035, which not many universities have done. And then obviously, looking at many other ways that you can have an impact-- local sourcing of your food in your cafeterias, and all these things. Small things, but adding up, obviously, to a bigger impact.
I also like your mission to affect the change on local and international scale, and to enhance the lives and livelihoods of people around the world. That's a noble mission. It's a lot of words, and obviously we will be judged by what we do, not by what we say. But also your Business School itself made it very clear that our business is a better world. So your mission is very well aligned with what I would love to be the Unilever mission that we're trying to make come alive-- to put ourselves, really, to the service of others.
It was Charles Dickens who wrote in 1859-- a little over 150 years ago-- "It was the best of times, it was the worst of times," in his book, the Tale of Two Cities, written during the French Revolution. And I think it would summarize the situation that we find ourselves in. He called it "the spring of hope and the winter of despair." And in fact, if you look at the last 20 years or so, we probably have had the biggest improvement in lifting people out of poverty in this world.
Less people go to bed hungry than at any time in history-- obviously, percentage-wise. More people are in education. Although a lot more to do, women have actually more rights and access now than at any time in history. People live longer, are more educated. More people have access to health care. Maternal health has significantly improved. Access to water has significantly improved. It's actually a good time to be born. Despite what you might read in the newspapers when you open it, it's a great time to enter this wonderful world.
Just in the last four decades alone, 500 million people lifted out of poverty. The Millennium Development Goals, by the way, that were started [? under ?] [? covienam ?] in the year 2000, and meant for 15 years, had as a simple objective to halve the number of people living in poverty in this world. At that time, it was defined as $1.25 a day. And Lo and behold, we have achieved that.
But unfortunately, that's one half of the story. And obviously, the job of halving the people living in poverty now needs to be finished. And we frankly have a lot to do, still. It is very clear that the job is not done, but if we don't finish it, we actually risk reversing it. And we're in a very crucial time in the history of mankind-- I think that we all need to be aware of-- that require us to step up in a different way than what we've done.
This enormous progress that we've made has also brought us some challenges. These challenges should probably not surprise you. The first thing is that, if you look at some of the challenges that we need to address despite this progress, is that we still have 800 million people today living in this world that go to bed hungry, not even knowing if they'll wake up the next day. We still have 2 and 1/2 billion people not having access to decent sanitation. 600 million people not having access to clean drinking water. In fact, 3.2 billion people in this world still are deprived of basic human rights.
Women are still the most discriminated group in this world. Most of the issues that need to be solved, women pay a disproportionate price on them. 4 million people die unnecessarily-- children under the age of five-- from infectious diseases like diarrhea and pneumonia that can simply be solved with an act of hand-washing.
And if that isn't enough yet, we have a system where the top 1.2 billion people in this world of 7 and 1/2 billion people consume about 75% of the world's resources, and the others aspire to live like that. And this already at a time that we will exceed the planetary boundaries in many respects, and that is increasingly feasible to many people. A world where the top eight people-- the top eight people not to be named, but well known-- have the same wealth as the bottom 50% of the world population. Where the top 1% of the world has the same wealth as the bottom 99%.
Now, my argument to you is very simple-- that in any system where too many people feel that they're not getting the benefits or not fully participating will ultimately reject against itself. And I think one of the reasons you see the Brexits, the enormous political tension in this country, without entering into that debate. You see it happening all around you, from Catalonia, to UK, to here, to many other places in the world. So we need to figure out how we evolve capitalism.
I don't want to enter into a discussion if capitalism is good or bad, because at the end of the day, it's just a word. It doesn't really interest me. The question that is far more important to ask is, how do we need to evolve it? Just like Franklin Roosevelt in this country invented the New Deal-- which actually was a very good deal for America, which made it a little bit more inclusive, which got you into health care, which got you into Social Security. Which got you into a society where, actually, people were taking care of others.
I always say very simply, the definition of sustainability is as if the future of your children and their children is more important to you than your personal greed. What we have to deal with right now is, unfortunately, too many people that feel they are in charge acting on their own personal greed. That is one of the things that we need to solve.
Now, to find these solutions are not so easy, because there are many things that are coming together here at the same time that have never come together before. Because so many people have been lifted out of poverty, it actually happened in the East and in the South-- places like China have played a big part of that. And so have many other countries. As these countries are coming out of poverty, unfortunately, the global governance system hasn't adjusted.
