28 January 2009 15:30 [Source: ICB]
The need for an environmentally benign industry is opening doors for new chemical leaders who can make going green a way to stay in the black
THE CHEMICAL industry's corporate climate is changing fast, and is warming toward new managerial positions that can lift a company's bottom line and keep it competitive - in a sustainable and environmentally friendly way.
Regulatory and standards compliance is not enough any more for a chemical company to survive. Some of the traditional environment, health and safety (EHS) officers have now evolved into sustainability chiefs, vice presidents and directors to help their companies profit from selling green and being green, according to US-based recruitment firm Heidrick & Struggles. The firm released its white paper, The Emergence of the Chief Sustainability Officer, in March 2008.
"Demand for a new kind of EHS officer has risen dramatically," reported Heidrick & Struggles.
"The days are gone when the chief EHS leader worried only about audit and compliance, and interacted only with permit writers, safety inspectors, and low-level compliance staff at regulatory agencies. A new breed of EHS leader now works directly with other top corporate leaders, frames EHS issues in strategic terms, and operates in the far broader context of environmental and social sustainability," the firm said.
Some companies take a different route, retaining the traditional role of an EHS leader and at the same time creating the role of a chief sustainability officer, or CSO, says Roger Thorne, managing partner of Hudson Gain, a US-based leadership solutions firm that provides talent acquisition and development services.
Hudson Gain in October released a study on the role of CSO in corporations.
"CSO is a leadership role that looks at a triple bottom line - people, profit and planet," says Thorne. "A company having a sustainability function that looks well beyond the near-term costs, savings and efficiencies will continue to have competitive advantage."
NEW KIDS ON THE BLOCK
There is currently a limited talent pool of experienced sustainability executives, according to Hudson Gain. Many CEOs are said to be passing on the sustainability responsibilities to an existing employee whose main credentials are a genuine interest in sustainability and a strong reputation in the company.
The chemical industry, however, is a different animal when it comes to looking for CSOs. Aside from the required tree hugger and company-conscience roles, sustainability leaders of chemical companies need to be technically and financially savvy, understand how the industry operates from top to bottom, and be a long-term strategic thinker.
David Kepler, who was appointed Dow Chemical's first CSO two years ago, says his role is to strategically work toward creating business opportunity in solving world challenges and making a sustainable impact upon the world. Kepler is also the US-based company's chief information officer, and an executive vice president.
Kepler is charged with leading the company's commitment to set the standard for sustainability, including achieving Dow's 2015 sustainability goals.
"I'm working on ways to integrate sustainability into all aspects of the company including business strategy, research, product development, marketing, tracking performance and reporting progress," says Kepler. "Sustainability is an integrating force for business success so it stands to reason that enhancing a strategic focus on sustainability will be beneficial."
Last year in July, Louisiana, US-based specialty chemical company Albemarle promoted David Clary to the newly created position of vice president and CSO.
Part of his role, says Clary, combines the activities of Albemarle's technology and consumer advocacy functions. A background in technology and business is said to be a requirement.
"This was probably how I was picked because most of my career has been in R&D and business management," says Clary.
"A lot of my tasks involve incorporating these sustainability issues into our product development and research to accelerate the creation and commercialization of socially and environmentally sound products."
He adds: "The pace of both economic and regulatory change is accelerating, as well as our understanding of climate concern. If a company wants to get ahead of that, they're going to have to start thinking about it more systematically rather than just reacting to regulations."
In May of last year, Germany-based chemical company BASF created its first and unique position of Climate Protection Officer (CPO), appointing Ulrich von Deessen. Von Deessen was previously head of research for BASF's fine chemical and biocatalyst business.
BASF was the first company worldwide to establish this position, says Von Deessen.
"Climate protection affects virtually all of BASF's business processes: whether we are purchasing raw materials, producing chemicals, carrying out research into new products and processes, or whether our customers are using our products," he says.
"All of this has an impact on how much greenhouse gases are emitted in relation to our business activities or what emissions we or our customers manage to save," he adds.
Aside from being the information hub and coordinator for climate protection within BASF, von Deessen is also the head of the company's EHS competence center.
"I am responsible for a large number of issues related directly or indirectly to climate protection and so the positions complement each other," he says. Von Deessen adds that he reports directly to the board of directors and prepares decisions for it on the issue of climate protection.
Other newly appointed CSOs in the chemical industry included William Frerking, who was chosen in November 2007 for the newly created position in US-based paper and chemical company Georgia-Pacific, and Linda Fisher, who joined US-based chemical giant DuPont as its CSO in June 2004.
A SUSTAINABLE POSITION
DuPont, however, started integrating sustainability strategies in its business management processes even way back in the 1990s, says Dawn Rittenhouse, DuPont's director of sustainable development. She started assisting in this strategy in late 1997, and in 2007, also picked up responsibility for DuPont's efforts on climate change.
"Sustainability management can [help] the leadership to look across the issues/opportunities and provide the direction to what to focus on and how to move the agenda ahead," says Rittenhouse. "They also need to be considering aspects on the social side which would mean human rights, labor, possibly ethics, supply chain, which might not be in the purview of EHS officers.
Still, companies such as US-based chemical firm Dow Corning saw an expanded role for EHS instead. The company added Peter Cartwright as its EHS executive director in December 2005.
Cartwright says he sees his role as a helpful "community policeman" and "improvement coach." His key responsibilities include strategy development and execution in ensuring Dow Corning's world-class EHS and product stewardship capabilities, as well as leading the company's global commitment to sustainability.
"At present, we don't require someone with more sustainable authority making decisions, and prefer the model that our business leaders include sustainability in their decisions using EHS as a place of expertise and help," says Cartwright.
His role, he adds, was formed to build on the company's good record in EHS in the light of setting very challenging internal targets on energy, waste and safety against the background of a rapidly expanding regulatory landscape.
"Having an EHS executive allows effective and efficient oversight for the standard yet essential ongoing activities, while providing someone who can articulate the key priorities for corporate support from all our businesses," Cartwright notes.
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