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Going Green: How Sustainability Can Work for a Company

These days, the world, it seems, has been set on fire with talk of “sustainability.” While the term has been around since the late 1980s, the original definition is becoming obscured through its use in a variety of contexts. Basically, sustainability is not just about doing the right thing for the environment, but also about engaging responsibly with communities and assuring long-term economic success. “Sustainable” practices and products should, therefore, address all three needs, and can serve as the platform for dynamic business growth and innovation. This ExecBlueprint, authored by leaders in the chemical, power, and agricultural industries, defines sustainable practices for these industries and describes how companies can embrace them and become more profitable. While this will require some initial investment as well as support from company leaders, employees, and customers, these leaders all concur that sustainable actions ultimately make perfect business, social, and environmental sense for addressing tomorrow’s (and today’s) pressing challenges. This Blueprint was written by company leaders from The Dow Chemical Company, Princeton Power Systems, and HerbThyme Farms. Contents

1. Introduction: What is Sustainability... Really? -- by David E. Kepler of The Dow Chemical Company
2. What “Going Green” Means for Us -- by Darren Hammell of Princeton Power Systems, Inc.
3. Going Green: What It Means for Our Industry and Organization -- by Raju Boligala of HerbThyme Farms, Inc.
4. Conclusion: Ideas to Build Upon & Action Points
5. About the Authors

What is Sustainability... Really?

By David E. Kepler, SVP, Chief Sustainability Officer, Chief Information Officer, and Corporate Director, Shared Services, The Dow Chemical Company

Sustainable economic development and sustainability are not new ideas. They date from at least the late 1980s and the work of the U.N.’s World Commission on Environment and Development, more commonly known as the Brundtland Commission after its leader, the Norwegian doctor and diplomat, Gro Harlem Brundtland.
But while sustainability is an idea with a long history in global diplomatic circles, in the world of global business, it has too often been misinterpreted and confused with the idea of “corporate social responsibility,” and specifically environmental responsibility or “green” business practices.
Sustainability is not synonymous with environmentalism. Rather, sustainability lives at the intersection of three broad social and economic forces:

1. the need for wise and responsible use of resources (environmental)
2. the need for responsible engagement with societies and communities (social)
3. the importance of an economic model that can assure long-term progress (economic).

Together, these three ideas define the rules and parameters under which sustainable progress can happen. Products need to be measured across their lifecycle (from production and consumption through their end-of-life), balancing their impacts to the natural, social, and economic environments. If any one of these three conditions is unmet, the potential of that product to impact human progress will ultimately fade.
Sustainability must connect to the conscience of an organization, but just as importantly it needs to be seen as a platform for dynamic business growth and innovation. Sustainability must be an integral part of the engine of product development, business strategy, talent development, and capital investment. Frankly, the world is just beginning to tap the power of sustainability as a key driver for the identification and exploration of solutions to the world’s major challenges.
Our company, the Dow Chemical Company, is in the business of chemistry — a business that can connect, at a very basic level, world challenges with sustainable solutions. Conceptually, our business lives at the intersection of materials science and energy. Because virtually all industrial and consumer products today have embedded within them chemical reactions and compounds, we have a unique role in helping the world manage resources effectively and in a sustainable manner — and, as a result, a unique role in supporting individuals, communities, and economies address their development needs and opportunities and in a way that is both credible and sustainable.

Game-Changing Goals

To meet these commitments, any company that is serious about sustainability must adopt a culture of continuous improvement. In 1995, our company set important public goals for improving our environment, health, and safety performance. We have met or exceeded most of those goals, have come very close in others, and continue to strive to improve upon all of them. As a result, our workplaces are safer, our facilities are cleaner, our energy use is more efficient, and our corporate governance is stronger and more vigilant.
Indeed, we have become a recognized world leader in these areas and every Dow employee has, in some way, contributed toward that achievement.
In 2006, we set the bar even higher with the introduction of a more ambitious, next-generation set of goals. These 2015 Sustainability Goals focus our efforts beyond our own walls, committing Dow to stronger relationships within the communities where we operate, improved product stewardship, accelerated innovation to solve some of the world’s most pressing problems, and the reduction of our global footprint.
We have put ourselves on record as a company that will pioneer and contribute to new solutions for some of the most serious challenges faced by the most vulnerable members of the larger human family:

• Sustainable water supplies
• Sustainable and adequate food supplies
• Decent housing
• Personal health and safety

In developing these ambitious but, we believe, achievable objectives, we looked to the U.N. Millennium Development Goals for guidance. We selected goals that were both part of the U.N. mandate and consistent with the science and technology that we do best and the business opportunities that will drive our growth and profitability.

One of many examples of Dow’s applied sustainability strategy is a new pilot effort in Brazil to make polyethylene plastic from sugar cane. Polyethylene is one of the most widely used materials in consumer and industrial applications all over the world and is typically made from raw materials derived from natural gas — a feedstock whose supply and cost are unpredictable and which is, ultimately, unrenewable.
Via Dow’s new effort in Brazil, the same plastic will now be built from a renewable resource, whose availability and cost are predictable within limits. In Brazil, this makes perfect business, social, and environmental sense. It creates a lower environmental impact and, if we do it right, will bring jobs, growth, and a positive impact to the local economy. Finally, but not insignificantly, it creates growth and profit potential for Dow, our partners, and customers — assuring that the effort itself will continue. It is a textbook win-win-win if done right — an initiative driving truly sustainable value.

Adding Environmental, Social, and Business Value Through Sustainable Practices

While the sugar cane (see sidebar) is one specific regional example, Dow has also been successful at driving change across all of our global operations. Another important example of change that has added environmental, social, and business value for Dow has been our more efficient use of resources, especially energy. Through a global program with local implementation, we have changed manufacturing processes to increase energy efficiency, turning a $1 billion investment into over $4.5 billion in energy savings. As a result, Dow has also reduced its greenhouse gas emissions on an absolute basis more than required by the Kyoto Protocol.
Ultimately, we are a materials science company, and this is where we will continue to make the greatest impact. From discovering alternative ways to make solar panels more economical and widespread, to developing new materials that have helped the auto industry deliver more fuel-efficient vehicles, to finding new solutions for home energy efficiency or wind power generation, Dow sees new markets and business opportunities such as the direct integration of solar panels into roofing systems. In each case, the goal of sustainability is pointing our company in the direction of business opportunity, growth, and profitability.

Delivering Results

Dow’s sustainability commitments come with an expectation of economic return on investment. When we at Dow set our first sustain-ability goals, we projected that we would spend roughly $1 billion to fulfill them, and we expected a return on investment of roughly $2 to $3 billion. To date, our return on our investment has been in excess of $5 billion. The more we have focused our attention on sustain-ability, the better yield we have received. The fewer resources we have consumed, the better our economic performance.
We have challenged our people to configure solutions and drive value because it honors our commitments to communities and the environment, but perhaps more importantly because we believe this is the best way to optimize our performance. These interests not only can co-exist; we believe they are the best roadmap for the growth and performance of our company.
Indeed, today we are more confident than ever that Dow will be among the most prominent and influential global companies of the 21st century because we are committed to — and uniquely built for — addressing the global sustainable innovation and development challenges that live at the intersection of greatest need and most significant business opportunity.

2. What “Going Green” Means for Us -- by Darren Hammell of Princeton Power Systems, Inc.
3. Going Green: What It Means for Our Industry and Organization -- by Raju Boligala of HerbThyme Farms, Inc.
4. Conclusion: Ideas to Build Upon & Action Points
5. About the Authors

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