"Putting the environment first doesn't thwart business opportunities, it creates them." That's DuPont's Charles O. Holliday Jr., chairman and CEO, discussing his commitment to sustainability, what he labels as global industry's biggest challenge . . . and opportunity. In October, he launched his latest broadening of the company's sustainability commitments, and DuPont is now expanding business offerings that will address biotechnology, safety, environment, energy and climate challenges in the global marketplace. The company expects to derive additional revenues of $6 billion or more by 2015 from the targeted effort.
Remember DuPont, the chemistry- and materials-oriented company? Last year Holliday helped complete its transition into DuPont, a 21st century science company focused on sustainable growth. Holliday defines the mission as "increasing shareholder and societal value while decreasing our environmental footprint along the value chain. While chemistry remains vital to our businesses, the addition of biology has opened tremendous new opportunities. We have turned our world-leading research capability to inventing what our customers tell us they need to grow their businesses."
Holliday says the challenge encompasses more than DuPont and its customers. He says today's global imperative for sustainability and economic growth is challenging industry, governments, non-government organizations, academia and the science community to work together in unique and creative ways.
Holliday recognizes that solutions addressing the issues of energy, climate, water and safety will largely result from partnerships that deliver new approaches and science-based innovations. "We also know that focusing solely on our own environmental footprint does not go far enough. Our actions must be both market-driven and consistent with societal values and expectations." (See "Global Climate Change -- DuPont's Recommendations.")
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In Holliday's sustainability crusade, the major challenge is not in creating a commitment to the environment, but in his strategy of synergistically maximizing the necessary economic and technological innovation to best serve all corporate constituents. For example, DuPont's environmental consciousness is decades old. Nearly 20 years have passed since it first published its environmental goals and made the commitment publicly available. Now as part of a corporate sustainability commitment, environmental benefits will accelerate. In 2003, the U.S. Environmental Protection Agency presented DuPont with its annual Presidential Green Chemistry Award for the company's research leading to the development of its first bio-based product, Bio-PDO, which is the corn-based raw material in its Sorona polymer. Applications include carpeting and apparel.
Environmental progress has continued to be central to how DuPont regards its global responsibilities.
Consider greenhouse gas emissions. Holliday believes that science is sufficient to compel prudent action to address global climate changes. "That is why we began taking action more than 10 years ago and have reduced our global greenhouse gas emissions by 72% versus 1990 levels." (During that time production volume increased 33%.) By 2015 Holliday says DuPont will further reduce greenhouse gases at least 15% from the base year of 2004.
DuPont is formally broadening its sustainability commitments beyond internal footprint reduction to include market-driven targets for revenue and research and development investment. DuPont has also reset its footprint goals, which largely have been achieved ahead of its 2010 deadline.
|"We have turned our world-leading research capability to inventing what our customers tell us they need to grow their business." Charles O. Holliday Jr.|
"Our top priority is to create value for [all] our shareholders. We will do that by delivering sustainable solutions through science and innovation. Many companies say that what's good for the environment can also be good for business. We have a slightly different view: What's good for business must also be good for the environment and for people everywhere in the world."
Holliday says sustainable growth is not a distant goal for the 2015 target date announced in October -- it's about products and services that are in the marketplace right now and products that are moving through the R&D pipeline. "While we have made progress, we can -- and will -- do more, working closely with our customers and partners around the world. We recognize that we don't have all the answers and need to partner with others to deliver the best solutions, when and where they are needed most."
DuPont's 2015 sustainability goals span all of its operations. The goals are tied directly to business growth, specifically to the development of safer and environmentally improved new products for DuPont's key global markets. These include transportation, building and construction, agriculture and food, and communications. Holliday says that revenue from the company's current safety and environmental offerings are increasing at double the company's average annual revenue growth rate.
2015 Marketplace Goals
Holliday's environmental commitment is implicit in the marketplace goals set for 2015:
- By 2015 DuPont will double its investment in R&D programs with direct, quantifiable environmental benefits for its customers and consumers along its value chain.
- By 2015 DuPont will grow its annual revenue by at least $2 billion from products that create energy efficiencies and/or significantly reduce greenhouse gas emissions for its customers. DuPont estimates these products will contribute at least 40 million tons of additional carbon dioxide equivalent reductions by its customers and consumers.
- Double annual revenue to $8 billion from nondepletable resources.
- DuPont will enhance its focus on protecting people. The company will increase the amount of R&D spent on developing and bringing to market new products that will protect people from harm or threats. Between now and 2015, DuPont will introduce at least 1,000 new products or services that help make people safer.
DuPont also has updated its environmental footprint goals, which largely have been achieved ahead of schedule. "Footprint reduction remains a priority for DuPont. When a company has been making thousands of different products for more than two centuries, there are bound to be legacy issues," says Holliday. "We have them. We accept that society expects transparency and responsiveness to such issues, and we are committed to both in order to earn and keep the public's trust."
(Read more about DuPont's environmental footprint goals at "Global Climate Change -- DuPont's Recommendations".)
Biotechnology is an important aspect of Holliday's forward sustainability strategy, and results are becoming more visible in terms of corporate revenue as R&D investments produce more customer solutions. Across the corporation, the bio-based approach already accounts for 17% of revenue, says Holliday. Approximately 10% of the company's $1.4 billion R&D budget is focused on biotechnology.
Holliday stresses that biotechnology at DuPont is not some vague 'feel-good' philosophy. "We're using biotechnology to enhance the quality of customer solutions." He notes that sustainability, to succeed, needs to deliver superior results to all its constituents.
DuPont is directing its industrial biomaterial technology to enable the creation of high-performance products that are sourced from renewable, farm-grown feedstocks rather than petroleum. The strategy is to reduce a dependence on a depletable feedstock while producing a superior product from renewable resources that reduces the company's environmental footprint.
In May 2004, DuPont and U.K.-based Tate & Lyle formed a joint venture, DuPont Tate & Lyle BioProducts, to build one of the world's largest biomaterials processing plants in Loudon, Tenn. At full capacity the plant will produce 100 million pounds of Bio-PDO annually to replace petroleum feedstocks used in Sorona, the latest polymer from DuPont. Bio-based Sorona will be available in 2007. DuPont says apparel made with Sorona offer a unique combination of attributes including exceptional softness, comfort, stretch and recovery, and easy care. Additional benefits: resistance to fading from chlorine, ultraviolet rays, wrinkling and repeated washing. By mid-2007, Mohawk Industries plans to have bio-based Sorona in carpeting.
DuPont's leadership in biotechnology also includes a commitment to making biofuels more competitive with petroleum. Holliday asserts that "DuPont firmly believes that biology will help us reduce our global reliance on fossil fuels."
Leveraging both its Pioneer Hi-bred subsidiary (a seed-corn specialist) and a BP partnership, Holliday has set three goals:
- Improve existing ethanol production through differentiated agriculture seed products and crop protection chemicals;
- Develop and supply new technology to allow conversion of cellulose to biofuel and;
- Develop and supply next generation biofuels with improved performance.
DuPont has high hopes for biofuels. At the June BP partnering announcement it estimated that while biofuels today account for less than 2% of global transportation fuel consumption, up to 30% share was possible. One key to that potential: the introduction of biobutanol by the DuPont/BP team. As an ethanol alternative, biobutanol's low vapor pressure and tolerance of water contamination facilitates its use in existing gasoline supply and distribution channels. DuPont also describes a potential to be blended into gasoline at higher concentrations than existing biofuels without the need to retrofit vehicles. Fuel economy is also said to be better than gasoline/ethanol blends.