Don’t just learn how to make money, make the world a better place — that was the challenge issued to SMU students by Mr Feike Sijbesma, the CEO of Royal DSM, a Dutch multinational that is active in the fields of health, nutrition and materials.
“What do you want to do with the education that you get here in this beautiful university?” he asked rhetorically. “What do you want to do after you graduate? What are you going to do with the companies you are going to work for? What do you want to do with your life?
“I hope that in university, you learn more than just making money,” he said in his talk on Enabling Financial Success With Sustainability As A Business Driver.
Speaking to students from the Lee Kong Chian School of Business as part of the SMU Visionary Series on October 10, 2019, Mr Sijbesma painted a dire picture of the problems facing the world today.
He noted that the billion richest people in the world — which would include the attending students after they graduate — consume half of the all resources in the world and produce almost half of all the waste. The other rest of the world, some seven or eight billion people consume the other half.
“If that sustainable? No way. We make it worse. We are destroying the climate and we hand over this planet which we borrowed our children. Which means we hand over problems to the next generation.”
The inequality leads to other issues, he noted. “Before we get the big problem with droughts, with flooding, with our food, with our supply chains of the oceans, before we get all of that, we get the big issue of migration.”
He also highlighted the problem of global hunger. He noted that almost a billion people go to bed hungry. “Of that billion, every day, 9,000 people die because of food shortages where they are.
“If there is an accident and 300 people are killed, it would be in all the newspapers. And rightly so. But 9,000 people killed because of hunger is not in any newspaper, for the ironical and cynical reason that it happened yesterday also, and will happen tomorrow. And since it happened yesterday and will happen again tomorrow, it is not news.”
Addressing this requires many players, such as international organisations and national governments. Businesses, however, also had an important part to play, he said. “If businesses have more influence, more power than 50 or 100 years ago, then I hope you have more responsibility also. You need to take those two together. It’s a very dangerous combination if you have a lot of power and a very low feeling of responsibility.
“So businesses need to step up. You need to learn that in university. You need to take the sustainability course. You need to learn not only how to make money or how to run a business, but how business can contribute to a better world.”
He noted that when he first became CEO of DSM 13 years ago, he told investors that making the world a better place was as important as making the company successful. He faced detractors who felt that the company could do good only after it made a lot of profit.
The company was criticised, it missed some quarters and missed some profit growth. However, the company changed its innovation profile and it developed products to help the world. “We make our money out of sustainability. And now 13 years later, we do three times better than the index. In our share price, we do three times better than competing companies in terms of value generation.”
Today, DSM helps 30 million people every single year via UNICEF and the World Food Programme, he said. It advocates on topics to make a difference on climate matters. It has also set up several food projects, one of which is working to make Africa self-sufficient.
“Twelve years from now, those two things (profitability and sustainability) have to, must, go hand-in-hand together,” he emphasised.
He argued that in future, if companies did not combine profitability with sustainability, they would fail to be attract employees and their products would be shunned in the market. “Your company will go down if you do not combine those two.”
He added that the idea of corporate social responsibility was insufficient because this meant that businesses separated their core activities from doing good. “If your core business does not have social responsibility, then you should go to jail. Business is embedded in society. With your core business, you should contribute to a better world.”
Mr Sijbesma gave examples of DSM’s efforts to combine the two. Among other things, it has developed an ingredient that, when mixed with feed, will help reduce methane emissions from cows. This is important because methane from cows is a significant contributor to climate change.
Other products include enzymes to reduces phosphates and nitrate in manure and a new coating that can be used on solar panels to increase the amount of light that passes through and thus boost power generation. DSM has also developed a carpet that is 100 percent recyclable and that uses 90 percent less energy.
At the end of the talk, Professor Gerard George, the Dean of the Lee Kong Chian School of Business, thanked Mr Sijbesma for his presentation.
“We have this SMU visionary series, really to have leaders who inspire us to build a better world,” said Professor George. “On that, clearly, Mr Sijbesma has done a wonderful, wonderful job, just to inspire us to think better, to think different. As we say in SMU, to have a meaningful impact.”
In the question and answer session that followed, Mr Sijbesma addressed questions about carbon pricing and about what it would take to solve world hunger.
One student said he was touched by Mr Sijbesma’s talk but noted that there are many different stakeholders. “How do you prioritise whose perspective is more important? How do you decide who to entertain and who to ignore?”
Mr Sijbesma admitted that this was a difficult question and one that he faces all the time. “Your question is almost daily at the table,” he said.
“The right answer is I need to listen to all stakeholders, to my customers, to my employees, to society at large, to my shareholders. Can I be disrespectful to any of those? I cannot.
“How to balance all that? In our leadership, it’s our daily job. It means trade-offs. You try to reconcile the dilemmas with solutions which might work for all. It does not always work and I try not to compromise but to think about clever solutions how to reconcile them. To be honest, it’s easier said than done.”
