 "Neil Hawkins, CSO, Dow Chemical")
Climate change has become a major concern for countries across the globe as the environment catastrophe manifests itself in the form of drought, cyclones, floods, etc in different parts of the world. While governments are busy framing rules & policies to limit the damage to environment, industries are also adopting strategies which can lead to more sustainable development. Chemicals, used across the industries, can pave the way for developing new eco-friendly products which can be manufactured using less resources and, thus, result in carbon footprint reduction.
Chemistry is key to solving the sustainable development goal riddles, echoes Neil Hawkins, Chief Sustainability Officer (CSO) of the US-based Dow Chemical Company. Hawkins, a global leader in sustainable business practices and EH&S (environment, health & safety) management, was the Dow executive leading the development of the recently announced 2025 Sustainability Goals, which have the potential to redefine the role of business in sustainable development.
In this interview with Rakesh Rao, Neil Hawkins discusses issues concerning sustainable development, and the importance of the chemical industry is solving some of the challenges facing the world today.
What is the importance of sustainability for the industry, in general, and Dow, in particular?
Sustainable development as a concept started in 1987 when the United Nations (UN) brought about the Brundtland Commission report, which stated that globally the planet was on an unsustainable path and there was a heavy deterioration of the human environment and natural resources. The commission urged countries to work and pursue sustainable development together.
In early 1990s, Dow started following this path as we wanted to play a constructive part in resolving challenges of sustainable development for the planet. As a result of this, we released our first set of 10 year goals in 1995 which focussed on reduction of our ‘Footprint’ - improve our environment, health and safety performance.
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From 2005 through 2015, we set the bar even higher with the introduction of a more ambitious, next-generation set of goals which focussed on our ‘Hand-print’. These goals largely focused on our products, product safety and maximising the value of our products. These also dealt with footprint reduction.
In 2015, we announced the third set of goals which we call - Blueprint. These address the large picture of sustainable development. These challenge Dow to be a constructive partner in helping bring chemistry, public policy innovation, and value chain innovation to solve pointed sustainability challenges.
We have mapped our sustainability goals to UN Sustainability Development Goals (SDGs) and believe that if we achieve our goals, we will make a significant contribution and proceed on a path for sustainable development of the planet.
How can chemical industry help solve the sustainability challenge of the world? What is the role of India in it?
The whole chemical industry has a key role to play because chemistry is the critical tool box for enabling more sustainable products. People can complain about the existing products. But the reality is that to get to more sustainable growth, it is going take chemical companies to invest and commercialise new sustainable products. Some of the challenges also present an opportunity for the chemical industry.
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Global sustainable development would not be possible, unless India also plays a part in bringing in this change. The economy of India will grow, and rightfully so to uplift the people of India, but that is real opportunity because it can grow in a more sustainable way than what has happened in the other parts of the world. You are in different stage of development and, hence, you can leapfrog to best technology from sustainability point of view. This present an opportunity for India, but also to the chemical industry.
From your experience, would you state that sustainability and profitability go hand in hand?
Absolutely! There is no doubt in my mind that sustainability and profitability feed in to one another. In our first set of sustainability goals (the footprint), Dow accumulated a profit of $ 5 billion against investment of $ 1 billion. This was largely on energy efficiency and it continues even today. Money is saved when you become more energy efficient, more water efficient and reduce waste. These investments are one time but they keep adding to the bottom-line, year after year. You are more profitable, when you are more efficient.
Along with this, the most exciting part is the top-line growth, which entails creating new products, and solving bigger challenges for our customers with healthier margins. Globally, 30 percent of sales come from new more sustainable products every 5 years.
Are investors more conscious about sustainability now than a decade or two ago?
Yes. There’s plenty of evidence that investors are moving towards evaluating sustainability trends and drivers, both as threats and opportunities. There are efforts known as SASB (Sustainability Accounting Standards Board) and IIRC (International Integrated Reporting Council). These are two unique systems of disclosure for sustainability that aim to standardise reporting for the investors.
After COP 21, the banks are undertaking programs looking at carbon (footprint) for companies. So already there is a higher emphasis on sustainability, than say 10 years ago, and it will be much standardised in times to come.
How important is role of innovation in sustainable development for the Indian chemical industry, which is fragmented. What advice would you like to give to the Indian Government that is driving the Make-in-India campaign?
There are two different kinds of chemical industry we are talking about - there is the existing industry and future industry. When I think of India, I think of a place of extraordinary innovation. As people and country, India is very good at finding ways to nurture the innovation. There are many entrepreneurs, and start-ups launching at the university level. Even the existing industry is playing its part. Often smaller firms have the ideas and the innovation, but their ability to scale up is limited. Marrying the two together gives the best of both – you get innovation and ideas and then you get the scale up.
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The government can aid the industry by focussing on policies that support innovation, commercialisation and good dialogue on how the industry is managed and regulated. India can benefit from the learnings of the other countries such as Europe, the US, etc.
Is it better to have voluntary regulation than have government regulated policies?
In the field of chemical industry, voluntary regulation often does not work in isolation. I believe you need minimum regulation to bring all players to a level playing field. You will always have players that have outstanding performance as well as those that are not doing enough. No amount of voluntary policing will take care of that. There needs to be minimum protection for public health which can be achieved by regulation.
However, I do not think that every single thing needs to be regulated. You have to be clear about your objectives and let the companies work with you. There is a lot that the leading companies can offer in terms of best practices and bringing the industry to a common ground.
Is the concept of circular economy gaining importance in developing markets like India and China?
The concept of circular economy is as important to developing countries as it is to the developed ones. There is a strong recognition that the reuse of material is good for the economy because waste materials are recollected and not dumped. The developing world is not behind when it comes to the circular economy; in many ways it is the same or even better as you can see the value of reusing the material.
In the US, we do not have such good collection systems as compared to India. The manual separation system works very well for recycle and reuse. The US is lagging when it comes to this opportunity as each city and town have different approaches.
Some of the European countries like Switzerland are well ahead of the curve. They already have very stringent norms for separation – the consumers have to separate at the time of disposal or they are fined.
Climate change is manifesting itself in many ways. Do you think this will prompt companies to move closer to sustainability in various countries?
We just got finished with COP21 in Paris and we saw that almost every country in the world is committed towards climate change. The key for COP 21 has been that every country had to take a decision on what it could do and what it should do. Over the next five years, we will see countries implementing those commitments.
Just to take an example, China says it will have a cap and trade system implemented across the country. Now, something like this has huge implications not just for the country but also for producers across the world, because everyone is virtually involved in the Chinese economy.
India is very important to the sustainability equation. The country is still growing and the government has to look at the human development index along with industrialisation. Bringing that balance will be key for the next few years.
India is approaching this through renewable energy, which is admirable. If it allows India leapfrog to solar and wind, and not build as many coal-fired plants or other plants, it will be making a big contribution towards global sustainability.
What’s the outlook of the chemical industry when it comes sustainable development?
I am optimistic for the chemical industry (global as well as Indian), but I am most optimistic for Dow.
Public policy is important, but we need to have to have solutions to replace what’s not working. I think to achieve the SDG goals of the United Nations, chemistry and the chemical industry have a huge role to play in developing modern & productive agriculture, resilient food packaging, sustainable infrastructure, transitioning mobility to lower carbon footprint, etc. Chemistry is key to solving the SDG riddles.
