The Plan B
Jochen Zeitz
“Business as usual is leading to the long-term collapse of our planet”
according to Jochen Zeitz, who spent many years as the CEO
of Puma and has now become a pioneer of a sustainable
economic order alongside Sir Richard Branson.
Their think tank, “The B Team”, is advocating a profound change
in mentality to bring about a paradigm shift with the
aim of making sustainable business a key factor in our global economic
order—from Plan A to Plan B.
The B Team is a not-for-profit initiative formed by a global group of business leaders to catalyse a better way of doing business, for the wellbeing of people and the planet. Founded in the belief that the private sector can, and must, redefine both its responsibilities and its own terms of success, the team is developing a “Plan B”—for concerted, positive action that will ensure business becomes a driving force for social, environmental and economic benefit. Plan A—where business has been motivated primarily by profit—is no longer an option. The team’s members are focused on driving action to meet a set of challenges that underpin Plan B—by starting “at home” in their own companies, taking collective action to scale systemic solutions and using their voice where they can make a difference. Jochen Zeitz is Co-Founder and Executive Chair of The B Team.
For almost two decades, 54-year-old Jochen Zeitz’s public role was that of superstar of the German managers’ scene. In 1993, at the age of 30, he became the youngest German CEO of a listed company. Within six months, he had returned the loss-making sports equipment company Puma to the black. He increased its stock market value by up to five thousand percent. The Financial Times voted him Strategist of the Year for three years in succession. In 2008, he unveiled PUMAVision as his corporate mission statement and began to implement a long-term sustainability programme. In 2012, the group was hailed as a global leader by rating agency Vigeo Eiris. In the same year, Zeitz left his post as CEO—not to retire to his 200-square-kilometre Kenyan eco-resort of Segera, but to lobby globally for a fundamental economic revolution.
In the book The Manager and the Monk: A Discourse on Prayer, Profit and Principles, which he published with Benedictine monk Anselm Grün, he criticised expectations that economies and companies should continue generating higher growth quarter after quarter, year after year, even though the planet was not growing and resources were dwindling. He made a passionate plea for a new eco-capitalism, responsible entrepreneurship and consumption in moderation. The book has been translated into 15 languages. In 2012, he joined forces with Sir Richard Branson to found The B Team, a think tank of a worldwide cooperation of CEOs and managers addressing the same subject. His second book, The Breakthrough Challenge continues his examination of the topic. Today Zeitz calls into question the tenets still being preached by the global economy in many quarters: Growth! More consumption! “No, I haven’t made a U-turn”, he affirms. “It’s been a process of grow-ing awareness.” We are talking to him in Cape Town, where he has just opened the continent’s largest museum of contemporary African art, the Zeitz MOCAA, for which he is making his extensive collection available–and where he has just become a father for the second time.
Silke Bender
Let’s start small. How sustain-able is your lifestyle, Mr Zeitz?
Jochen Zeitz
Well, I try to be as eco-friendly as possible in eating, travelling and buying clothes, and I promote renewable sources of energy wherever I can.
Silke Bender
Some time ago you said you don’t use paper napkins …
Jochen Zeitz
Yes, that’s right. I think even linen napkins are totally unnecessary. You wipe your mouth on them once and then throw them in the washing-machine or in the rubbish. What a waste of resources!
Silke Bender
So what do you do if you spill your food?
Jochen Zeitz
It doesn’t happen very often.
Silke Bender
What kind of shoes are you wearing today?
Jochen Zeitz
Not Puma trainers for once. These are Bottega Veneta shoes, produced in Europe.
Silke Bender
You have four homes around the globe—in Kenya, New Mexico, Richmond in England, and occasionally in Los Angeles, where your partner Kate Garwood works as a film producer. Do you ever stop to work out your ecological footprint?
Jochen Zeitz
Yes, I do, and it’s around 100 tonnes of carbon dioxide. But I never fly aimlessly around the world—I combine every trip I take with business activities. In a globalised world, getting on a plane for work is simply vital. There aren’t enough alternatives yet, other than demanding that airlines invest in a greener future. So wherever possible, I try to work using video conferences instead of travelling. Of course flying has a negative impact on my environmental footprint, but it’s more than compensated for by my extensive commitments in The B Team, my work on several environmental foundations and my climate-positive Segera Retreat in Kenya, which protects 200 square kilometres of natural landscape. So overall, I’m actually leaving a positive footprint.
Silke Bender
What other methods of travel do you use?
Jochen Zeitz
In cities, I travel by bus, underground and Uber.
Silke Bender
In 2008, you started to transform Puma into a more sustainable company. What triggered this?
