Transforming sustainability strategy into action : the chemical industry

"A highly informative and brilliant contribution to the growing sustainability literature."
-Dr. Brian and Mary Nattrass Managing Partners of Sustainability Partners and authors of The Natural Step for Business and Dancing with the Tiger

The goal of sustainable development, a recent focus in the corporate world, is to "ensure a better quality of life for everyone today and in generations to come." The challenge facing industry leaders is how to reconcile economically competitive strategies with environmentally sound and socially responsible practices.

Transforming Sustainability Strategy into Action: The Chemical Industry presents proven practical techniques to help managers in the chemical industry identify and assess options for improving the sustainability of their organizations, with a pragmatic emphasis on operational aspects, decision support, and guidelines for measuring progress. Employing a systematic approach and introducing globally proven problem-solving and decision-making tools designed to provoke questioning and creative thinking, the authors address some of the most challenging issues for the industrial world today.

The authors' combined expertise and extensive experience in translating sustainability strategies from theory into action make them uniquely qualified to deliver the kind of hands-on, responsive business solutions that will give corporate leaders the competitive edge in preparing for tomorrow's socially and environmentally conscious marketplace.

Author Notes

BETH BELOFF is President and founder of BRIDGES to Sustainability, a well-respected nonprofit organization dedicated to the practical implementation of sustainability in business and industry. She is an expert in integrating sustainable development with other business aspects and, in particular, a thought leader in measuring sustainability performance. Beloff has coauthored many publications on environmental accounting and sustainability performance assessment, and has received awards and grants from a variety of industrial, government, and nonprofit sources.

MARIANNE LINES , a Senior Associate at BRIDGES to Sustainability and Principal of Clear Lines Collaborations, works with a wide range of private and public sector clients to improve their sustainability performance. Under her leadership, the Canadian Centre for Pollution Prevention became renowned for its capacity to help organizations incorporate pollution prevention into their business planning and decision-making. Recognized for creating lasting alliances and inspiring collaborative action, Lines is the recipient of several prestigious awards for her efforts to foster environmental and business partnerships.

DICKSEN TANZIL is Research Director at BRIDGES to Sustainability. Trained as a chemical engineer, Tanzil has served as technical lead on various research and advisory projects involving life-cycle assessment, total cost assessment, and sustainability indicators and metrics.
Beloff and Tanzil have recently joined Golder Associates, Inc., to develop its sustainability practices in North America.

Marianne LinesMarianne LinesBeverley ThorpeBernard K Gadagbui and Lynne T Haber and Michael L DoursonJoel TicknerKen GeiserJoanna D UnderwoodRichard A LiroffRichard SigmanAgnes M ShanleyPeter H SpitzBeth BeloffElizabeth C Girardi Schoen and Stephen PoltorzyckiArt GillenArt GillenRainer OchsenkuehnArt GillenRobert B PojasekKarl-Henrik Robert and Sissel Waage and Dicksen TanzilCatherine GreenerDave ShermanCate GableDicksen Tanzil and Earl R BeaverLauren HeineMartin A AbrahamDicksen Tanzil and Beth R BeloffDavid J C Constable and Alan Curzons and Ailsa Duncan and Concepcion Jimenez-Gonzalez and Virginia L CunninghamErnst SchwanholdBeth BeloffKarina Funk and Pamela Cohen Kalafut and Jonathan LowLise Laurin and Greg NorrisBeth Beloff and Dicksen Tanzil and Matthew RetoskeMitchell MathisKaren L CoyneKaren L CoyneNeil Smith and Paul ScarbroughBrad VerricoRainer OchsenkuehnJeff WeinrachStephanie MeyerThomas C PasztorScott BergerNeil Smith and Joan BighamKen GeiserBeverley ThorpeJoanna D UnderwoodMark DorfmanMark R WiesnerAndrea LarsonBeth BeloffAndrew Savitz and Douglas Hileman and Michael BeslyKarina FunkDicksen Tanzil and Dawn G Rittenhouse and Beth R BeloffMark Wade and Joe MachadoErnst SchwanholdDavid J C Constable and Alan Curzons and Ailsa Duncan and Concepcion Jimenez-Gonzalez and Virginia L CunninghamKeith J MillerDon ReedMarc BrammerRichard LiroffDavid Robert Taschler

