INSIGHT: Turning sustainability into profitable reality

19 November 2010 17:16  [Source: ICIS news]

By Nigel Davis

LONDON (ICIS)--“Sustainability is a business opportunity; you need to go out there and have the courage and the insights to exploit it,” said marketing expert Phil Allen at the close of a seminar held in Brussels this week, which looked at sustainability opportunities for chemical companies.

The chemicals sector probably has a key role to play in helping society come to terms with sustainable development. And it is encouraging to see that sector companies are looking in a refreshingly hard-nosed way at how they can match products to their own sustainability objectives, and those of others.

New products and business concepts are being developed, and sustainability has become vitally important in the innovation process.

Sustainability will be the driver for research in the chemicals industry, said Dow Corning vice president for science and technology in the specialty chemicals business, Thierry Materne, at the day-and-a-half-long Brussels event organised by SpecialChem and the European Chemical Marketing & Strategy Association (ECMSA).

“Sustainability is fully integrated into what we want to do as a corporation,” he added.

The concept, therefore, is not simply limited to a company’s own emissions, or its "environmental footprint", but to products, processes and management systems.

It can be more difficult for competitors to innovate, Materne said. “We are trying to expand our innovation concept way beyond [the] product.”

In a survey, Dow Corning found that its customers gave priority to reducing waste, to green products and to cutting carbon emissions.

These priorities help inform the decisions Dow Corning makes regarding innovation and product development: although in the world of additives it is not an easy task to establish whether sustainability as a concept is applicable across some 7,000 products. The company is a producer of silicones and silicone-based chemical intermediates.

In that respect, sustainability needs a “reality check”. Dow Corning  is not prepared to lose money on research and development, Materne said. Yet as his talk demonstrated: “You cannot just talk about sustainability. You have to differentiate yourself if you are to be successful.”

Differentiation is beginning to help better define the concept of sustainability in the chemicals industry.

For instance, looking at how some intermediates might help customers devise their own more sustainable products is opening up opportunities that probably weren’t recognised five years ago.

“Innovation is more of a competitive advantage than ever before,” Materne said.

But you don’t need to treat sustainability any differently from other business parameters. It has become part of companies' business processes toolkit.

DuPont, for instance, sees sustainability as a great business opportunity, its Europe, Middle East and Africa vice president for corporate marketing and sales, Luigi Robbiati, said.

The thrust of sustainability at DuPont has moved to encompass not simply its environmental footprint, but also its own and customers' products.

DuPont suggests "sustainability value" can be captured at three different levels: in reducing the DuPont environmental footprint; in developing its largely consultancy-based Sustainable Solutions businesses; and by capturing market-facing sustainability goals - in other words, embedding sustainability into business marketing strategies.

“Sustainability is a futuristic business opportunity,” Robbiati admitted, but as a market-driven company DuPont has sustainability as one of its core values.

DuPont has made significant progress towards its 2015 sustainability goals by reducing emissions and energy but is also generating good revenues from products that promote energy efficiency, those based on renewable resources and products or services that make people feel safer.

Sustainability is helping to provide some of the solutions that are likely to create significant new revenue streams.

Allen, who leads the consultancy MarketAbility, said sustainability is a major opportunity for the chemicals industry to take a lead and make a profit, while improving the wellbeing of everyone on the planet.

“It will be a journey demanding courage and commitment, requiring a change of mindset and business model, with new approaches to chemistry and new approaches to partnering in innovation,” he added.

To discuss issues facing the chemical industry go to ICIS connect

By: Nigel Davis
+44 20 8652 3214

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