Jochen Zeitz
It all started with my first visits to our suppliers in Asia in the early 1990s, where the environmental conditions were still really bad. When I saw with my own two eyes how all the chemicals were pumped into the rivers in a completely untreated state—the way it had been in Germany in the 1970s—I knew we had to do something. The top 1,000 companies in the world cause sixty percent of its negative ecological footprint, so business has the choice of remaining the main part of the problem or becoming part of the solution. Nowadays we have workable solutions to hand, not only in the form of wind and solar energy, but also as a result of other environmental innovations in lots of other areas. They just have to be implemented globally, quickly and consistently.
Silke Bender
What made you establish The B Team with Richard Branson?
Jochen Zeitz
We met at a leadership conference in South Africa, and I’d already supported his foundation, Virgin Unite, so we got talking and found that we shared the same visions. The B Team was our plan for a larger-scale way of addressing the issues we’d both already started to tackle independently of each other. Plan A of the economic order—which stands for social inequality, corruption, climate change, unemployment and the destruction of nature—has had its day. Business as usual is leading to the long-term collapse of our planet, so we simply have to implement Plan B. Companies should no longer go all-out for profit, but must incorporate environmental and social aspects into their actions.
We’re also giving our input on issues related to migration, which is currently a major topic in Germany in particular. Our biggest success so far is that we were very active during the UN Climate Change Conference in Paris in 2015—and for the first time, the countries were able to agree on a new global climate treaty. Some heads of state described our contribution as an economic policy-maker as very important.
Silke Bender
Donald Trump has just announced the withdrawal of the US from the treaty. Is this a setback?
Jochen Zeitz
If the US doesn’t want to participate, this will only unite the rest of the world all the more. Not even Trump will be able to stop it now that all the other countries have set the ball rolling. The largest cities and companies in America have long since signed up to implementing climate targets. I hope the official exit of the USA will spur the rest of the world on to do even more.
Silke Bender
For many companies, profits and shareholder value still take priority over soft assets such as sustainability. What has to happen to change this?
Jochen Zeitz
Sustainability is no longer a soft asset! It’s definitely a hard asset, as we can see by the mounting natural disasters as a result of climate change and the growing social divide. Companies that fail to consider people and the environment in their actions will lose out over the medium to long term. Having said that, I’m a realistic optimist; this change in thinking started long ago, but much too slowly, and unfortunately is not yet widespread enough.
Silke Bender
Are there any examples and evidence of how to do business successfully using The B Team’s guiding principle, the Triple Bottom Line—an accounting framework based on the three pillars of Profit, Planet and People?
Jochen Zeitz
How many would you like to hear? Kering, for example, where I spent many years on the supervisory board as the sustainability officer, is committed to The B Team’s objectives and has just been rated the most sustainable company in the luxury-goods industry for the third time in a row by the Dow Jones Sustainability Index. And then there’s Wilderness Safaris, an eco-tourism operator, and Harley Davidson, where I’m also on the supervisory board. They’re all successful companies that have quantified their negative environmental impact and are striving hard to reduce it over the long term. More and more of these companies are also posting Environmental Profit & Loss (EP&L) statements in their balance sheets with complete transparency.
Silke Bender
Could you explain this in more detail, please?
Jochen Zeitz
The EP&L calculates the ecological footprint of a company and its entire value chain. Negative environmental impacts, such as air pollution, land usage, carbon emissions, water consumption and waste, can thereby be expressed in euros or any other currency. Raw materials from third parties, for example, also have an ecological footprint—and they have a positive or negative impact on the EP&L of the company that works with them. It’s all about creating a picture of overall responsibility.
Silke Bender
A total of 24 major companies have already signed up to The B Team, ranging from the CEOs of Dow Chemical, Kering and Unilever through to the Virgin Group. But with so much global economic firepower, why is there still no tangible, sustainable economic order? What’s the problem?
Jochen Zeitz
The global economy as a whole is currently undergoing a period of transition, away from the post-industrial era towards a new structure which features different methods of production and trade. Consequently, when it comes to transformation, we have to think in terms of thirty years rather than five. The way we do business, consume, travel and eat has already changed dramatically over the last thirty years—and the pace of change will increase more and more in the future, because the technical possibilities for a greener future are now truly available to us. Governments must create the legal framework for this, working together with business and society.
Silke Bender
How does this fit together with the quarterly report, to which most stock corporations are committed?
Jochen Zeitz
A focus on short-term profits doesn’t fit with a sustainable approach. The B Team is also working to change this practice. For example, Unilever and Kering have already stopped announcing their quarterly results. This three-month mindset and the resultant stock market rollercoaster it triggers are complete nonsense! Warren Buffett realised this a long time ago. That extreme volatility has never really made anyone rich, apart from the speculators and collectors of commission. A better option in every respect is investing in companies that plan and think along long-term lines, be they Tesla, which has 100,000 electric cars and a higher market capitalisation than General Motors, or Apple, which is aiming to convert to a green company.