Any company-- a company like Unilever-- will have new strategies every five years or 10 years, increasingly more often, where you have to adjust your business models to stay relevant. But our global governance system still dates from Bretton Woods in 1944, when 44 countries, by coincidence, signed the agreements that created the OECD, or the World Bank, or the Security Council, the WTO. And frankly, that was very effective at that time, but basically dominated by the US and Europe, which was about 85% of the global economy.
Now, we have a quite different situation, and these institutions haven't recognized that-- one of the reasons that you have the Asian Infrastructure and Investment Bank popping up in many other things. Many of the issues that we need to face-- the financial markets' interdependence, climate change, technology. All these issues are not being addressed anymore in the way we used to, where people would sit together at governmental level-- people that we had elected, representing us-- to try to find solutions.
Now, it looks like, on a daily basis, we're in this famous prisoner's dilemma or a zero sum game. It's challenge number one is global governance. Challenge number two should not surprise you really, is the limits of planetary boundaries. We've lifted so many people out of poverty-- obviously, provided goods and services to them, but we've done it in a linear way. Meaning we dig in the Earth, we take material out of it, we make something out of it.
And when we have made use of it in one form or another, we ditch it in landfills or in the ocean, up to the point now that, in about 20 years time, you'll have more plastic in the oceans than fish. In fact, it's highly likely that any fish you're eating will already come with a certain amount of plastic that then ends into our part of the food chain, with all the consequences accordingly.
Johan Rockstrom, who runs the Stockholm Resilience Institute, talks about nine planetary boundaries that define the health of this planet Earth-- biodiversity, climate change, nitrogen levels. And in fact, four of these boundaries are already what he would argue beyond the minimal acceptable levels. We are playing with Mother Earth in a way that we will not win. In the battle between nature and us, nature will win.
Half of the wild species will disappear by 2020. Half of the [? furtherized ?] species will disappear by 2030. It's our turn if we don't stop that-- become conscious that we have to live in harmony with planet Earth. Hubert Reeves, who is a philosopher from Canada, said it very well in one of his books where he said, "Man is the most insane species. He worships an invisible God to destroy a visible nature, not realizing that the visible nature he destroys is the invisible God he actually worships in the first place." And that is what we are doing, day in, day out.
And you'll see-- the insurance industry this year has paid out more than any in previous histories. The intensity of climate change effects are enormous. You've just suffered from that in Florida, in Texas. You're seeing now the raging fires in California. They absorb your newspapers. But I just came back from the Assam region, the Bangladesh region, and Nepal, where we were working on the issue of the Rohingyas. 3,500 people have lost their lives. I haven't found a US paper yet that actually reports on that.
Most of the refugees that we have-- about 40% of those are climate-related refugees. There's all the tension that that brings with it. 70 million people right now being displaced from their homes. 8,000 more coming every day. And frankly, it could have been us. But we've just been darn lucky to be born on this side of the world.
The third challenge that we have, next to the global governance and the planetary boundaries, is really the technology challenge. Without any doubt, a tremendous advantage. We couldn't do any more without our mobile phones, the internet, and many other things that technology brings. The access this has given us to education, financial inclusion, health care. We know the advantages.
But it's also causing an enormous angst. It's causing an enormous angst between the people that are there and the people that are not included in the technology revolution. Business models are disrupted at a pace faster than economies can adjust. In fact, the losses of jobs in American manufacturing industry-- 85% of that is due to technology. It's not due to globalization at all. It's in fact the opposite.
But your president has obviously smartly played on that. But it's technology that is actually doing that. The other thing that technology is clearly allowing people to do is, increasingly, while the wealth might be concentrated, power is actually very dispersed, because of that technology. But unfortunately, it also makes us increasingly more polarized. The amount of information that we get around us, and the type of information, is increasingly narrowing our perspectives that we get on the issues. Discussions are summarized in 140 characters now. And that's unfortunately the world we live in.
