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By choosing to raise his family among the mosquitoes and migratory birds of the Camargue wetlands on the coast of southern France, rather than among the corporate dynasties of Basel, Luc Hoffmann, heir to the Roche pharmaceutical group, inadvertently drew a line between the interests of companies and nature.
On one side were world-renowned nature conservation centers and foundations that he created and financed with his fortune in the second half of the 20th century. On the other was the Roche empire, built on the success of best-selling drugs like Valium, and run for growth and profit, largely by professional managers.
In The new nature of businessAndré, Luc’s son, current vice president of Roche, and co-author Peter Vanham, explain how to unite these parallel paths. “The business of business is not just a business,” they write. “The mission of business is to at least preserve and, where possible, expand the human, social, environmental and financial capital of the world.”
The book makes the well-known argument that maximizing short-term profits leads to long-term value destruction. But it also suggests that a “narrow focus on [reducing] “carbon emissions” could have dangerous unintended consequences. These four “capitals” depend on each other, write Hoffmann and Vanham. They call for nothing less than a systemic change towards a “sustainable and inclusive form of capitalism, with new principles and new practices.”
The most interesting parts of the book describe Hoffmann’s journey to realizing in the early 2000s that the profit-making power of business needed to be harnessed in the pursuit of sustainability. When the twenty-something Hoffmann first started paying attention to Roche in the late 1970s, management regarded the controlling family as “lucky mushrooms”: Glückspilze – lacking business savvy and easily ignored.
Roche, founded in the 1890s by Hoffmann’s great-grandfather Fritz Hoffmann-La Roche, had already left many scars on the natural world. He had fouled his own backyard by dumping chemical waste for decades into a pit along the Rhine near Roche’s headquarters. One of the worst environmental disasters of the 20th century occurred in Seveso, Italy, in 1976, when a plant owned by a subsidiary of Roche accidentally released highly toxic dioxins over the city. The group’s ethical compass had also failed, culminating in a vitamin price-fixing scandal during the 1990s and multimillion-dollar fines.
When rival Novartis proposed a merger in the early 2000s, it brought the “mushrooms” out of their moneyed slumber. The next generation of the family came together to maintain Roche’s independence, establish a new relationship with management and focus on purpose and profitability.
The authors expand on Roche’s transformation with case studies of successful projects to create sustainable and inclusive prosperity in other organizations. They include the unlikely greening of Swiss cement company Holcim and the integration of sustainability into the economy. inside business school curriculum (thanks in part to Hoffmann’s funding of a new Global Institute for Business and Society).
Some of the discussion of various sustainability efforts is overly detailed, while the book’s abbreviation-laden chapter on measuring and therefore managing nature-related corporate disclosures, while important, will test to the casual reader. Hoffmann’s ideals now also face the challenge of the backlash against “woke” capitalism, which recently forced Jochen Zeitz, praised here for the “reinvention” of Harley-Davidson, to back some of his efforts to make the American motorcycle company more inclusive.
But while Hoffmann acknowledges “the irony of a billionaire writing about equity and sustainability,” the story of how he redirected his wealth and privilege enhances the book’s message about the potential of business, properly managed and led, to create lasting change. As Hoffmann writes: “What matters is not how you spend your money, but how you earn it.”
The new nature of business: the path to prosperity and sustainability by André Hoffmann and Peter Vanham Wiley £23.99/$29.95, 256 pages
Andrew Hill is senior business editor at the Financial Times.
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