4 Mega-Trends that are Shifting Dow's Sustainability Strategy

Cradle to Cradle

4 Mega-Trends that are Shifting Dow's Sustainability Strategy

A company's true commitment to sustainability requires not only reducing the negative impacts from its operations, but more importantly, changing its products and services to be more sustainable and help address environmental and social challenges.

Dow Chemical Co. has had a long commitment to sustainability -- which I've been fortunate to see in action through Dow's engagement with my organization, the Boston College Center for Corporate Citizenship. But when I heard Rose Perkins' recent presentation during my Green Innovation class at the Carroll School of Management, it became clear just how much Dow has changed its strategies and product portfolio in the last few years.

Perkins is an Associate Director of Sustainability at Dow and she recently visited Boston College as a guest speaker and to meet with Net Impact students. She explained that, while Dow Chemical still manufactures plastics and chemicals that find their way into many important aspects of our lives, it has also begun addressing several emerging "mega-trends" and sustainability challenges through these changes.

Leveraging its Sustainability External Advisory Council, using life-cycle assessments (LCA) and stakeholder input, Dow Chemical has identified four mega trends that have become the center of its market-driven strategy:

• Health and nutrition
• Energy
• Consumers
• Transportation and infrastructure

One-third of Dow Chemical's 2010 sales came from products introduced just over the past five years, Perkins said. Today, the company sells to the home and personal care segment, the electronics and food industries, among many others.

Customers are a key driver behind Dow's product shift. As Perkins noted: "In addition to Dow’s innovation engine bringing new technologies to the marketplace, customer expectations for more sustainable solutions continue to grow."

Perkins also gave a few examples of some of Dow's strategically positioned products, including:

• STYROFOAM SIS Brand Structural Insulated Sheathing, a first-of-its-kind residential wall system that combines shear bracing, insulation and water-resistive barrier protection in one product;
• METHOCEL, a cellulose-derived gluten replacement for food and medicine;
• ECOSURF, a line of biodegradable surfactants that have been certified under the Design for Environment and CleanGredients standards;
• ECOLIBRIUM, bio-based plasticizers used in wire insulation and jacketing;
• and formaldehyde-absorbing paint sold in Asian markets.

The company is also working on the Dow POWERHOUSE Solar Shingle, next generation lithium-ion battery technology for hybrid and electric vehicles, carbon capture and algae-based CO2-to-ethanol technology.

Shifting to sustainable products is not always a smooth process. There has to be a business case for the new green products but judging market demand can be challenging.

A few years ago, based on growing stakeholder concerns, Dow Electronic Materials chose to stop formulating all new products with perfluorooctanesulfonic acid (PFOS) even though it received regulatory exemptions for use in the electronics industry. It developed and began offering PFOS-free alternatives but has not seen a total market conversion to date.

Sustainability issues today cannot be solved by a single company. Increasingly, industry peers and competitors join efforts to solve emerging problems. In June 2010 Dow Chemical and its main competitor, BASF, received the EPA's Presidential Green Chemistry Challenge Award for their collaboration in developing a greener process for making propylene oxide, a key chemical intermediary in a variety of manufacturing processes.

Dow Chemical's engagement with NGOs has also changed over the years, and today involves building long-term partnerships with credible organizations to bring the critical business perspective into solving environmental and social problems.

In January 2011 the company announced a five-year collaboration with The Nature Conservancy and committed $10 million to examine "how Dow's operations rely on and affect nature" in order to advance "the incorporation of the value of nature into business."

Green innovation in energy and manufacturing is increasingly seen as a win-win-win strategy -- helping protect the environment, create jobs and improve business competitiveness on the global market. Recently President Obama added Dow CEO Andrew Liveris as a co-chair of the president's Advanced Manufacturing Partnership, working on policy and domestic job creation as top issues.

After hearing Perkins' take on Dow's role in green products, green jobs, and green manufacturing, I'd love to hear your thoughts as well: Do you think there is a real opportunity for the U.S. to create green manufacturing jobs? What are the main barriers and how can we overcome these to support American companies' incredible potential to innovate and bring breakthrough technologies to market?

Photo CC-licensed by zhouxuan12345678.