♪ francine: it is ranked as one of the top companies in the world to work for, and its products are used by two billion of us every day. in just over five years since becoming ceo, paul polman has tied unilever's core strategy to having a positive impact on the environment. in an exclusive interview, i speak with him about sustainability, cop 21, and what it takes to be a good leader. thank you so much for speaking to bloomberg. there is a lot of talk about sustainability. what is your biggest hope for

sdg? paul: well, i'm actually very confident that we will, first of all, we have an agreement on the sdgs, where we have the 17 goals and 169 targets. in this decade, we have seen a few forces coming together. planetary boundaries starting to show up. nearly every week, you see a disaster hitting our planet, and in terms of our scarce resources, we see poverty, we see the migration issues in europe. all of these problems are exactly what is being addressed in the sdg's. which is how do we alleviate poverty now, once and for all, in a more sustainable and equitable way. and business wants to be part of that. because no business has a case -- making a case out of enduring poverty. if the societies don't function, then it is very difficult for business to function as well. francine: it looks good to say that. are you confident that actually businesses will really translate

into something concrete for their own businesses? paul: most businesses are already. because if you go back to the real reason for business -- and i'm sure there are exceptions -- but the real reason for business is to really solve some of these problems that are out there in society. the problems of food security, the problems of access to water, the problems of climate change. although they are challenges, are at the same time enormous opportunities to invest behind. technology allows us to do that now. and funding ultimately has to come from business for a great part of that. business is about 60% of the global gdp. 80% of the financial flow. and 90% of the job creation, these days. so if business does not get involved, i do not think we will even achieve these objectives. and responsible business people increasingly realize, not only from a moral or humanity point of view, that this is the right thing to do, that it's actually good for business. francine: why is it good for

business? paul: well, if you look at our business and the food business, if you would not tackle the issues of climate change, for example, you would probably see such a high volatility in supply. you might not even have supply as it moves around the world, that your business model is put at risk. you can see enormous parts of the world where people are not participating. in these parts of the world, you cannot sell your products. businesses increasingly see that it just makes sense to help be part of the solutions. francine: they do see it, but the problem is that it is often longer term. right? and when you have shareholders, you have pressure. and there's -- capitalism needs to be inclusive. but, again, was there a certain momentum that you think businesses mean business now? and want this to change instead of four or five years ago. paul: often, the shareholder pressure is confused with the short term. i think we should really put these two apart. there is a short-term pressure,

which certainly isn't healthy. the average length of a company's life is only 18 years. a lot of companies run themselves on quarterly profits or guidance that they give, and it results, sometimes, in dysfunctional decisions. if you want to solve these longer-term issues of food insecurity, employment, climate change, access to water, then obviously, it requires a longer-term. now this longer-term is actually in the interest of shareholders, provided you are a long-term shareholder. we make long-term decisions in our factories, where the payouts come after five, six years. or in our i.t. systems, our investments in people. why not do that in something that is even more important, which is the investment in humanity and our planet. increasingly, businesses see good reasons to do that. the technology is there. the financing is obviously there. the opportunities are there. actually, the alternatives of not doing it is starting to cost business more. when you have parts of the world -- let's take the drought in são paulo, not long ago. where their water reserves are only one third what they should be. which is not a very good situation.

the hydro dams do not give helio electricity. people do not have the water. when they do not have the water, they don't take the showers, they don't wash their hair, their electricity stops a few times during the day, if you have ice cream cabinets like us. so business sees these costs of these failures earlier than anyone else. and the solutions to avoid this often are enormous business opportunities. you see? the people that go to bed hungry are enormous opportunities to grow the market for food. 160 million people, there are enormous opportunities to provide nutrition and prevent that stunting, etc. these are really business opportunities. francine: in paris, do you think this year we are going to get an agreement? paul: oh, you will get an agreement in paris. and the reality is a lot of work has happened in lima, where the framework was put in place. good discussions in addis ababa for the financing for development. in fact, we should not forget that even today, the deadline is the first of october. when these countries can put in their individual national-determined contributions. or what they call "indc's". awful word, but that's what it is. we currently already have 58 countries that have submitted, and the 58 countries that have