Some people would argue that technology-- what we could call the forced Industrial Revolution-- Internet of Things, artificial intelligence, robotics, et cetera, is going to destroy up to 1.9 billion jobs. Now, that is going to happen at a time when we already have 3 and 1/2 billion people in this world living in marginal jobs, 400 million officially unemployed. And still have 2 to 2 and 1/2 billion people coming into this wealth.
One of the biggest challenges, I would argue, coming out of that is actually the challenge of social cohesion that comes with it. And part of the issue we now see in Catalonia, for example, is you have a huge population with about 45% youth unemployment that has been out of work for more than five years. In this case, more or less 10 years since the financial crisis. Once you've been that long out of a job, it's very difficult to get back into the workforce. So enormous challenges that we have to deal with there.
I just wanted to move fairly quickly forward, to say, so what are we doing about it? The big question that we really have in front of us is, how do we generate and distribute wealth that is more needed? We're not able to grow these economies. How do we do that, and do that, actually, in a more equitable and a more sustainable way? And we'd be well-served to do that.
More sustainable is in harmony with planet Earth. More equitable is to make it a more inclusive growth, so that people feel that they are part of this, and actually end up lifting more people out of poverty. Now, the answers are not so simple, and require us to do things differently. Because think about the challenges that we've given ourselves. And they're good challenges, by the way, and I believe we can solve them.
The biggest need that we have, I would argue in a minute, is the need for leadership-- for human willpower to do something about it. Feel always a little bit awkward when I'm in a university environment to tell you that we don't need more PhDs. But frankly, to solve the world's problems-- to come to a more sustainable and inclusive growth-- we don't need more PhDs. We really need human willpower-- people who don't care about the next quarter, but care about the next generation. People who really put the interests of others ahead of themselves, knowing that, by doing so, they'd be better off themselves, as well.
What are these challenges that we need to solve at the same time? Why it's such an enormous difficulty. As I said, we need to move the global economy from a linear consumption model to a circular consumption model. Circular is how the Earth functions. The planet never wastes a resource. Everything goes back. We have invented waste. It wasn't there before. How do we decarbonize the global economy? We've become carbon junkies. We don't know how to grow anymore unless we do it with carbon. So how do you decarbonize that?
Challenge number two-- how do you move the financial markets to the longer term, when they've become increasingly shorter term? Taking the oxygen away from any business. And the statistics would support that. The amount of publicly-traded companies in the US has halved. The average lengths of the life of a company in the US was about 65 years when I was born. It's less than 17 years now. We're starving the oxygen of the economy.
We also need to get a more inclusive growth. Not easy to do, where there is a vested order that obviously is very happy with the way things are going, and frankly, advocate for things that will probably increase the divide even more. And finally, we need to solve all these challenges-- from circular economy, to decarbonizing the economy, to make it longer term, to make it more inclusive, at a time, as I mentioned, that global governance isn't working.
Not surprising that trust is at a low level. If you look at the latest Edelman survey-- the 2007 Edelman Trust Survey that comes always out at the time of the World Economic Forum-- you see that about 50% of the population, if you want to, have absolutely lost trust in business and government. And these numbers have gotten worse over time. By the way, in media, as well, and in CEOs-- that list of lack of trust goes on. And you won't build prosperity, you won't to get people to work together differently, if we don't create an environment that is obviously more trustworthy-- to be able to attack these challenges.
I always look at the Financial Times. I don't need to do much. I just take the Financial Times of the day. I apologize, I live in Europe. You probably take The Wall Street Journal, although the Financial Times is probably a little bit better paper. But you take the Financial Times of today. First article-- BMP, a big French bank, is getting out of shale and tar energy-- totally decarbonizing their portfolio. Equifax with their security issues-- big, big issue of privacy discussion. Hong Kong-- investigating 15 banks that have manipulated IPOs.
The founder of Umart, which is actually an e-commerce like Amazon in this country, put in jail for fraud-- today, by the way. Catalonia asking for independence. The UN stepping out of UNESCO-- a little bit of a tragedy. But I think the world will come over that. Kobe, a steel company in Japan, apologizing today on television for providing subpar quality data on information about their steel.
eBay and Netflix today, in court in the UK for combined only paying 1.2 million pounds in tax-- a tax rate that's lower than the Virgin Islands, the Bahamas, or some of the other places. And then obviously, Brexit would be a good dominant. That's about the average number of articles, with the average titles, that you find nowadays in a newspaper. So no wonder that trust is very low.