Foreword	p. xix
Preface	p. xxiii
Acknowledgments	p. xxv
1 Introduction	p. 1
1.1 Organization of the Book	p. 3
Reference	p. 5
2 Addressing Sustainability in the Chemical Industry	p. 7
2.1 Introduction	p. 7
2.2 Understanding the Chemical Industry	p. 8
2.2.1 Sector Profile	p. 8
2.2.2 Contribution to the Economy	p. 9
2.3 Drivers of Sustainability	p. 10
2.3.1 Chemical Sector Survey	p. 10
2.3.2 Survey and Focus Groups Key Findings	p. 18
2.3.3 Current Status of Sustainability Programs	p. 20
2.4 The Role of Responsible Care in Advancing Sustainable Development	p. 20
2.4.1 Public Trust and Environmental Performance	p. 22
2.5 Challenges Ahead	p. 24
References	p. 25
3 Views on Key Issues Facing the Chemical Industry	p. 27
3.1 Overview	p. 27
3.2 The Chemical Industry and the Public: Will the Chemical Experiment Continue?	p. 31
3.3 Risk Assessment	p. 35
3.3.1 Chemical Risk Assessment as Used in Setting Regulatory Levels or Standards	p. 35
3.3.2 The Limits of a Risk Assessment-Based Approach to Sustainability in the Chemical Industry and the Need for a New Paradigm Based on Precaution	p. 42
3.4 Limits of Risk Management and the New Chemicals Policies	p. 52
3.4.1 Conventional Chemical Risk Management Policies	p. 53
3.4.2 New European Chemicals Policies	p. 55
3.4.3 New International Chemicals Policies	p. 57
3.5 Impacts to Human Health and the Environment	p. 58
3.5.1 The Challenge of PBTs for the Chemical Industry	p. 58
3.5.2 Hormone Disrupting Chemicals (Endocrine Disruptors)	p. 62
3.6 Impacts of, and Issues Associated with, Chemical Production from Manufacture to Final Use and Disposal	p. 65
3.6.1 Use of Natural Resources and Releases to Air and Water and Waste Generation	p. 65
3.6.2 Environment, Health and Safety Issues and Policies	p. 68
3.7 Closing the Gap on Chemical Plant Security	p. 69
3.7.1 Doing the Right Thing	p. 73
3.7.2 The Human Factor	p. 73
3.7.3 Implementation is a Weak Point	p. 74
3.7.4 Need to Look Offshore	p. 74
3.8 Economic Issues and Competitiveness	p. 75
References	p. 81
4 Planning for Sustainability	p. 89
4.1 Planning Overview	p. 89
4.1.1 Planning Framework	p. 89
4.1.2 Corporate Sustainability Learning Curve	p. 92
4.2 GEMI's Approach to Sustainable Development Planning	p. 95
4.2.1 Planning Framework	p. 96
4.2.2 Who Should Use SD Planner?	p. 97
4.2.3 Company Experience with SD Planner	p. 103
4.2.4 Conclusion	p. 104
4.3 Environmental Management Systems (EMS) Frameworks for Sustainability	p. 105
4.3.1 Expansion of Environmental Management Systems to Address Sustainability	p. 105
4.3.2 The American Chemistry Council's Responsible Care Management System	p. 108
4.3.3 EMAS versus ISO 14001	p. 110
4.3.4 Occupational Health and Safety Assessment Series (OHSAS 18001:1999)	p. 114
4.3.5 Using Six Sigma Management Initiatives	p. 116
4.4 The Natural Step Framework: Backcasting from Principles of Sustainability	p. 119
4.4.1 "Backcasting" from Principles of Success: Introduction to The Natural Step Framework and Approach	p. 120
4.4.2 Understanding Complex Systems and Thinking Upstream: Rationale for the Principles of The Natural Step Framework	p. 121
