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Story Publication logo December 8, 2014

Peru: The Saving Face of Corporate Climate Change


Image by Justin Catanoso. Peru, 2013.

In the most biologically diverse place on earth, rising temperatures are causing trees and plants to...

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Unilever CEO Paul Polmon. Image by Justin Catanoso. Peru, 2014.

The man behind the podium Sunday at the Global Landscapes Forum, an offshoot of the annual United Nations negotiations on climate change being held here in Peru, spoke in blunt terms:

"Commercial agriculture accounted for 71 percent of tropical deforestation in the last 12 years. That translates into the loss of 130 million hectares (321 million acres) of forests. In fact, that loss contributes about 15 percent to global greenhouse gas emissions, more than the entire transport sector. These are the inconvenient facts."

In other words, the massive companies that grow our food are in part responsible for aiding and abetting practices that are slowly killing the earth by recklessly tearing down forests to grow crops.

The speaker was pointing a finger of blame at one of the most environmentally damaging industries on earth. In doing so, Paul Polmon, the CEO of England-and-Netherlands-based Unilever, the world's second-largest consumer goods conglomerate, was in essence pointing a finger at himself. It was both disarming and, well, breathtaking.

"For those of us in the food sector, like my company, we know that climate change cannot be tackled without a fundamental change in the way that agriculture – the world's oldest and largest industry – is practiced," Polman told an audience of several hundred.

"In fact, most CEOs, I'm convinced of now, know that their companies cannot prosper in a world with runaway climate change. This is increasingly evident. They understand the need to work together with political leaders to address these challenges."

That's a stunning statement, one that environmentalists would love to believe. That is, until they slam head-on into other inconvenient facts, like The New York Times investigation over the weekend. That in-depth story revealed that leaders of the U.S. energy industry have bankrolled the campaigns of an array of Republican state attorneys general in the express hope of seeing undermined the Obama administration's stringent environmental regulations to curb greenhouse gas emissions.

If there are any oil, coal or gas honchos in Lima for the UN negotiations, they were not among the speakers at the landscape forum. But Polmon, who is gaining an international reputation as one of the world's greenest CEOs, was there. And for one morning, that was enough to reveal that some corporate leaders possess values that transcend quarterly returns and shareholder demands – both of which Polmon insisted need to be de-emphasized for – he actually said this — the greater good of society.

When it comes to climate change, Polmon is certainly out of synch with the oil baron Koch brothers in saying, "The cost of inaction is becoming greater than the cost of action."

By example, he added, "Natural disasters linked to changing climate already cost us (at Unilever) more than $300 million a year. We see increases in food costs, water scarcity, reduced productivity in many parts of the agricultural supply chain — all linked directly to climate change. Left unchecked, climate change has the potential to be a significant barrier to our gross, and that of nearly every other (business) sector."

For the record, Unilever – which owns Ben & Jerry's, Knorr, Lipton and Bertolli olive oil, not to mention Dove, Vasoline and VO5 – ranks No. 140 on the Fortune 500. It has revenue exceeding $66 billion and profits of $6.4 billion. For his part, this bleeding-heart CEO brought home $11 million in total compensation last year, with a healthy bonus for exceeding growth expectations.

But just because he's rich and successful doesn't mean he doesn't get it. Because Unilever sources raw materials from tropical regions around the world, it has come to understand that massive deforestation in Latin America, Africa and Asia is increasing carbon emissions, intensifying erratic weather and hurting his business – in both the short and long term.

"There is a strong business case for taking climate change out of the value chain," Polmon said. "It's one of the reasons why we're committed to sourcing 100 percent of our agricultural raw materials sustainably by the year 2020.

"To Unilever, sustainable agriculture sourcing includes eliminating deforestation from the entire supply chain. Our priority is therefore to preserve high conservation-value forests, forests with high carbon stocks, and tropical forests on peat surfaces. We are also implementing a responsible sourcing policy that we're driving up the value chain for our suppliers."

That's how the needle moves. When Walmart decides that energy-efficient lights are not a leftist plot to kill profits, but rather a long-term money saver, large-scale change comes. When Unilever decides that it will not source palm oil from Indonesian suppliers that are rapaciously deforesting, change comes there, too.

None of this is easy, Polman notes. The world is moving toward a population of 9 billion people. Food output will need to increase by 80 percent to meet future demands. But large and small farms can do far more to increase yields on the same amount of land, while restoring land back to forests that have been destroyed, he said.

To speed things along, food industry giants such as Minnesota-based Cargill and Singapore-based Wilmar are also getting on board. Both are among the 170 governments and companies that pledged at a UN climate summit in September to halve the rate of deforestation from the production of commodities like palm oil, soy, paper and beef products no later than 2020, and eliminating deforestation by 2030 as part of the New York Declaration on Forests.

"Deforestation is not just one of the great challenges in the fight against climate change," Polmon said. "It is the most important, immediate and urgent challenge, in my opinion. We are not yet acting at either the speed or scale that the problem demands. But we can win this battle."


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Environment and Climate Change

Environment and Climate Change

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