Now, the good thing is, we have a solution. In September, 2015, in the UN in New York-- not far from here-- 193 countries came together to sign what is called the Sustainable Development Goals. Never have we had such an agreement with so many countries signing at the UN. The last one was the Law of the Seas, in fact. It's got about 140 countries to sign. And the objective of the Sustainable Development Goals is very simple-- to use the next 15 years to irreversibly eradicate poverty, and to do that in a more sustainable and equitable way.
What's wrong with that? It's a plan for our planet, for our people, for peace, for prosperity. But above all, if we want to make it come alive, a plan of partnership. We created a commission with the objective to reach about 1,000 CEOs, to get them to integrate the Sustainable Development Goals into their business plans. To bring a purpose to a business is really what this is about.
I've always believed that when we have this many challenges, a business can not just be a bystander, because they need this world to function for themselves to function. There is no business case in poverty. And when the political process is a little bit more difficult, it is what it is.
Business actually has to step up to the plate to help de-risk that political process, just as they actually have done in Paris with the climate change agreement, where we got a reasonably aggressive agreement-- well beyond what countries would normally have done-- because of citizen pressure. But I would argue also of pressure from the business community. When the US and the Supreme Court overruled some of these states which wanted discriminatory laws against the LGBT community, again the business community stood up, and got into a situation that I would find more acceptable, from a respect and dignity point of view, than otherwise would have happened. Business increasingly has to step up to de-risk that political process.
Now, we created this commission to look at the Sustainable Development Goals, because there are 17 goals, 169 targets-- it's way too much for business. Most of the CEOs in business don't have the capacity to manage so many things. So we thought, how can we make this a little bit more palatable to make it attractive to business?
And when we looked at four areas-- energy, food and land use, cities, and mobility-- we actually found a opportunity with the Sustainable Development Goals of, as a minimum, $12 trillion, if not $30 trillion. And an opportunity to create about 400 million jobs in this world. 400 million jobs, as a minimum. $12 trillion more in a global economy. We've never had that opportunity.
Many businesses are dying to find a way to grow their business models. They haven't found any of that. And here we actually have it. In fact, we've come to the point in this world that any investment we make around the Sustainable Development Goals has a significantly bigger payout. Which is interesting, because business might not have the moral compass, but business certainly wants to see something with a higher return. So if you cannot swing the CEOs on the argument of everybody should be having an opportunity that we've taken for granted, you certainly should get them along now on the economic argument.
Let me give you one example. To implement these Sustainable Development Goals would cost us about $3 to $4 trillion a year. Sounds like a lot, but that is about 3% to 4% of the global economy. The cost that we have currently today in this world on climate prevention and wars is 9% to 12% of GDP. We're spending 9% to 12% of GDP to deal with the symptoms, and we refuse to spend 3% to 4% to attack the underlying cause. Sounds crazy to me.
The 800 million people that go to bed today cost only $80 billion to solve. In fact, we're wasting 30%, 40% of the food in the value chain. Wouldn't it be smart to waste a little less? Economically justifiable, and give it to those people? We'd have a lot less issues. In fact, the food waste is about $800 billion a year. $800 billion in food waste, $80 billion to not have people go to bed hungry.
In many parts of sub-Sahara Africa or India, about 160 million children every year are stunted, which simply means not getting enough of the nutritional values in their first 1,000 days. They're scarred for the rest of their lives. Cost of GDP for these countries? 10% to 12% of their economy.
Women-- just giving women everywhere the same opportunities to education, land rights, financing could potentially increase the global economy, according to McKinsey, up to $28 trillion. Keeping a girl one year more in school increases her income by 20% for the rest of her life. Any of the goals you look at is a payout that is higher than any of the businesses probably have today.
We are at a point today which is actually certainly very encouraging-- where the cost of not acting is becoming higher than the cost of acting. On climate change, cost is 5.3% of the global GDP, according to the World Bank. Only 3% to 4% needed to make this total SDG agenda come alive. So until we start shaping up and do better, I don't think we deserve the right to call ourselves the most intelligent species.