Silke Bender
Apple was subject to criticism for a long time because of its use of toxic substances in production and the bad working conditions in its Chinese supplier firms …
Jochen Zeitz
That’s true. But there’s now been a huge rethink. If you take a look at the current sustainability report, you can see that Tim Cook has initiated dramatic change. It won’t happen overnight, but all Apple headquarters in the USA, for example, now use renewable energy sources. Anyone reading this year’s Environmental Responsibility Report will see how much everything has changed since Steve Jobs died. You always need someone who forges ahead and then takes the whole industry with them.
Silke Bender
There’s a feeling that powerful global corporations are dictating to national governments when it comes to asserting their interests. What can be done to stop national laws being circumvented by ingenious companies?
Jochen Zeitz
In 2015, we finally managed to achieve an International Climate Change Agreement—well, with the exception of the USA. Of course, a globally operating economy has to have a global framework in place; but here too, I believe that business doesn’t have to wait around for politics. It should take responsibility instead, push ahead and become part of the solution.
Silke Bender
National tax laws alone preclude this …
Jochen Zeitz
We haven’t made anywhere near enough progress in this area. At The B Team, we’re lobbying for CO2 emissions to be taxed worldwide. Innovative tax laws could make a key contribution, but at present this is still unrealistic. Individual countries can, however, promote more environmentally friendly behaviour through tax breaks. You only have to think of the scrappage programme in Germany in 2009. Customs duties in international trade would be another option.
Silke Bender
If a company wanted to restructure to introduce more sustainability, what would be the first steps?
Jochen Zeitz
Firstly, it should measure the size of its ecological footprint and its social impact. Drawing up an ecological profit and loss statement is the first step. If companies don’t want to do that, they can look at the full length of their value chain and pinpoint the biggest critical impacts.The next question is: what steps need to be taken to reduce these impacts? What innovations could be introduced that would resonate with clients and consumers and give the company a positive boost? Then develop a workable plan, step by step. The focus here is particularly on small-scale new start-ups, as they can make the right decisions from the outset.
Silke Bender
Isn’t it the case that gradual transformation into a greener company will automatically reduce profits initially unless prices are raised at the same time?
Jochen Zeitz
Well, you have to view it as an investment, just like investing in research, development or marketing without seeing the profits immediately. Overall, a company that takes a holistic approach is more competitive over the long term. Consumers and customers have become more critical and will penalise firms who refuse to do this in the long run. Just look at the low-cost furniture company, Ikea. They’ve used long-term investment to organise their supply chains and their timber consumption in a more sustainable way. Despite this, they haven’t become more expensive. The stock market values innovations too, not just profits—like Tesla, for example.
Silke Bender
Sustainability has long been a popular marketing instrument that everyone would like to commit to, but how can we consumers spot the phony green companies?
Jochen Zeitz
Greenwashing is certainly a problem, and here it’s a question of using your common sense and actively seeking out information. Almost every company publishes its sustainability reports. I’d never buy anything from anyone that didn’t. You should really make the effort when important purchasing decisions are on the cards, such as buying a car or a house. I can decide whether to choose an electric or hybrid vehicle instead of a petrol-driven model, and what forms of energy and smart technologies I use at home. Sure, not everyone can afford sustainable consumption across the board, but everyone can at least make a contribution. Especially when it comes to food. Of course a factory-farmed chicken is cheaper than a free-range chicken. But if consumers stopped buying those EUR 1.99 chickens and chose free-range chickens instead, but perhaps less often, production would adapt and the prices of free-range chickens would drop in the medium term. The same goes for T-shirts. Do I really need twenty T-shirts at EUR 3.99 each, or would it be enough to have two that have been produced under fair conditions, are higher quality and will last longer?
Silke Bender
How does the newly opened Zeitz MOCAA Museum in Cape fit with your sustainability initiatives?
Jochen Zeitz
My love for nature and the African continent was awakened on my first safari there in 1989. I operate my nature reserve in Kenya according to the 4 Cs: Conservation, Community, Culture, Commerce. One C is culture. Art has a transformative power that can change minds. It was important for me to give African artists a platform on the continent itself where they can express their ideas on twenty-first century topics. For me, it’s come full circle.
Silke Bender
What would you personally still like to experience?
Jochen Zeitz
I’d like all companies and countries around the world to join together in fighting climate change. No petrol-powered cars on the streets any more in 30 years’ time at the latest. I’m not a fan of migrating to Mars. I think our planet Earth is very beautiful, and we should keep it that way.
Silke Bender
Don’t you sometimes itch to bring off another company turnaround on a grand scale and make it successful and green? To prove that your theories really work?
Jochen Zeitz
I’m involved in so many companies and enterprises that working on just one would be a backward step for me.
Thank you for talking to us,
Mr Zeitz.