4.4.3 Applying The Natural Step Framework: A Strategic Sustainable Development Decision-Making Process	p. 123
4.4.4 Integrating Sustainability Thinking into Action: The Dynamics of Dematerializations and Substitutions	p. 124
4.4.5 Industry Example: PVC Production at Hydro Polymers	p. 126
4.4.6 Discussion and Conclusion	p. 128
4.5 Natural Capitalism for the Chemical Industry	p. 130
4.5.1 What is Natural Capitalism?	p. 130
4.5.2 Four Principles of Natural Capitalism	p. 131
4.5.3 The Natural Capitalism Framework	p. 132
4.5.4 Implementing Sustainability through Natural Capitalism	p. 139
4.6 Sustainable Value in the Chemical Industry	p. 140
4.6.1 The Chemical Industry's Challenge	p. 140
4.6.2 Who are Stakeholders?	p. 142
4.6.3 The Need for a New Approach	p. 143
4.6.4 A Disciplined Process	p. 146
4.6.5 Three Key Phases	p. 146
4.6.6 Conclusion	p. 149
4.7 CSR/SRI Reporting Complexity and the Future 500 CAP Gap Audit: An Opportunity for Improved Strategic Business Planning and Stakeholder Alignment	p. 150
4.7.1 A Business Case Introduction	p. 150
4.7.2 The CSR/SRI Standards, the Future 500 CAP Gap Audit, and Business Planning	p. 152
4.7.3 Conclusion	p. 158
References	p. 159
Suggested Reading	p. 161
5 Designing for Sustainability	p. 163
5.1 Designing for Sustainability: Overview	p. 163
5.1.1 Designing for Sustainability: What It Means	p. 164
5.1.2 Design and Lifecycle Assessment	p. 166
5.1.3 Sustainable Design Strategies and Implementations	p. 168
5.2 Cradle-to-Cradle Material Assessment and Product Design	p. 179
5.2.1 The Cradle-to-Cradle Model	p. 179
5.2.2 The Context for Cradle-to-Cradle	p. 180
5.2.3 The Cradle-to-Cradle Approach to Material Assessment and Product Design	p. 181
5.2.4 What the Chemical Industry Can Do	p. 186
Acknowledgment	p. 188
5.3 Principles of Sustainable Engineering	p. 188
5.3.1 The Principles	p. 189
5.3.2 Discussion of the Principles	p. 189
5.3.3 Concluding Comments	p. 194
References	p. 194
6 Implementing Sustainable Development: Decision-Support Approaches and Tools	p. 199
6.1 Assessing Impacts: Indicators and Metrics	p. 199
6.1.1 Overview	p. 199
6.1.2 The GSK Approach to Metrics for Sustainability	p. 214
6.1.3 The Eco-Efficiency Analysis Developed by BASF	p. 220
6.2 Assessing Values: Costs and Benefits	p. 228
6.2.1 Overview	p. 228
6.2.2 Intangibles and Sustainability	p. 229
6.2.3 Total Cost Assessment: Looking at All the Costs Involved with a Decision	p. 234
6.2.4 Societal Costs	p. 238
6.2.5 Valuing Ecosystem Services	p. 249
6.3 Auditing Sustainability Performance	p. 256
6.3.1 Introduction	p. 256
6.3.2 Sustainability Auditing	p. 257
6.3.3 Corporate Responsibility Auditing: Assuring What Companies Say to the Public is Truthful	p. 272
6.3.4 Auditing Responsible Care Worldwide	p. 277
6.3.5 EHS Management System Audit Strategies for RCMS, RC14001, and ISO 14001	p. 278
6.3.6 New Mexico's Green Zia Environmental Excellence Program: Third-Party EMS Performance Auditing	p. 280
6.4 Reporting Sustainability Performance: Latest Trends in Corporate Reporting, New Tools, and Practices	p. 287
