When it comes to making sustainable business a reality, the journey is just as important as the destination. Few companies prove this more than Dow — provider of many of the chemical, plastic and consumer solutions that the world needs to successfully transition to a low-carbon economy.
The companies leading the charge towards sustainable development generally fall into two buckets: The startups that exist specifically to solve an environmental or social challenge (think Tesla); and the legacy businesses using their heft to create a positive change.
The latest GlobeScan/SustainAbility Leaders Survey, which has been tracking expert opinions on corporate sustainability strategies since the mid-1990s, once again places Patagonia and Unilever top of the tree. The former was established with good intentions, with founder Yvon Chouinard keen to prove his passion for protecting nature and unwilling to compromise his commercial ambitions. The latter, Unilever, has been on a long journey to winning favor, thanks to its proactive sustainable growth strategy and high brand standards.
Interestingly, the top of the 2021 ranking is dominated by companies with a long history — from Natura &Co, IKEA and Walmart to Nestlé, Interface and Brazilian paper company Suzano.
“In a signal that the hallmarks of leadership have shifted, sustainable business models and strategy is the strongest driver of recognized leadership, overtaking target-setting and articulating sustainability values or purpose,” the report says.
Clearly, when it comes to making sustainable business a reality, the journey is just as important as the destination.
Few companies prove this more than Dow — a 125-year-old materials science business that has a key role in providing many of the chemical, plastic and consumer solutions that the world needs to successfully transition to a low-carbon economy. Today, Dow — among the three largest materials science producers globally — has a strategic plan to deliver innovative and sustainable solutions for its customers in packaging, infrastructure, mobility and consumer care. Sustainability is at the heart of its drive to be the “most innovative, customer-centric, inclusive and sustainable materials science company in the world.”
But it wasn’t always this way.
The company’s corporate director of sustainability, Eunice Heath, is well placed to tell the story of a business she has been a part of for the last 31 years. An industrial engineering major from the University of Florida, Heath kick-started her Dow career in technical sales and marketing as an intern. A wide variety of business development positions later — taking her from North America to Switzerland and back again — and she became part of the corporate sustainability team. That was eight years ago.
“Back then, sustainability was this group off to the side, doing its thing — leading the charge and sometimes pulling teeth, and trying to pull everyone along,” Heath tells Sustainable Brands™.
That’s no longer the case, she says. “I’m proud to say that, today, we have sustainability directors in every one of our businesses. If we had not started out on sustainability some 25 years ago, we would be a very different Dow today. We would be the Dow that still focuses on commodity chemicals, rather than the Dow that develops materials for the future.”
Although sustainability wasn’t a ‘thing’ back when Heath was learning the ropes in sales and marketing, energy efficiency was very much a focus for the business, as was water stewardship and reducing waste — all the things that hit the bottom line. Reminiscing, she says the key difference now is the relationship Dow has with its customers. Today, Dow’s approach to sustainability is driven by external insights and its partnerships with clients up and down the value chain.
“When we develop our packaging technologies, for example, there is a high intimacy level with regards to understanding our customers’ drivers,” she says. As a result, the performance of Dow’s materials and what customers are looking for from a sustainability perspective are “light years from where we were when I first joined the company.”
The likes of Proctor & Gamble, Unilever, Henkel, L'Oréal and Reckitt Benckiser — Dow’s core customer base — are all being challenged by their consumers to go further in addressing issues such as ethical materials sourcing or reducing the amount of chemicals that go into products, without compromising performance. “We listen to the market, and we partner with our customers,” Heath says.
And when Heath says ‘we,’ she is referring to the collective marketing, technical service and sales organizations “on the front line” — finding out what is changing in the market, understanding the likely performance requirements that will be needed in future years and what’s happening from a regulatory perspective.
“Sustainability is a team sport,” Heath says. Getting a market signal to develop a new product or solution is all well and good, but if the manufacturing process isn't capable or ready to deliver change, there are stumbling blocks.
“When I think about the decarbonization strategy we’ve laid out, it requires every aspect of our business working together. Take plastics recycling as an example. To ensure we have new technologies that are recycle-ready, we need to handle the complexity of plastics, have the infrastructure built, and create circularity in our manufacturing process. We have to be ready for that — and it doesn’t happen overnight.”
Listening, adapting and being proactive are key contributors to making sustainability happen within a business. But how does that come about? Is it a corporate culture that must be created? Is it about employing the right people? Heath puts Dow’s success down to having both a top-down and a bottom-up approach to sustainability. Its Board of Directors and senior execs are “steeped in understanding the megatrends” that will require new solutions — solutions that Dow could deliver.
At the other end of the talent pipeline, Dow has created “communities of practice” – internal groups that educate and build the skills of employees on various topics – life cycle assessment and circular economy as examples. At Dow sites, leaders engage with local community heads to understand the needs of the communities in which the firm operates. This gives the business a clear picture as to the changing skills and education of the people it will employ and areas to partner in the community. “It boils down to people. It boils down to accountability, too,” Heath says. “Connecting with our stakeholders and our stockholders and understanding what’s on their mind, so that we’re tackling what’s material — that’s the key.”
Making sure Dow has the talent ready to address future world challenges is what keeps Heath up at night. As we march toward 10 billion people on this planet — all of whom will require more food, water, energy, resources — “we need to have the talent ready to tackle these sustainability challenges, starting the moment they first walk in the door or at the plant.”
But she remains hopeful that the tide is turning among the all-important consumer base driving positive change. From her base in Florida, she is delighted to see people talking about supply chain, manufacturing or climate issues when she switches on “Good Morning, America.” “We would never hear those conversations on the regular television before,” she says excitedly.
The coronavirus pandemic has also helped to focus minds, she admits: “We’ve all had to stop and reflect on what’s most important. That all comes back to family. I have four children and I want generation after generation of these children to have not just a viable planet, but a thriving planet.”
For Dow, which is currently working toward its third set of 10-year sustainability targets, COVID-19 has reinforced the need for collaboration in addressing not only Scope 1 and 2 emissions, but Scope 3 impacts further along the value chain. “The pandemic has been good for sustainability because it has brought to the fore what’s critical for humanity,” Heath asserts.
So, what does the future hold for Dow as it maintains momentum and continues to evolve in line with market shifts? Heath’s answer is dominated by one word: Circular.
“These solutions are here to stay. You can’t have a planet of ten billion people without having pretty much everything that we do become more circular. That’s where our businesses are focused.”
She points to Dow’s RENUVA mattress-recycling program as an example of how the company plans to close the loop, recycling polyurethane foam from end-of-life mattresses and turning it into polyols that can be used in new mattresses.
Elsewhere, Dow’s ongoing partnership with The Nature Conservancy has put a value on nature-based solutions in its commercial decision-making. And the company will also focus more on water stewardship and improving biodiversity at its manufacturing sites.
As for Heath, after three decades in the same business in a variety of roles, she says pushing the sustainability agenda is the most meaningful thing she has done.
“When I think about what I will do after I retire from Dow, whatever it may be, I expect to continue to be doing what I am doing. I want to help many other companies — medium, small or big — become more sustainable and really bake sustainability into the way they work. It has to be like breathing; otherwise, we are not working collectively for a sustainable future.”