submitted is about 70% of the carbon emissions. we are waiting for some big countries like brazil and india, but there is some encouraging noise coming from there as well. i was in brazil just three weeks ago. i was in india a few months ago. so we are waiting for that. what you see of all these submissions that are being done, that we more or less can get to 30% or 40% of what i believe is needed. there has never been an agreement, globally, in the first place. let alone an agreement for 30% or 40%. which, frankly, is more than anybody have thought. francine: you would be happy with 30% or 40%? paul: no, that is a starting point. the agreement in paris will probably make a commitment, like the g7 did when they were in germany, of net zero emission by the end of the century. which i, personally, think is too late. but let's at least have a point. that is very important for business. because once that clear agreement is reached, business has a framework to invest against. and when you have a framework to invest against, investments to accelerate this conversion to a

carbon free society will go faster. francine: why are you confident we will have agreement? it has taken us, what, seven years? paul: this is cop 21. the "21" stands for something. that's how long we've tried it. francine: so why number 21? paul: because finally, we have realized it's time to move. we never thought the effects as much as we start seeing them now. francine: coming up, we continue the conversation on sustainability. i challenge the ceo of unilever over consumer choices, responsible purchasing power, and the bottom line. paul: it is our duty as ceos in this world to set an example and be sure that we are not given by the shareholder primacy. that we are driven by the needs of these consumers. ♪

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francine: in 2015, unilever was awarded the top ranking prize in the sustainability leaders' survey for the fifth consecutive year. paul polman, the ceo of unilever, speaks to me exclusively about how this has shaped the business. do you believe that, for example, your customers want a company that is more sustainable? i have always been told -- actually some of your rivals -- say, well, everybody would love, for example, a shampoo that does good, but then when it comes to choosing the shampoo that gives you glossy hair or that does good, we always tend to choose the one that gives us glossy hair. paul: that sentence i would not disagree with, but that's actually not the right comparison. obviously, you need to provide a product that performs, and you need to provide it at a cost that is affordable. that is the job of any company to do that, in any industry. once you have do that, consumers really differentiate. would you want to buy from the company that has child labor in its value chain? would you want to buy from a company that does not have sustainable practices?

would you want to buy from a company that is more of a problem or contributes to the issues of society, not to the solutions that are provided? and increasingly, citizens of this world, again with the benefit of the transparency of the internet, are able to separate. and we see that in our own company. the expectations also go up. this is a moving thing. we, for example, moved from 10% sustainable sourcing of our agricultural base materials to now 55%, 60%. a tremendous improvement. what took us 150 years, we have done in the last five years five times. francine: why? paul: because we have put a new business model in place. we put our emphasis against that. we saw the importance of being closer in to our value chain. to better manage these volatilities. to ensure it is a more equal value chain. we have made changes in our business model, but, even though you have done five times more in the last five years than the

previous 100 years, let's say, the expectations of consumers go up again. they say it's fine that you are at 60%, but what about the other? it is fine that you have better wages in your value chain, or better conditions, but are these conditions good enough? it is a continuous, moving playing field that you deal with. francine: and this is, you think, because of social media and the fact that people share more information? is there a specific age group that is maybe more militant in wanting these kind of sustainability goals? paul: if you see in the absence of government, really, because the world has become so interdependent -- financial systems, technologies, etc. -- it is very difficult for governments, which are basically still under a system of bretton woods of 1948. where some institutions were designed, good institutions, at the time when 80% of the world was in europe and the u.s. now that the world is much more global, we have seen a shift to the south and the east. these institutions have not really adjusted. that is why we have such a challenge in global governance. but it is a challenge for all of us. it is not really to blame the politicians for that. what you really see is that business then has to step up and de-risk that political process. what you see, that citizens in

this world -- wealth might be concentrated in a few people, now, which is not good, 70% of the citizens of this world have access to a mobile phone. over half of them have access to the internet. 40% to 50% of the phones are smartphones. increasingly, they realize that they are connected. and there are enormous movements happening that actually drive change. in any country in the world. there are many examples of that. the group that really drives it are actually the millennials. if you ask the millennials, very few, actually, a minority, want work for big corporates because of an issue of trust or transparency. the same as they would say about governments. so people will not be able to attract the talent if they don't make a responsible business model. millennials also say it is fine. that we have a certain level of well-being. but what i'm really looking for is a little bit more meaning. a little bit more purpose. they tend to look and seek companies that have that

purpose. so putting that business model in place, like we did with unilever's sustainable living plan, we surged to now being the third most looked up company on linkedin after google or apple. or getting over a million people applying to us every year. and when we look at these people who come in, in the engagement scores that we get, we see that it is certainly driven by a purpose-driven business model. so attracting the right people, energizing the right people, are key ingredients for long-term success of a company. then, having more goals out there that you share with society in transparency. what is your water footprint? what is your carbon footprint? not only makes that -- makes you more accountable because of that transparency, but it also