At Unilever, we said something very simple. Let's be sure that when you have so many issues, if you want to be around as a company long term, and don't fall into this trap of 17 years or less that we're currently at, be sure that you are a positive contributor, not a negative contributor. Be a giver, not a taker. In that case, society will let you be around. So run your business not for your shareholders or shareholder primacy. But run your business, really, for the people you need to serve, who give you the reason to be there in the first place.
It's not easy to do. Unlike CSR, we said, we do it, obviously, across our total value chain-- from farm to fork, if you want to. One of the reasons we stopped quarterly reporting and moved our compensation systems and everything to the long term is that we very well understand that these issues of food security, or climate change, or poverty, or youth in employment cannot be solved on a quarterly basis. They need longer term plans.
We also realized that we couldn't do it all by ourselves. So what made this scary plan even for us acceptable was, frankly, two things. By publicly acknowledging that we didn't have all the answers-- which seems to be difficult for a lot of CEOs to do. And that we needed to work in partnership to solve it. The steps to go through is, obviously, to get your own house in order in the first place. You cannot deserve a seat at the table if you don't do your own things first.
So we move-- in the US and Europe, already done. But we move everything to green energy. Everything has a payload of less than three years right now. No question. Easy to do. I wish others would do it a little quicker. We moved all of our factories to zero waste. People said, that cannot be done. We did it two years earlier-- 500 plants, over 500 factories-- by just thinking about it differently. Our value chain, we said, let's do this sustainable sourcing. So we get our palm oil, our soy, our beef, our pulp-- whatever we need now-- from sustainable sourcing.
So that's the first step-- get your own house in order. The second step, then, is-- work through your value chain. You have more influence with your suppliers, obviously, than with anybody else. Get them to sign up the same to human rights standards in your value chain. Be sure that your people get fair wages. That they are being treated in a way that you'd like yourself or your family to be treated. A little bit the golden rule. It's actually a good principle-- do unto others as you'd like to have done unto yourselves. Interestingly, it's the only rule that's in all religions in the world.
Many companies think that when they outsource their supply chain, they can also outsource their responsibilities. But the citizens of this world don't accept that anymore. That's why you see so many headings every day in the Financial Times. After taking the value chain, you can do and work on more transformative things. Work it on an industry association level, or other bigger organizations, like the World Business Council for Sustainable Development, or the World Economic Forum, the Consumer Goods Forum. There are many of these organizations now.
The Consumer Goods Forum made a commitment that by 2020 everybody would be out of illegal deforestation. Companies like Walmart here in the US, or Kraft, or Pepsi, and likewise, other major companies globally, that represent $4 to $5 trillion of sales-- a big movement. The World Business Council members identified up to 60% of the solutions to the carbon emission between now and 2050-- well ahead of the agreement even that was set in Paris.
By working together with industries, you can actually get bigger breakthroughs. We put all the ice cream manufacturers together. And the beverage cabinet companies-- Pepsi, Coke, Nestle-- for ice cream ourselves. And we move all these cabinets to natural refrigerants. That's 3% of global warming. Transformative changes by working together.
And then-- obviously, not surprisingly, go more into advocacy. You have to help governments to be sure that your rules and regulations actually work for transforming these economies, not against it. And we still have many rules and regulations that actually have the unintended consequences. Why? Because the life of politicians has become so short that they tend to 100% focus on the symptoms, and really don't have the patience and the time to address the underlying causes.
Now, in order to make this Sustainable Development agenda come alive, it's absolutely true that business has to take responsibility more than anything. The 3 to $4 trillion agenda has to be compared with overseas development aid of all countries together of about $150 billion. $150 billion on overseas development aid. $3 to $4 trillion on the global agenda. So we need to move these billions to trillions. That can only come from the private sector.
Not surprisingly, the private sector is about 60% of the global economy. It's about 80% of the global financing, and about 90% of the global job creation. So that's why these partnerships are important. Einstein said it well when he said, "the definition of insanity is to try to do the same thing over and over again and to get different results." It's not going to work. We need to do things differently.
And for that, we need this trust level to go up. Trust can only go up with transparency. So I would advocate, the first thing you need to do as a company-- not only run your business with a responsible, purpose-driven model, but run it with a high level of transparency and accountability. In Unilever, we put out 50 targets. We have them audited, and anybody can look at them. Transparency builds trust, which is the basis for prosperity.
