In some scenarios you have argued that companies need to think beyond net zero. What do you mean by this?
[PP] I will put it very simple in the talk I will give in a minute. This world is 4.6 billion years old. I. If I put it on a scale of 46 years, the human beings have only been here for 4 hours, the Industrial Revolution started 1 minute ago, and in that one minute we’ve cut down half the world forests. WWF just published today the Living Planet Report, we’ve lost nearly 70% of the world species–birds, mammals, reptiles, amphibians. In this region, you’ve lost 94% of the species.
Earth Overshoot Day, which is the day that we are using more resources than the world can replenish, this year was July 28th, so we are living well beyond our planetary boundaries, and Mother Nature is sending us invoices, sending us the bill.
The floodings in Pakistan, one third of the country under water, the size of Great Britain, the heat waves that we are seeing, the floods and droughts. Chile has the biggest drought in the history of Chile, not far from here.
So, the costs that we are starting to pay from this consumption model, this production model that does not take into account the planetary boundaries is becoming higher and higher, to the point that we are at the moment, that business is incurring higher costs from the results of destruction of our planetary boundaries than it would cost them to avoid these issues in the first place.
So, it is rapidly moving from risk management to seizing the bigger opportunities. And companies that think in a way that we call restorative, reparative, regenerative are actually positioning themselves well for the future and create business opportunities that will be more profitable, will be actually more sustainable, will make the companies more resilient. But it needs a shift in mindset, a shift in mindset from moving away from being less bad to thinking positively.
So, building models to think net positive is really what the future is all about. Otherwise, we are not going to survive, we end up in the statistics of the other 94% of the species.
What is the first step that a company has to take to travel the net positive?
[PP] So, there are four or five steps, if you want to call it that way, and the first one starts with the leaders of the company itself, to be aware of the issues in the world. If you are not aware, you cannot take the right actions either. So, you have to bring purpose to your business and really figure out why you are here. It cannot be just to make money; it has to be to attack a problem in society.
The second thing that a company needs to do is to take responsibility of its total impact in the world. Many companies only take responsibility of what you would call Scopes 1 and 2. Are you familiar with Scopes 1 and 2? Which is basically what is under your own control. But you have to take responsibility of your total handprint in society. If you are in the food business, let’s say like Unilever or like Alquería, then you have to look at health and nutrition, you have to look at deforestation, you have to look at food waste, you have to be responsible for all of your business, all those impacts. That’s step number 2.
Step number 3, then, is to measure your impact. We treasure what we measure. So, if we measure where we have the biggest impact, we can also focus on where we want to make the biggest improvements.
And step 4 is, then, to say I can do so much alone, but I need to do more, and that I need to do with partnerships. It’s to form the partnerships.
And then the final step is, for the bigger, more courageous companies, they work together with civil society and governments to drive the broader societal changes.
So, those are basically the five steps that every company can go through and that the book explains in a very simple way to make it easier for people, and it gets a lot of resonance. The book is on the best seller lists in all the countries and is doing very well, but the feedback that we are getting from people is “I now understand the issues better,” “I now understand better how my company can help find the solutions,” “I will set more aggressive targets,” “I see the power of partnerships,” and that is exactly what we are trying to achieve, this mindset shift that results in the different actions than what we are currently doing. Is that clear?
Yes, it’s clear, thank you. What do you mean by the term “Corageous Companies” in your book?
[PP] I like the word courageous because it comes from the French word coeur, which is “coraje”, “corazón”. It starts with the hearts. We need to bring humanity back to business. To many businesses, it is basically the balance sheet, the profits, the laws, “I win, you lose”; they are still doing numbers, they are trading in the financial markets.
What this is about is to put humanity in the middle, to understand that we can only be long-term successful if we live in harmony with planet Earth but also with our fellow human beings. And it takes courage for companies, you need “coraje”, is that the word in Spanish? You need courage to take responsibility of your total impact in the world.
You need courage to set targets that are really needed, that science tells us that are needed, not just targets you can get away with. It takes courage to work together with people because it means that you have to compromise. It takes courage to work on the broader, bigger societal changes that need to happen. So that’s why I like the word courage, because at the end of the day this is not a crisis of technology, this is not a crisis of climate change or food security or inequality; these are symptoms. At the end of the day, this is a human crisis of apathy, of selfishness, of greed, and it takes courage for people to take that understanding and to make these actions at the level that is currently needed. And that’s why we call it courageous companies that are made of courageous people.
How does a company thrive by giving more than they take?
[PP] You know, it’s not different from any human relationship. If you have a family, you invest in your children because you want them to have education, you want them to grow up, you want them to have a happy family. Some people call it unconditional love. I always got more from my mother than I gave my mother. I got more from my father than I gave my father. That’s why we have those strong relationships.
Why shouldn’t that be the same with business? Shouldn’t business have strong relationships with society? Shouldn’t business have strong relationships with the people that they serve? Shouldn’t business have strong relationships with the people that work in the business? Shouldn’t business have strong relationships with all the suppliers and partners and the value chain that make the business successful?
So, if you provide living wages, the people will be more loyal. If you help create clean air so the people can breathe it, they will be happier. If you ensure that your employees’ children can have education, they will look forward to a brighter future. If you can help restore biodiversity instead of destroying it, your business can continue to benefit from the services that nature gives you.
So, thinking about giving is actually receiving. The more you give in life, the more you receive. As business is made up of human beings, it’s not made up of robots, the same philosophy applies. The more business gives, the more it receives. Some people think that greed is good, but generosity will always win over time.
So, you have to be smart to invest in a way that also assures that business can continue to succeed. This is not philanthropy we are talking about, but increasingly we can see that to attack these issues is actually less costly than if you would not attack the issues. Look at the cost of Covid, 17 trillion dollars in Europe and the US alone. Covid is a zoonotic disease, like Ebola, Sars, Zika, Asian flu, and the list goes on, because we destroyed biodiversity. The cost we’ve payed for them is much higher than what we would have to invest to save biodiversity. In fact, right now, for every dollar we invest in saving biodiversity we have a 16 dollar return. It’s a huge business opportunity! That’s why Elon Musk moved to electric vehicles, it’s a huge business opportunity! That’s why you see such a fast growth of solar and wind, it’s all the new electricity in the world that has come in in 21 and 22, it’s green energy. Because it makes more economic sense.
So, with all this, we are now at a tipping point where you actually can think about giving more than you take and be stronger financially as a company as well. That’s why the message of the book is not only bringing humanity to business, but it is that it is an enormous opportunity, it’s probably the biggest business opportunity that we have in the history of mankind. And, frankly, we don’t have any alternative. The alternative of not doing anything and getting climate change to three and a half or four degrees, of pushing more people into poverty, of getting more conflicts in the world, having more refugees moving around is not a world that I want to live in.
So, going back to where we are from is just not an alternative. Also, when you ask people, 95% of the CEOs that you ask in this world want something that functions better for them. And I would argue that 100% of the people in the world want something that is better for them than where they came from before Covid.
So, this is an ideal moment: it’s the growth story of the century.