actually gives more information to the financial markets, in which case there is a lower risk for them. and probably a lower cost of capital, which ultimately results in a higher return as well. francine: but not many people understand that. so when you talk about purpose-built business model, does this come from you because you've always been passionate about? does it come from you in the last year? was there a turning point? where you thought, "actually, this has to be done for myself and my business?" paul: i've always felt that we are not sitting here for ourselves. the role of business, really, is to serve society. that's how lord lever started when he invented the lifebuoy soap, which he even called "lifebuoy". was really in victorian britain, one out of two babies did not make it past the age of one because of issues of hygiene. the issues have just moved to sub-saharan africa or parts of india. so our business is very much a business that adresses these basic issues of society, which is really the sustainable development agenda. and i think it is our duty as ceos in this world to set an

example and be sure that we are not driven by the shareholder primacy, but that we are ultimately driven by the needs of these consumers. and if we cater to them very well, the business will perform. as unilever has shown until now. francine: but you must be disappointed that not more ceos think like you? paul: well, you should not sit here and get frustrated by the attitudes of others or the speed with which things move. you should just continue to focus on bringing the right people together, creating these tipping points, and moving these barriers. sometimes, yes, you would think, "why can we move faster?" or "why aren't more people doing this?" but who am i to judge? the better thing is to show that we can have a business model where we actually do well, but also do good for our shareholders and all the other stakeholders. and the more we do that, we see other people enroll. and the role of a ceo has quite drastically changed, actually, over the last few years. one of these reasons that you see short tenure of ceos, which is now 4.5 years for the fortune companies, is really because a lot of the ceos are not equipped for the challenges of today's world. so you cannot -- francine: which are what? paul: more complex, faster moving. issues of water, energy, food.

you know, you squeeze a balloon on one side, and it pops up on the other side. the need to work in partnership is not something that comes that easy to everybody. you need to navigate the field of governments, of civil society. having a longer-term view when there are lots of pressures on you that would point you to the shorter term. some people have more capabilities to move these boundaries or overcome that than others. you need to help each other. so we have a lot of initiatives to enroll others to move forward.. francine: next, we continue the conversation with paul polman, the ceo of unilever, about leadership and key values. paul: to me, a leader is not just because we happen to have this job. i also think a leader is not necessarily someone who leads from the front. a good leader these days is somebody who leads from the back like a shepherd with the sheep. francine: more from that exclusive interview, next. ♪

♪ francine: welcome back to leaders with me, francine lacqua. unilever is ranked as one of the top companies in the world to work for. its products are used by two billion of us, every day. in the final part of my conversation with paul polman, we discuss leadership. paul: leaders, to me, are not related to a level in the company or a title. for example, the medical community that immediately went to west africa at the risk of their own lives to fight ebola, those are real leaders to me. i work a lot with the blind and deaf, people who put themselves

24 hours to the availability of these people with disabilities. at pittance compensation. those are real leaders to me. the teachers in schools. and often, in fact, the teachers, the nurses, these people who are real leaders that positively impact others, are undervalued, strangely enough. so, to me, a leader is not just because we happen to have this job. i also think a leader is not necessarily only somebody who leads from the front. a good leader in today's world probably leads more from the back than the front, like a shepherd does with his sheep. ultimately, i hope they say for me not that they like or love me or all the other things, but i would hope at least to say that there is a respect. because ultimately, i think in the jobs that we do, these are very challenging jobs, to some extent. it also means that most of the decisions you are involved in are decisions that are not that easy. that have pluses and minuses. otherwise, they would not arrive at you. so you tend to, you know, not make friends. if you try to make friends, you will not do your job very well. i always say, "if you want a friend, get a dog." because in these jobs, you have to be often making tough decisions without having all the facts. that is why it is so important to be purpose driven.

because that is probably the only beacon that you can have. your own true north to help you navigate an increasingly more volatile environment. francine: how much do you think about the world? about making the world a better place? do you remember the -- was it a day or a week -- at what age did you start thinking, actually, this is important for the generations ahead? paul: to me, it has always been important. because that's how i grew up. i was born after the second world war. my only goal of my parents, who had to work very hard, because university was deprived from them, and other things, was to have their six children, give them a better future. to have peace in europe. and they were tremendously involved in community activities. they met in boy scouts. we continued all of that. i have always felt that the purpose that we are here for is to help others. i wanted to be a priest. i wanted to be a doctor. life sometimes goes in a different direction. i end up in business, but i find that in a company like this, i can make as much of a positive influence, and perhaps sometimes even more because of the skill, than anything else. so, it is all about leadership. at the end of the day, it is all about positively influencing others. if you can do that in your own way, wherever you are, you are a leader.