You also need leaders that work more in partnership, obviously, which means give and take. It's not easy to do that. To develop those leaders is clearly something we don't have enough of. You need leaders that are more purpose driven. You need leaders that are more long term focused, leaders that understand that they have to put the interests of others ahead of themselves. So leadership is probably the shortest commodity that we have, next to trees, I would argue.
Now, the good thing is that we have a young population. And that's why it's great to be here at the University. Half of the population is below 25 years old. In fact, your next election in the US will be the first election where Millennials will have the majority of the votes. And the same is happening in Europe, but certainly in the emerging markets, where the population is significantly younger.
So my argument is, always be sure that we enroll the young. It is their future. The next 15 years, if you are 25 years old, it's between 25 and 40 is the crucial part of your life. So it's not only enrolling the youth in it. It is making the youth actually active part of designing the agenda. I would argue they shouldn't have a seat at the table-- they should have the table in the first place.
Now it also is for very good reasons. Because if we like it or not, there is no doubt from even the research that young people have the skill sets that we probably don't have anymore. More collaborative, without any doubt. More creative, more observant, more curious, more willing to experiment. Better networked in the way that they have grown up, questioning the status quo. More visionary about the changes that need to happen. So absolutely crucial to get these young people at the table.
What type of young people do we want? The ones with a high level of awareness-- absolutely key-- that understand what is going on in this world-- understand that complexity, can do some systemic thinking, and drive that down to simplicity and action. So awareness is not only enough. But you need people that are also willing to have a high level of engagement.
Fortunately, as I look at social entrepreneurs in many parts of the world-- in Europe now, half the new businesses that have come up are social entrepreneurs. In Africa, one of the most entrepreneurial continents with young people. I'm very confident that we have these people out there with that high level of awareness and engagement. And then, obviously, with a certain level of humanity and humility.
Great networks, by the way-- the Ashoka Fellows and actors, or WE Day. Or I just came from Colombia with One Young World, where thousands of young people come together, and pledging, and helping each other, obviously, to put these social business models together. So if we can connect these networks, there's an incredible power for change.
I am convinced that the best thing we can do to move it forward is to get increasingly the companies to report-- or integrate, if you want to-- the Sustainable Development goals. We have to move some boundaries that drive behavior, which I can talk about at another time. But at the end of the day, we need leaders that actually, as I mentioned, are far more purpose driven, and put the interest of others ahead of their own. It really boils down to that, I think.
The Dalai Lama said it very well when he said, "If you seek enlightenment for yourself simply to enhance yourself and your position, you miss purpose. But if you seek enlightenment to enable you to serve others, you actually are with purpose." And I think that captured it very well.
Let me just summarize by my final observation before we'll take the Q and A's. And that is just to realize once more all of us sitting here in the audience, or myself included, how darn lucky we are. I was born in the Netherlands. We had six children. My father worked in a factory. He could have never, ever sent us to University. But obviously, that was his wildest dream, coming out of a World War II.
Be sure that the next generation has it better than I have. Be sure that we have peace. Be sure that the communities in which we live and operate function again, for the benefit of all of us. That was their goal. I grew up in a country where there was enough food. I didn't have to worry about going to bed hungry. I had my bar of soap, so I made it past the age of five. I had my toilet and sanitation. And yes, in the Netherlands, education was free.
So if you belong to that group of people in society that can do and like what they want-- not have to worry about too many things, move around, be part of the global community, educated-- you actually belong to only 2% of the world population. Then my simple request to you is, if you belong to the 2% of the population, it is your duty to put yourself to the service of the other 98%. Thank you very much.
We have some time?
MARTHA E. POLLACK: So we have time for just a few questions. Does anyone have a question? There we go. Why don't you come to the mic.
AUDIENCE: Hi. Thanks for this great lecture. I'm Celine. I am an alumna. I'm co-founder of Plastic Tides, a non-profit that I founded at Cornell with two classmates back in 2014. We were actually the first to sample the presence of microbeads in waterways, and found some right here in Cayuga Lake in Ithaca. We helped ban micro-beads in Tompkins County, which eventually led to a statewide and nationwide ban.
