Dow Chemical aims to 'redefine the role of business in society'

Most major companies have taken steps to improve their environmental profile, if only by becoming more efficient or cutting down on waste. Dow Chemical Co intends to go a lot further, declaring that it wants to change the very role of business in society.

The chemical manufacturing giant has set itself a sweeping series of sustainability goals, which it claims will not merely reduce its own impact but also drive environmentally responsible practices at other companies. The set of seven goals, announced last month, include “developing breakthrough innovations,” “valuing nature” and “engaging employees for impact”. All together, they aim to improve the lives of 1 billion and deliver $1bn in cost savings and new cash flow for the company.

“We’re really focusing on taking the science and technology of Dow and devoting our efforts to finding new ways of doing business that will help companies collectively change our role in society,” says Neil Hawkins, Dow’s corporate vice president and chief sustainability officer.

Andrew Winston, a sustainability consultant and author, calls the goals “really impressive”. “Dow joins a very small number of companies setting goals about the impacts of their products across the life cycle and setting society-level impact goals,” he says. “I think Dow has hit the mark very well on thinking big and aspirational while putting concrete markers of progress in place.”

Sheila Bonini, CEO of The Sustainability Consortium, called the plan “admirable”, while David Levine, co-founder and CEO of the American Sustainable Business Council, called the goals “encouraging”. “There’s a legacy of producing chemicals that are harmful to environment and people, so efforts to develop and implement sustainability plans that incorporate public and environmental health can be important steps down a sustainability path,” he says.

This is the third time the Michigan-based company has announced sustainability goals, to be met over a 10-year period. They’ve grown bolder with each go around, reflecting the rising expectations for companies that want to be seen as sustainability leaders.

Dow’s first set of goals, laid out in 1995, focused on reducing the company’s carbon footprint. A decade later, the company shifted the focus to its “handprint” by addressing social as well as environmental challenges. For example, Dow partnered with consumer goods company Unilever to create a high quality, affordable soap to improve personal hygiene in India and prevent the spread of infectious diseases.

Experts say setting and announcing sustainability goals holds companies accountable, and can spur dialogue and innovation.

“I believe this practice is even more important for companies in industries with questionable histories as it serves to put them in the public spotlight, make them answer some questions that they may not have previously asked, and ultimately can be a means through which to make them better,” said Robert Strand, executive director at the Center for Responsible Business at the University of California at Berkeley’s Haas School of Business, of which Dow is a corporate partner.

Dow’s image could use a boost. The company recently announced that it would be cutting its global workforce by nearly 3% – roughly 1,500 to 1,750 positions – as part of its move away from the chlorine business. And last week, Dow defended its CEO Andrew Liveris against allegations that he had used company funds to finance his lavish lifestyle.

The company also has a long way to go to overhaul its reputation as a polluter. “Companies like Dow have a lot of money to do this kind of PR, and they do it because it works,” said Rick Hind, legislatives director of Greenpeace’s toxics campaign. “But it doesn’t really address the lion’s share of contamination that they’re responsible for.”

Environmental activists at Greenpeace and others say Dow failed to take responsibility for one of the worst gas leaks in history, which killed thousands of people at a chemical plant owned by Union Carbide in Bhopal, India, in 1984. Dow, which took ownership of Union Carbide in 2001 and never owned the plant in question, has called attempts to involve it in subsequent criminal proceedings “highly inappropriate”.

Closer to home, Dow has admitted to contaminating the water near its corporate headquarters in Midland, Michigan, for nearly a century with dioxins, a group of highly toxic chemicals that can cause cancer and other illnesses, according to the World Health Organization.

On the other hand, Dow has been called a pioneer when it comes to valuing natural capital, or the benefits businesses get from nature. Working in a six-year partnership with The Nature Conservancy at factories in Texas and Brazil, Dow has found, among other things, that large scale reforestation can be a cost effective way to reduce air pollution from a chemical plant.

As for Dow’s new goals, they are just that – goals. Dow says it has yet to launch the specific initiatives tied to each one.

“We’re saying this is where we want to go,” Hawkins says. “Then we call upon the creativity and passion of our 50,000-plus employees [to put forward] collaborations they’d like to bring into the company to drive sustainable development.”

Of the latest goals, “advancing a circular economy” – reusing products instead of disposing of them – and “leading the blueprint” have the potential to really drive change, according to Hawkins.

While he couldn’t specify new projects, Hawkins pointed to the company’s existing wastewater recycling program at its plant in the Netherlands as an initiative that will help create a more circular economy. The factory, located in the small seaport town of Terneuzen, uses around 22m cubic meters of water each year. To reduce water stress, Dow recycles 30,000 cubic meters of household wastewater each day, purifying it to make steam and feed its manufacturing plants. The company claims the program reduces energy by 95%, equivalent to 60,000 tons per year of carbon dioxide emissions.

Dow will also look at ways to reuse its plastic waste, Hawkins says, and also plans to focus on ways to help make agriculture, technology and the electronics industry more sustainable.

The company’s 2014 Energy Bag Pilot Program, a three-month project that converted previously non-recycled plastics into energy, is one example of the kinds of innovation Dow hopes to replicate. Dow co-sponsored the program with the California city of Citrus Heights, among others. According to Dow, this was a first-of-its-kind pilot in the US, which revealed that plastic items like juice pouches and candy wrappers could be collected and recycled.

The company hopes to lead the way in developing new approaches to sustainability challenges by creating a “blueprint” with the help of governments, NGOs and the private sector, he says.

Dow has taken a risk in declaring such big, bold aspirations, especially given it hasn’t yet articulated how it will achieve them.

“I think by aligning business interests with societal interests, everybody will be trying to pull the boat in the same way, which I think minimizes risk for everyone,” Hawkins says.

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