In addition to having a devasting effect on lives and livelihoods, COVID-19 has been the biggest global disruptor in recent memory. It also has pushed us to a new moment of corporate leadership.

"This is where the moral leaders [will] separate themselves from the greenwashers," Paul Polman, global sustainability leader and former Unilever CEO, said in a GreenBiz 21 keynote conversation about what leadership means today.

The scale and scope of the climate change, biodiversity loss and inequality challenges facing corporate leaders is extensive.

"[We] need leaders who know that by investing in others, they will be better off themselves. But that takes courage," said Polman, who in 2019 created Imagine, a foundation aimed at eradicating poverty and inequality and stemming runaway climate change.

It is now much cheaper to design right and invest in that.

In the coming years, the speed and skill with which progress is made on these issues will be critical. With that in mind, Imagine is trying to help corporate leaders be more courageous.

It does this by bringing together 20-25 percent of the CEOs from the same sector to drive system changes, Polman said.

For example, in the food sector, Imagine is working with 30 companies on a project that involves looking at regenerative agriculture, setting up a common data bank and creating a joint labeling system.

"Because they are together, they become more courageous, and because [you] have critical mass, governments want to work with you. [Also], civil society comes in, and you [can] form partnerships that lead to breakthroughs," he explained. 

Spend back better

Governments already have spent $12 trillion to $13 trillion just to stabilize global economies ravaged by COVID-19. Many of these same governments are devising ways to reconstruct global economies by spending back better, addressing climate change and inequality along the way.

During the last economic crisis, an opportunity to green the economy was missed. Only 3-5 percent of the money that governments spent went toward greening the economy, and in the years that followed, climate change worsened and inequality grew.

"We don’t want to repeat that. It led us to this current crisis … It is now much cheaper to design right and invest in that," Polman said. "People are starting to realize that the cost of inaction is now significantly higher than the cost of action."

Uneven COVID-19 vaccine distribution between developed and developing countries is a case in point.

In addition to directly affecting lives and livelihoods, a new report commissioned by the International Chamber of Commerce Research Foundation found that if governments fail to ensure access to COVID-19 vaccines in developing countries, the global economy stands to lose about $8 trillion to $9 trillion. As much as half of this bill will fall to advanced economies, and economies and sectors with a high degree of international exposure will bear the brunt of these economic losses, the study said.

Another shot

The COVID-19 vaccine itself offers a lesson about the impressive speed with which humanity can deliver change. "We invented a vaccine within one year. We put communities together that rallied and filled in where others fell short," Polman said. This, when combined with the coming of age of ESG investing, offers hope, but caution is essential.

"Now there is a bit of euphoria, and we need to watch for it," Polman said, underscoring that many issues are far from solved. Only about 10 percent of companies have climate commitments that are approaching seriousness, and nature loss needs to stop by 2030, he pointed out.

To stay below a 1.5 degrees Celsius temperature increase, continued development and progress on science-based targets is needed. The objectives for science-based targets for climate risk and for nature are closely related, but more granularity is needed and work still needs to be done, particularly on science-based targets for nature.

Against this backdrop, Imagine, Conservation International and the Global Environment Fund are working with 65 fashion companies — representing about 30-35 percent of the fashion industry — to design a set of industry-specific science-based targets for nature. "I think that we will be able to do that very quickly for other industries too," he added.

The simple truth

Ultimately, corporate leadership has to change because "less worse" is not an option anymore, Polman said. To be successful today, leaders need to be "systematic" thinkers. The work required to attack climate change and inequality is difficult, and these issues need to be solved at different levels and in ways that the current system was not set up to deliver.

In light of this, today's and tomorrow’s corporate leaders need to be purpose-driven, able to work in partnerships and equipped to think intergenerationally, Polman said. They also need to lead with a high degree of humanity and humility, he said. 

A new crop of moral leaders who understand that the role of business goes beyond shareholder primacy is already emerging, he added.

Now there is a bit of euphoria, and we need to watch for it.

In the face of these transformational changes, corporate boards need to keep pace. They need to adapt, become more diverse and gain greater competency on climate risk issues, Polman said.

Until recently, MBA programs were not producing the multi-disciplinary leaders needed to meet today’s challenges. Instead, programs were offering up "Milton Friedman on steroids," he quipped.

Last year was a wake-up call, but the real black swan revealed itself to be the lack of global cooperation. "And you can’t solve many of these global problems that we have [without global cooperation]. That is needed to redesign our economic system," Polman said.