By Eric Roston
The Indian Olympic Association excoriated the International Olympic Committee (IOC) in December for making Dow Chemical Co. a sponsor of this summer’s London Games. The reason: Dow Chemical owns Union Carbide, which owned the Bhopal chemical plant that exploded in 1984 and killed an estimated 20,000 people. "The very presence of this company is against the spirit of the Olympic ideals," acting president Vijay Kumar Malhotra wrote.
Dow Chemical Chief Executive Officer Andrew Liveris said opposition to the sponsorship was "beyond belief," given the 17-year gap between the Bhopal tragedy and Dow's acquisition of Union Carbide. The IOC gently made a similar point.
If the Olympic ideal is setting elite goals and achieving them against the top competitors in the world, then the way Dow Chemical has remade itself in recent years actually does put it in the spirit of “going for the gold.” Forget about what’s happened in recent years, just look at the last week.
Last Wednesday, the Nature Conservancy, an organization hardly known for providing fig leaves to polluting companies, honored Dow Chemical at its annual global fundraising gala in New York, for the company’s collaborative research on how business can better value nature. The Conservancy, now led by former Goldman Sachs partner Mark Tercek, and Dow Chemical are working together on a five-year partnership to define in economic terms the value that nature -- including water, marshes and clean air -- provides the company. The findings will be shared publicly, with key scientific results offered to peer-reviewed journals. That's a potential milestone for corporate transparency because so much corporate research never leaves a company’s front door.
Last night, Neil Hawkins, Dow Chemical's vice president for sustainability, environment, health and safety, picked up a prestigious industry endorsement, the C.K. Prahalad Award for individual leadership in sustainability. "There is a very real movement afoot to build in the value of nature directly into financial models," Hawkins said in a phone interview last week. The award is given by the Corporate Eco Forum, an association of several dozen sustainability-driven companies that includes Dow Chemical. Hawkins holds a public health doctorate from Harvard University and has worked at Dow for 24 years across many different parts of the company, from research and development to government affairs. He represented Dow in the U.S. Climate Action Partnership, the block of global companies and NGOs that pushed for U.S. national climate legislation in 2009.
Dow Chemical learned in the 1980s, when facing public anger over dioxin pollution, that getting environmental and social issues right can be critical to business. The company in 1992 created its Corporate Environmental Advisory Council (CEAC), made up of outside experts. By 1996, the company set 10-year environmental, health and safety goals, which forced business units to rethink or rebuild entire operations. Since the mid-1990s, Dow Chemical has invested almost $2 billion in energy efficiency measures, which have saved it $9.4 billion through 2010. The first 10-year plan saw a reduction of 1.6 billion pounds of solid waste and a savings of 183 billion pounds of water. The first period ended in 2005. Dow, which renamed the CEAC the Sustainability External Advisory Council in 2008, is now most of the way through its second decade of sustainability, and issues quarterly reports updating progress.
"I'm not telling you there's a pot of gold at the end of every inquiry -- not by any means," Hawkins told an audience in Rio de Janeiro before last week’s UN sustainable development conference. But the company has found many large- and small-scale opportunities for innovation or efficiency. Its collaboration with the Nature Conservancy is only the most ambitious inquiry.
A 2015 goal for Dow is to introduce at least three innovations that can help address global problems. Yesterday, Dow announced the first of these so-called Breakthroughs to World Challenges: Dow AgroSciences’s Omega-9 Oils. These are cooking oils made from canola and sunflower that have the lowest amount of saturated fat among oils and 70 percent monounsaturated fat, according to a company white paper. Hawkins says use of the oils has removed more than a billion pounds of transfats and saturated fats from North American stomachs since their introduction in 2005.
Hawkins’s sustainability operation includes management of Dow Chemical’s legacy “issues and challenges”: Agent Orange, asbestos, the Bhopal disaster and dioxin. The issues might haunt the company into eternity. Just as likely, a corporate culture of sustainability can reduce risks that can lead to mistakes or tragedy.
Visit www.bloomberg.com/sustainability for the latest from Bloomberg News about energy, natural resources and global business.
-0- Jun/26/2012 20:15 GMT