Now, Unilever was-- not is-- one of the companies producing microbeads and using them in products that end up washing away right into the ocean, because they go past the drainage. And this affects the food chain in general. So I would love to know what your recovery strategy is for this disaster. Because even though the microbeads aren't being used anymore by Unilever, they're still in our oceans. We've sampled Cayuga Lake. And the other question I have is, more broadly, how do you address plastic pollution?
PAUL POLMAN: Yeah. And that's a very important question, because it's a typical thing what I said. When they built the Statue of Liberty on the East Coast of the United States, they forgot to build the Statue of Responsibility on the West Coast. So if you are a company our size, you have to take responsibility of the total value chain. So microbeads, actually, you find in many products out there still, unfortunately. And they serve a scrubbing function, but not really an actual function for the product.
Unilever went out of that already, about 2 and 1/2 years ago. And any company we would acquire, which we still do, we take them out of microbeads. It is, to me, also surprising-- and your concerns are real-- with what we now know, that companies are making public statements that say, we will get out of it by 2020, and still get away with it. It's like saying, I'm going to pay men and women the same in 10 years time. You just don't get away with that anymore. So I'm surprised about that.
And we're actually pushing hard for legislation, as well, to get out of microbeads. California is now doing that in the US. Many countries in Europe have done that, and we're happy about that.
That brings you to the second question, which is very important. We have created an enormous garbage belt. Every second a dump truck of garbage gets dumped into the ocean. That's what we're doing. So that's not going to last either. So again, we've taken an initiative. We are part of the founders of the circular economy with Ellen MacArthur, and are pushing that very hard.
And if you look at plastic now in the world-- I'm making it very simple, but 20% of the plastic that is being used in the world can actually be recycled. But the reality is only 13% is being recycled. So the 13% could be 20%. And then the next 50% is when you really design your packaging to be recycled-- not having different plastics, etc. Again, we've taken that commitment, and we're actively doing that. I haven't seen many other companies do that.
So that would bring it to 70%. And then the other 30%, we need technology. That would be medical waste. It would be contaminated paper or some other things. So there we need technology to work. And again, we are working on some efforts to stimulate that.
Now, the good thing on the oceans now is separately clean-up efforts happening in the oceans starting to work. There's a Dutch guy-- interestingly, again, a 25-year-old guy called Boyan Slat-- who has a system that uses the currents of the oceans to start to take the plastic out. But the main thing is prevention, not the treatment of the oceans. The main thing is to set up recycling systems.
I was just with the president of Peru yesterday, and had dinner with him. And his wife is from Wisconsin like my wife is. So I relate to Cheeseheads as a Dutchman.
But the reason I saw him was to set up, in Peru, a recycling system. We're working with [? Zhakoby ?] and Indonesia to set up recycling systems. Because while it's our plastic, and we should be held accountable, we cannot be fully responsible for all of that if countries, also, don't set up these systems. So these are some of the things that we do as a company to try to take that responsibility, and then get other companies there to get impact at scale. And working that with NGOs and governments. And that is the type of partnership I talk about.
MARTHA E. POLLACK: No, because we only have time for one more question, and he's been waiting at the mic. So I wanted to let him have a turn. Thank you.
AUDIENCE: Thank you very much.
PAUL POLMAN: No, thank you. Keep fighting for it, though.
AUDIENCE: Thank you very much for this opportunity and for this wonderful presentation. My question is on the sustainable and affordable energy. I was part of an online course on stuff like this. And one of the participants said something which I think is true, and shocked me at the same time. He said, we talk about building this sustainable environment. That there are so many people that really want to use renewable energy. But the reality is that they can't pay for it.
And there was one project we were working on before I came to the US. It's on solar installation-- rooftop type. And we took a survey of people to find out if they are really interested, and found out that a lot of people were actually interested, but the costs of paying for that solar panel up front is way above what they can afford.
And then we tried a model that, supposing you can actually pay for it over three years and six months, will you be willing? And we broke down the cost. And many of them said, yes, they can. But what are businesspeople thinking about these type of interventions? It's not about giving grants, or giving free. They're willing to buy. But the financial system is not there to support it. Thank you.
PAUL POLMAN: Which country are you from?
AUDIENCE: I'm from Nigeria.
