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By choosing to raise his family amid the mosquitoes and migratory birds of the wetlands of the Camargue on the coast of southern France, rather than among Basel’s corporate dynasties, Luc Hoffmann, heir to pharmaceutical group Roche, inadvertently drew a line between the interests of business and nature.
On one side stood the world-renowned nature conservation centres and foundations he established and funded with his fortune in the second half of the 20th century. On the other sprawled the Roche empire, built on the success of best-selling drugs such as Valium, and run for growth and profit, largely by professional managers.
In The New Nature of Business, Luc’s son André, now vice-chair of Roche, and co-author Peter Vanham lay out how to bring these parallel tracks together. “The business of business isn’t just business,” they write. “The business of business is to at least preserve and where possible expand the world’s human, social, environmental and financial capital.”
The book makes the familiar case that maximising short-term profit leads to long-term destruction of value. But it also suggests that a “narrow focus on [reducing] carbon emissions” could have dangerous unintended consequences. Those four “capitals” depend on one another, write Hoffmann and Vanham. They call for nothing less than a systemic change to a “sustainable, inclusive form of capitalism, with new principles, and new practices”.
The most interesting parts of the book describe Hoffmann’s path to the realisation in the early 2000s that the profitmaking power of business should be harnessed in the quest for sustainability. When the 20-something Hoffmann started to pay attention to Roche in the late 1970s, managers regarded the controlling family as “lucky mushrooms” — Glückspilze — lacking in business savvy and easily ignored.
Roche, founded in the 1890s by Hoffmann’s great-grandfather Fritz Hoffmann-La Roche, had already left plenty of scars on the natural world. It had soiled its own backyard by dumping chemical waste over decades in a pit next to the Rhine, near Roche’s headquarters. One of the worst environmental disasters of the 20th century occurred at Seveso in Italy in 1976, when a plant owned by a Roche subsidiary accidentally spewed highly toxic dioxin over the town. The group’s ethical compass had also gone awry, culminating in a vitamin price-fixing scandal during the 1990s and multi-million-dollar fines.
When rival Novartis proposed a merger in the early 2000s, it shook the “mushrooms” out of their wealthy torpor. The next generation of the family rallied to keep Roche independent, 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 at other organisations. They include the unlikely greening of listed Swiss cement maker Holcim and the integration of sustainability into the Insead business school curriculum (thanks in part to Hoffmann’s funding of a new Global Institute for Business and Society).
Some of the exposition of sundry sustainability efforts is overdetailed, while the book’s abbreviation-laden chapter on how to measure and therefore manage nature-related corporate disclosures, while important, will test the casual reader. Hoffmann’s ideals also now face challenge from the pushback against “woke” capitalism, which recently forced Jochen Zeitz, lauded here for the “reinvention” of Harley-Davidson, to roll back some of his efforts to make the US motorcycle company more inclusive.
But although Hoffmann acknowledges “the irony of a billionaire writing about equity and sustainability”, the story of how he redirected his wealth and privilege powers the book’s message about the potential of business, properly stewarded and conducted, to create lasting change. As Hoffmann writes: “It is not how you spend your money that matters, but how you make 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 the FT’s senior business writer
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