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Stopping Deforestation Makes Business Sense, Says Unilever CEO

Cutting back on cutting down trees can also drive profits, according to Unilever CEO Paul Polman
Paul Polman


Paul Polman, Chief Executive Officer, Unilever, United Kingdom speaks during the session 'The Global Development Outlook' at the Annual Meeting 2013 of the World Economic Forum in Davos, Switzerland, January 24, 2013
Credit: Sebastian Derungs/World Economic Forum/Wikimedia Commons

Business is the solution to environmental progress, not its enemy, said the head of one of the world's largest corporations.

Paul Polman, CEO of Unilever, accepted the 2013 Commitment to Development "Ideas in Action" Award from the Center for Global Development last night. Unilever was recognized for its work in reducing deforestation through its sustainable sourcing of palm oil and pulp and paper products.

"First and foremost I am a businessman; I cannot deny that," said Polman in his acceptance speech. Like most corporate leaders, he excels in tracking progress and measuring success, important tools for both building a successful company and rooting out the cause of environmental degradation.

"Otherwise, you don't move things forward, and I think that's one of the things that businesses are good about," he added.

Owner of such brands as Ben & Jerry's, Dove and Hellmann's mayonnaise, Unilever has successfully sourced 100 percent of its palm oil from certified sustainable sources, three years ahead of schedule, according to the company's 2012 annual report. Unilever alone purchases about 3 percent of the total global palm oil output. It has set a goal to trace 100 percent of its palm oil back to the plantation on which it was grown by 2020.

Polman has exhibited leadership on the issue not just through Unilever, but through his work in the Consumer Goods Forum and the Tropical Forest Alliance, industry groups whose members have committed to sustainable sourcing of materials.

Capitalism, said Polman, has been "an enormous positive force in this world."

But the financial crash of 2008 also showed the limitations of capitalism to help society. Enormous debt, aggravated by overconsumption, had left a large part of the world's population behind and disregarded the "natural capital," or the value of ecosystems.

Taking advantage of scale
The company pulls in about $67 billion in revenue annually. It is this size and scale that have allowed the company to influence deforestation policy.

"You take Unilever: We have 2 billion consumers using us every day; we are in seven out of 10 households globally," he said. "If you have that scale and reach, it's an enormous possibility to transform markets."

Palm oil can be found in a variety of foods, personal care products like soap, and biodiesel. The rapid expansion of palm oil, driven by rising global demand for food and fuel, has been linked to widespread deforestation in Southeast Asia, the source of about 85 percent of palm oil. About 10 percent of global carbon emissions is linked to deforestation.

In the last two decades, the area of palm oil plantations has expanded nearly eight times in Indonesia alone, according to a recent Agriculture Department Foreign Agricultural Service report. Growers have been accused of clearing native forests, removing habitat of endangered species and violating the rights of forest dwellers.

Unilever was also a player in palm oil trader Wilmar's recent agreement to adopt a no-deforestation policy, which prohibits its suppliers from establishing plantations on lands with large amounts of carbon -- like peat soils -- or lands with a high conservation value (ClimateWire, Dec. 8, 2013). Wilmar controls about 45 percent of the palm oil market.

Making all deforestation 'illegal'
"The Wilmar commitment sets a new global standard for industry and creates new constituencies in forest countries among the private sector for improved land-use policies and improved law enforcement," said Frances Seymour, a senior fellow at the Center for Global Development and an expert in forest policy. "Mr. Polman's actions give us hope that market transformation can be achieved and that we can stop tropical deforestation."

Polman organized a global outreach program with businesses that, together, make up 10 percent of global gross domestic product.

"Among CEOs, Polman is seen as the go-to guy for sustainability leadership," said Glenn Hurowitz, a palm oil campaigner and executive director of sustainability consultant group Catapult. He "knows how to use Unilever's purchasing power, leverage and influence to help transform the entire supply chains of some of the world's most environmentally intensive commodities."

Language is key in generating a response. Polman has made a habit of placing the word "illegal" in front of deforestation.

"The reason it's illegal is that everything we do now cannot be reversed, and by calling it illegal, by the way, I get far more people to agree with me," he said.

"There's something still in our humanity, in our values, that we don't like to do things illegally. We should have called the whole thing 'illegal climate change,' and we would have solved it."

Polman is anxious for other large palm oil traders to make similar commitments to Wilmar.

"If we can get Sime Darby or Sinar Mas or Cargill or one or two others to join, you're at 70 percent; that's a tipping point," he said, naming some of the largest traders after Wilmar. "Again, if we don't do it, our business is at stake."

Reprinted from Climatewire with permission from Environment & Energy Publishing, LLC. www.eenews.net, 202-628-6500

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