So Copenhagen resulted in no great climate change breakthroughs, and the carbon emissions cap-and-trade bill favored by the Obama administration has given way to the realization that jobs are Job One. If you think that means sustainability has also been taken off the table at manufacturing companies, think again.
Companies are increasingly embedding sustainability initiatives in their plans as they seek both to save money on rising energy costs and to find ways to profit from green technologies and products.
"If you consider sustainability broadly, inclusive of not just climate change but issues related to energy, materials, recycling, waste, the use of water, companies are extremely focused on that," says Peter Capozucca, sustainability strategy leader at Deloitte. "They are not viewing it necessarily as a standalone sustainability initiative but more as linked with issues and strategic priorities they are dealing with anyway, whether on the cost or revenue side of the equation."
That's certainly the case at Dow Chemical. Neil Hawkins, Dow's vice president of sustainability, cites global issues such as renewable energy, clean drinking water and the rising consumerism that goes along with an expanding middle class in emerging markets, as the sustainability drivers in the world. They also, he says, are drivers of growth for business. He cites some examples of how Dow is addressing these issues with innovative products:
- Airstone epoxy systems for windmill blade manufacturers are designed to reduce fabrication cycle times and improve the quality of wind blades.
- Betafoam acoustical and structural foams, according to Dow, save weight in automobiles and improve their stiffness and crash performance. Dow says the foams have saved up to 36 pounds per vehicle.
- Powerhouse solar shingles incorporate thin-film photovoltaic cells into roofing shingles.
Dow is also pursuing the growing electric vehicle battery market through its Dow Kokam joint venture. The company is building a plant in Midland, Mich., that will employ nearly 800 people and produce enough lithium-ion batteries to power 60,000 fully electric or hybrid-electric vehicles. Dow estimates the market for these batteries could grow to $25 billion by 2015.
Dow is also continuing efforts to reduce its energy use. Last year, Dow CEO Andrew Liveris noted that Dow uses the equivalent of 850,000 barrels of oil every day. Over the last 15 years, Hawkins notes, the company has reduced its energy intensity by 20%. By spending $2 billion on energy efficiency, he adds, the company has saved $9 billion. As part of its 2015 sustainability goals, Dow has committed to reduce its energy intensity by 25%.
Asked about the role of company leadership in sustainability, Deloitte's Capozucca says he has yet to see a successful sustainability effort that is bottom-up in nature. "Consistently, this is a CEO issue but in many cases it starts with the board of directors and what they are trying to do from a broader governance standpoint," he notes. He says a consistent theme is that sustainability must be integrated into all the company's strategic plans, including growth, innovation, cost and efficiency and how the company engages with its stakeholders.
Dow's Hawkins agrees with the need to establish sustainability as part of the company's culture and develop strong organizational alignment with corporate goals and the roles of individual employees. He says companies also benefit from strong sustainability goal-setting and reporting processes. "They tend to be leaders because they will put forth bold ideas, align their organizations to get it done and hold themselves accountable across long periods of time," he says.See Also: • Grainger CEO Sees "Intense Focus" on Productivity• China's Great Transition