Interview: Andrew Winston on the many reasons for hope

4th April 2024

One of the world’s most influential management thinkers, Andrew Winston sees many reasons for hope as pessimism looms large in sustainability. Huw Morris reports

Andrew Winston had a case of “really bad timing” that set him on the path to becoming one of the world’s top sustainable business thinkers. He had joined a three weeks before the industry crashed in 2000. A few months later, the company went bust while he was on honeymoon. “I turned to my newly betrothed and said, that for richer and poorer vow we took, how do you feel about poorer?”

While searching for regular business jobs, Winston discovered the then embryonic concept of sustainability, read everything about it, and studied for a master’s degree in environmental management. One of the first people to go to Yale University to study the subject with an MBA already under his belt, he wrote Green to Gold, a book about the environmental challenges facing business and society, with professor Daniel C Esty.

Give and take

This put him on the path to meeting Paul Polman, the former Unilever chief executive and global sustainability pioneer. Together they wrote the seminal book Net Positive. Its subtitle – how courageous companies thrive by giving more than they take – sums up Net Positive’s message. Winston and Polman debunk the economist Milton Friedman’s theory that the sole purpose of business is to generate shareholder value. This may have lifted one billion people out of poverty, but at huge cost to equality and the planet. Their working title was Milton Friedman is Dead.

“It’s not the most subtle statement, because Friedman said the business of business is shareholder value, but there were some caveats, such as a company living by the rules,” Winston says. “If he was around today, he might not be far off our view because the rules and the context have changed. The expectations of businesses from stakeholders are part of value creation – that’s one of our main principles.

“The core brand behind this modern neoliberal view is that the purpose of business is just maximising profits. Back then, they believed that would maximise wellbeing on some level, and one of its key policy pathways is ‘trickle down’ – that if we just get out of the way of rich people, the world would be better off.

“It’s failed in every place it’s been tried. It’s fundamentally flawed and doesn’t recognise how systemic and connected everything is.

“We know better now. We know about climate change and that inequality has got drastically worse, in large part because of that philosophy. Part of our job is to tear it down as a core principle because we are undermining our existence.”

Younger business executives are not convinced by Friedman, Winston says. But the fallout is everywhere. “Part of why there is so much volatility in the world is that Friedman’s story is dying, and it’s causing disruption. It’s an uncertain time for businesses and economies.”

Positive growth

So, what does a net-positive business look like? Winston and Polman argue it is a company that improves the wellbeing of everybody it touches throughout its value chains.

Companies will profit and grow by solving the world’s problems, not by adding or contributing to them.

“Is the world better off because your business is in it? If you can answer that as fundamentally ‘yes’, you are close to a net-positive business. There is no company that is net positive yet. The system is not in place. You can’t plug into a grid that is all renewables yet. It’s a path and the level of ambition we need now.”

He acknowledges that the list of companies that “get net positive at a deep level” is short. They are mostly privately held or owned by one person and “don’t have to worry as much about stockholder pressure, which gives them some freedom”. Some big public companies
“are doing pieces of it really well”. Nevertheless, carbon emissions are rising.

“We’re still losing. The leading companies must do more than getting incrementally better. They need to lead the charge and make up for the laggards by demonstrating a better way.

“Pursuing a more aggressive net-positive path is better as those companies are going to thrive in the future. We’re going to need to go fast, and the pressure is rising, driven by physics and increasing stakeholder demands.”

Nevertheless, there are some grounds for hope. Winston notes how technology companies are “just killing it on renewables” by helping build the industry and moving into carbon sequestration. The aluminium, steel and cement sectors are also working on scaling up low-carbon technologies.

“They are pushing the boundaries and doing things that are not economic yet. The knock on sustainability has always been that it costs more but, in reality, companies do things that save money.

“Cool stuff is going on in big problem areas, and that should give us some hope that there is real work at scale now.”

However, he does not think optimism or pessimism is “the right word for where I am at the moment”. He acknowledges that the reality of climate change on the ground is tough.

“It’s hard not to be pessimistic in the short run about extreme weather and the damage that is happening and coming. But on the optimistic front, we are moving towards a clean economy pretty quickly and we’ll manage carbon emissions over time.”

Changing the conversation

Winston is most pessimistic about misinformation and the consequences for democracy, particularly in a year heralding a bitter US presidential election battle. Artificial intelligence has been used to create videos of Joe Biden “saying things he never said”, Winston warns. The Financial Times used the technology to fabricate an image of the president kissing his rival, Donald Trump.

“There is so much wrong with the conversation right now,” Winston says. “The misinformation around policy, politics and climate is vast and making it much harder for us to act.”

However, with momentum growing behind how businesses handle environmental, social and governance (ESG) issues, as well as tougher regulation on financial disclosure, “there is no going back”, he says, pointing to the EU’s Corporate Sustainability Reporting Directive and similar legislation in California.

Much of Winston’s work focuses on mega-trends. Companies’ transparency and generational change are two examples. “Young people expect more transparency as they are on their devices all the time, but the regulatory pressure on companies to report, particularly on emissions, is growing and real.

“Companies are building the machinery to have enough people and resources to focus on this reporting. If you want something to be taken seriously – if it gets measured it gets managed – you need some kind of consistency.

“It’s anarchy right now; there are lots of ESG ratings firms asking different questions, but we are moving toward harmonisation. I remind people that the three main financial sheets we learn in business school – the balance sheet, the income statement, the cash flow – took centuries to lock in and are still in flux, with constant debates about what is cash and what does ‘good will’ mean. There are debates about definitions all the time.”

Patience is a virtue

Companies must therefore be patient, he argues. While some elements of sustainability are hard to measure, the estimates will improve over time.

“There are plenty of estimates in financial disclosure. It will get better, there will be more consistency and I have more hope that will work out than investors figuring out what they should be asking about ESG as they are not really clear how that all ties to a company as an investment.

“Sometimes anarchy is a good thing. It keeps things moving. Somehow, I think it will shake out.”

Andrew Winston’s career at a glance

Andrew Winston’s early career included advising companies on corporate strategy while at Boston Consulting Group and management positions in strategy and marketing at Time Warner and Viacom/MTV. He has a BA in economics from Princeton, an MBA from Columbia, and a master’s degree in environmental management from Yale.

He is ranked third on the Thinkers50 list of the top management thinkers in the world. His books on strategy and sustainability – including Green to Gold, The Big Pivot and Net Positive – have sold more than a quarter of a million copies in 15 languages.

Net Positive suggests four critical paths businesses can take to thrive today and win in the future.

• Serve stakeholders, then shareholders

• Take full ownership of all company impacts

• Embrace deep partnerships, even with critics

• Tackle systemic challenges by rethinking advocacy and the relationship with governments.


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