Q & A

How does sustainability work at Dow Chemical?

The Dow Chemical Company provides raw materials for almost every industry, making the international giant part of the supply chain for countless products. The company's chief sustainability officer talks about its efforts to reduce its environmental impact.

Q: How is sustainability defined at Dow?

Dow is making sure our business strategy is integrated to address not only the financial but the environmental and social aspects of our activity, and the value we bring to each of those sectors.

Sales are assessed each year using a process which looks at not only the footprint from producing the product, but the positive and negative impacts it has throughout the value chain. We do that trying to maximize the positives and minimize the unintended consequences. 

Q: What was the process Dow went through to make sustainability part of the culture?

Our transformation has been to evolve sustainability from a concept about making products and having a societal right to operate, to actually integrating it into a business strategy. That involves aligning the company with key megatrends going on in the world that we think we can have an impact on, whether that's sustainable energy, improving water and transportation infrastructure, or addressing human health. Dow can play in those markets. Getting that mindset in our business strategy has been the key thing.

Our 1995 to 2005 goals were really based on defining our footprint and improving our operations around energy efficiency, emissions, and safety. That has been embedded in the company’s culture. It didn’t take too much effort for a very process- and metric-driven organization. We set company commitments and measure people by that. Our goals from 2005 to 2015 involve sustainability as value added. Integrating that into our business is more challenging. 

The company has key sustainability performance indicators that we expect every business to measure themselves against, the same way we do financial measurements. Fundamentally, we had to systematize it. We had to get to the point where the corporation doesn't just talk about it, we measure it. 

Then we had to bring in the enablement aspect of working it through the programs. And we've developed that in terms of our alignment on our R&D investments and structure. It’s a transformational program to get through. We have to build off of our past successes. 

Q: Considering the chemical industry as a whole, what role does the industry have in shaping what sustainability means around the world?

I think the chemical industry is a key player in this because more than 95% of everything manufactured has chemistry in the value chain, so we have a very good view of almost every industry. We're in agriculture, transportation, infrastructure, electronics, clothing, and housing. We’re in almost every aspect of human progress. 

Q: What has the industry done well to this point and where are the key challenges?

The chemical industry has done very well in being transparent in its operations and performance. We have been looking at new ways to reduce waste and manage our footprint. Transparency has been key to recognizing that the products have to be designed to more sustainable attributes. 

Q: You're both the CSO and the CIO for Dow. Can you explain the management and the strategic challenges that you face, balancing transparency and needing to protect proprietary information?

Some things are competitive in terms of what we patent, but our footprint and how we manage our plants and our relationships are becoming more transparent. The reality is that a business should be able to report environmental and community impact along with economic activity. We ought to be very transparent on the triple bottom line. We don't have to give away competitive information on how we develop products to be transparent about our output impact on those three dimensions. 

In fact, in many cases, as we go into new markets, we share that knowledge. It's capacity building. We want to participate in an industry that behaves with the same standards that we do. As we've gone into places like China, as an example, we helped their environmental agencies to develop programs with companies to understand that reducing waste is economically viable, even economically beneficial. We also share our best practices around chemical safety in a program with their Ministry of Environmental Protection and UNEP.

Q: How does Dow approach transparency around legacy issues with environmental problems?

The company is 113 years old. We've learned a lot in that time. Clearly, over the years, we have areas that we've tried to address. We try to be transparent on what our strategy and position are, and how we're working to resolution if they haven't been resolved. You can go to our website and look at them. They're posted along with the positive things we're doing. We don’t hide them. In many cases we sit down and talk to people about them because open dialogue is where you work through issues.

Q: There was a period of time when clashes between environmental groups and business led to opposing stances. How has the company’s culture changed over time with respect to environmental issues?

We're a science and technology company. We were the first company to have an industrial toxicology group. The chemical industry is energy intensive because it takes fundamental building blocks and applies energy to transform them into valuable products. So we've had a "war on wasted BTUs," wasted energy, since 1968. That became our lens on the issue for a time.

What we learned in the 1970s and 1980s is that we had to listen to others in order to establish a common view. This is one of the areas where Dow has grown. In 1992 we started a corporate advisory panel on the environment. We continue to have that today, with NGOs, people from academia, and ex-government officials from the EPA and other areas. 

Companies are announcing similar panels now, but we realized a long time ago that it was important for Dow to get input. We’ve learned to work in collaboration. We're not necessarily always going to have the same view as to how to solve a problem, but if we work together we can usually find some common ground that will let us continue to move forward. 

The USCAP program—the United States Climate Action Partnership—which includes several companies, including Dow, and key NGOs, is a good example of collaboration to shape policies that address energy and climate change issues.

Q: How does sustainability show up in operational processes?

For many decades Dow has had an approach that waste reduction always pays. We try to reuse every waste stream that comes from a plant. If you have wastewater from one plant, you can use it as an input into another plant. On our large sites, that's really the nature of Dow’s integration. A lot of our products generate hydrogen. In the old days, you'd see flares for that, because nobody saw a use for it. Now we take that hydrogen and bring it back into the plant as energy. In other words, we look at every waste product and figure out how to completely eliminate it, reuse it, or treat it to manage it effectively. The goal is always to keep a molecule in play by driving integration.

Q: How has research and thinking about green chemistry been implemented at Dow?

When the 12 Principles of Green Chemistry were published, Dow embraced them pretty early. We brought it into the company through a concept that today we call "sustainable chemistry," which uses the principles of green chemistry while also looking at a total life cycle and social dimensions. Obviously each product has to be cost-advantaged to produce and value-added to sell. We have taken all our products through a sustainable chemistry index, which includes some traditional attributes, in terms of the safety to manufacture and transport the product and efficiency of implementation. But it also looks at the value it adds to society. Are we deriving it from renewable resources? How does it compare to our other products? We then provide feedback to businesses on their opportunities. Which reinforces our focus on integrating sustainability into business strategy.