Le Monde: When Business Turns Ethical

At Danone’s AGM in June 2020, its CEO and chairman Emmanuel Faber told shareholders they had effectively taken Milton Friedman off his pedestal after voting almost unanimously in favour of the French consumer goods giant becoming ‘a purpose-driven company’ — a new category created under France’s 2019 Action Plan for Business Growth and Transformation (PACTE) law. This vote was a first for a French listed company and a snub to the late Friedman, neoliberal employers’ favourite economist. Henceforth, Danone’s purpose wouldn’t just be to make a profit, but also, more altruistically, to ‘improve health’ and to ‘preserve the planet and renew its resources’.

Faber, a boss celebrated by the business press for his unconventional attitudes, said Danone was gearing up to ‘reinvent the model of the living company, an economy that serves people’. but just months after the landmark vote it announced its largest ever redundancy programme: 2,000 job losses, 400-500 of them in France. The company was still largely in the black and the pandemic barely dented its turnover, but Danone’s share price had fallen, and it was being outperformed by competitors Nestlé and Unilever. ‘It’s painful,’ but ‘protecting profitability and earnings is fundamental for a company,’ Faber told France Inter in November 2020, four months before he himself was let go.

Since 2018 Larry Fink, the boss of BlackRock, the world’s largest investment management corporation, has also been calling for business with a purpose and, more broadly, ‘working for the common good’, in his annual letters to all the companies in which it has shares.