francine: so what do you look for in the managers that you are bringing up in the company? is it empathy? is it, again, respect? how do you choose? paul: well, there are the normal values that you have. i think that you find, in any leadership book and a certain level of intelligence, we all have. i think in today's world, next to the themes of integrity and the ones that you well know, i think you want people in this world that have a high level of awareness of the issues that are going on. not only a high level of awareness, but actually will be able to engage themselves. ultimately, that is what counts. and do that increasingly so with a high level of humanity and humility. i think those will probably be better leaders. now, these are leaders that obviously need to have new skills that come in, in this world, like systemic thinking. a thing everyone talks about, how do you put this complexity together?

distill it to simplicity and drive it into action. leaders that can work in partnership, that understand it is not about them but about that common good that we try to solve. leaders that take a little bit of a longer-term view and, above all, are purpose driven. i think there are many of them. but as i've said many times, we are short of leaders and trees in this world. the more we can create, the better will be. ultimately, it is individuals that change things. francine: how do you create? this is things you don't learn in a textbook. paul: you do not do that in textbooks, but you can identify people who come in. we, for example, have a lot of social entrepreneurs that we attach to our business model. they really bring in a fresh way of thinking in tomorrow's world.. we created the unilever young social entrepreneur award with the prince of wales.

we have 800, 900 people now applying every year. we get a lot of strength from that. in any the projects that we do, we want to work with partnerships. we do not really do any more projects alone. so be it the small farmers on the tea plantations, or be it the social compliance in your value chain, or be it working with your partners to get to sustainable sourcing, we really try to put these partnerships in place. with the dutch development agency, or u.s. aid, or with organizations like unicef, oxfam, or solidaridad, it keeps us, also, honest, because this is a moving thing. we do not have all the answers. we certainly cannot do it alone. we also have to be sure that in the approach of creating value across the total value chain and being sure that everybody is included and there is more equitable and sustainable wealth that we want to create, is that everybody is protected. and that can only be done if you work in partnership. i firmly believe that. francine: is there another ceo or a big influence in your life that you admire? paul: there are many people that you admire. the answers you normally get is to look at the gandhi's, or look at the nelson mandela's or look at the rosa parks'.

but what they basically tell you is these are people that are driven by a strong sense of purpose. if a person like rosa parks, by not standing up on the bus, can change the face of racial segregation in the u.s., then any individual in its own circle can make a difference. what we see is everybody can be a leader. what you have to do is encourage that. we have a lot of efforts in place. our training programs have been adapted. we work with these foundations. and have people worked there, so career paths have been changed from conventional career paths. we bring in examples from other companies. there are many ceos, but also others, that have shown that. and that gives us courage. but ultimately what gives courage to do what we do -- and it should be true for everybody -- is that we realize why we do this. ultimately, we do this because we actually belong to a very small percentage of the population, which i estimate to be about 2%. that was educated. that has comfortable jobs. that can do what they wanted, work in places where they want. do not have to about their families or if they have jobs. but that is not true for the other 98%. i firmly believed that it is our duty, really, to put ourselves to the service of the other 98%. i think the moment in life that you really become a leader, at whatever level you are, wherever you are in the world, whatever function, whatever job, is when you discover that it is not

about yourself. francine: do you think capitalism as a whole in three years will be more inclusive? paul: i hope so. what you have seen is there's nothing wrong with capitalism. we have all these big debates about capitalism, non-capitalism -- it is just a word. this year, we have a unique opportunity, in fact, with the sustainable development goals, to alleviate poverty. and with these climate change negotiations in paris to never have to deal anymore with the issue of climate change, if we decide to do so. actually, we have the tools, in the next 15 years, to do it. we do not have to send anybody to mars. so how can we drive the morality up? inclusive capitalism is actually moral capitalism, more than anything else. it is not about laws, rules, or regulations. in fact, they probably, in most cases, will do more harm than good. it is about us all rising to a challenge that is bigger than each of us individually.

francine: paul polman, thank you so much. paul: thank you. francine: thank you. ♪

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