PAUL POLMAN: Nigeria. Good. Thanks. Well, so I could make it a Nigerian story, if you want to. And you had a very good environmental minister called Amina Mohammed, that you know very well, who is now the undersecretary at the UN. And she's very much into, obviously, providing energy to all. The reality is, you look at it today in the US. Today, the White House decided to get out of the Clean Air Plan. A stupid thing to do. There's no reason to get out, because the market's already moving at 100 miles an hour.
The US has already, this year alone, invested $50 billion in wind and solar. And there is no coal mine that has been opened anymore in the last 10 years, bar one in Nebraska. And it's, by the way, not creating any jobs, because it's all automated. And Nebraska by itself is actually one of the greenest energy states.
So green energy is there and it's moving. We have now 25% of the world on the price of carbon. China is just moving. And that will further accelerate the move to clean energy. Price of solar now, in many jurisdictions-- states, or cities, counties-- is below the price of conventional energy. So people can afford it more and more. We've moved our whole company to green energy, and it's actually cheaper energy. Once you've paid for that equipment, you get it for free.
Now, you raise a problem with people at the bottom of the pyramid, which might not be able to pay. But the good thing is, there is enough abundance of money to find alternative models that are really happening. The reason you see it so quickly taking off is you don't have to pay anymore. Let me tell you why.
In this world right now, we have a real economy of $100 billion. But we have created financial instruments that are about $600 to $700 trillion-- six, seven times more than what the global economy needs. So one of the reasons why you find so many people getting loans at zero interest rates are $12 trillion dollars in this world is actually negative interest rates. So what we need to do is try to get this money to be used for countries like yours and others to stimulate the development. And that can only happen if governments start to think differently about the money they have for the World Bank.
So one of the things we are now working, for example, is if we can use that money that the World Bank gives or the ODA to just take risks away, then business will come in with other funds. And you can leverage up and make these billions trillions.
I was speaking to President Santos the day before yesterday in Colombia, and he has introduced a carbon tax in Colombia that gives him an income of about $200 million a year, which is not bad. And actually a good commitment from a country like that, even. But what I was telling him is, of the $200 million that you get as income guaranteed from your carbon tax, take $100 million and put it in a Green Fund to protect the Amazons.
And that money, because you get carbon tax every year, is actually to serve the debt of this climate bond. Private sector would easily come in and subscribe over a billion dollars to that bond. So all of a sudden, $100 million becomes a billion, because he's taken the risk away. And then you spend all that money on solar panels, on green energy, intensification of agriculture, protection of indigenous tribes. And that is the type of direction we need to go.
We are working as a company ourselves with Norway, who was very progressive on that, in one of these blended funds in Indonesia, where we've been able to install green energy to about 25,000 people, created jobs for about 50,000 people in palm oil, put our own fractionation unit there. But it's different development models that need to work together.
In many of the parts of the world where you are now, you can get your subscription models. Companies like M-Pesa, that you're familiar with, would actually allow you to subscribe to something like solar panels, and turn off if you don't pay. Every day you pay $0.02 or $0.05, based off your use. And you pay off your equipment.
Mohammad Yunus with his Grameen Bank, actually, is one of the ones who is installing these now in Bangladesh-- a country, by the way, that is going very fast in solar, where people don't have any money-- on this microcredit model. So there are many things out there that now will give people access in a better way.
But I think we need to look at it more on a global level, a little bit bigger than that, obviously, to really move the needle. I'm confident that that's happening, again, because of the laws of economics. Thank you.
MARTHA E. POLLACK: Thank you very much. Unfortunately, we're out of time. But please join me-- but wait, come for a minute.
We want to thank you so much for coming, and give you this symbol of our thanks for giving a lecture.
PAUL POLMAN: Thank you very much.
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Can capitalism be sustainable, in more than one sense of the word? For Unilever CEO Paul Polman, the answer is a resounding yes. Polman, the 35th Robert S. Hatfield Fellow in Economic Education, presented “The Case for Sustainable Capitalism” Oct. 12 to an audience of more than 200 people in Alice Statler Auditorium.
Polman addressed the changing role of business and why new forms of leadership are required to help address the world’s biggest challenges, highlighting the urgency of accelerating progress on the Sustainable Development Goals, a global framework to eliminate poverty, end inequality, and tackle climate change by 2030.