6.4.1 Sustainability Reporting is Becoming a More Common Practice	p. 287
6.4.2 The Organizational Scope of Reporting Varies Substantially	p. 290
6.4.3 There are Sound Business Reasons Why Companies are Reporting	p. 290
6.4.4 This is a Time of Experimentation: To be Effective, Reports Should Evolve to Address a Number of Emerging Issues	p. 291
6.4.5 Moving Forward on Sustainability Reporting	p. 297
6.4.6 Sustainability Reporting Case Study: Conducting Today's Business with Tomorrow in Mind	p. 297
6.4.7 Tales from the Trenches	p. 298
6.5 Security and Sustainability	p. 299
6.5.1 The Roots of Terrorism	p. 300
6.5.2 Terrorist Strategies and Tactics	p. 300
6.5.3 Security Vulnerability Analysis	p. 301
6.5.4 Security Countermeasures	p. 306
6.5.5 Long-Term Security Management	p. 306
6.5.6 Can Sustainability Prevent Terrorist Attacks?	p. 307
6.6 Building Corporate Social Responsibility	p. 307
6.6.1 The Business Case for Corporate Social Responsibility	p. 308
6.6.2 Managing Responsibly	p. 310
6.6.3 Drivers of Corporate Social Responsibility	p. 311
6.6.4 Managing Supply Chains Responsibly	p. 315
6.6.5 Protecting and Contributing to the Community	p. 318
References	p. 321
7 Future Directions for the Chemical Industry	p. 329
7.1 Sustainable Directions for the Chemical Industry: A Look to the Future	p. 329
7.1.1 Chemical Stewardship: Services	p. 330
7.1.2 Green Chemistry: Materials and Function	p. 331
7.1.3 A Look to the Future	p. 333
7.1.4 Moving Towards Sustainability	p. 334
7.2 Rethinking Products	p. 335
7.2.1 Safer Chemicals Within Reach	p. 335
7.2.2 Addressing the Challenge of PBTs	p. 339
7.3 New Directions	p. 342
7.3.1 Biomimicry: How and Why R&D Should Be Driven By Nature's Design	p. 342
7.3.2 Sustainability, Environment and Nanomaterials	p. 348
7.3.3 Entrepreneurship and Innovation	p. 352
References	p. 357
8 The Business Case for Sustainable Development	p. 361
8.1 Overview	p. 361
8.2 2004 Chemical Industry Sustainability Survey (Compiled by PricewaterhouseCoopers, LLP)	p. 363
8.2.1 Overview	p. 363
8.2.2 Introduction	p. 364
8.2.3 Survey Analysis and Follow-Up	p. 366
8.2.4 Focus Groups' Perspectives	p. 375
8.2.5 Comparison to Other Published Surveys	p. 378
8.2.6 Conclusions and Path Forward	p. 380
8.3 Sustainability and Performance: An Overview	p. 382
8.3.1 Intangibles and Value Creation	p. 384
8.3.2 Sustainability in Practice	p. 385
8.3.3 Driving Innovation	p. 386
8.3.4 Communicating Transparency, Transparently	p. 387
8.3.5 Creating Differentiation	p. 388
8.3.6 Managing Risk	p. 388
8.3.7 Enhancing Growth and Expansion	p. 389
8.3.8 A Company-Level Sustainability Model	p. 390
8.4 DuPont: Growing Sustainably	p. 392
8.4.1 Sustainability as a Growth Strategy	p. 392
8.4.2 DuPont's Journey	p. 395
8.4.3 Realizing the Transformation	p. 396
8.4.4 Managing Sustainable Growth	p. 397
8.4.5 Sustainable Growth in R&D	p. 397
8.4.6 Sustainable Growth in Operations	p. 398
8.4.7 Results and Challenges	p. 400
8.4.8 The Business Case	p. 401
8.5 Business Value from Sustainable Development at shell	p. 402
8.5.1 The Lessons of the 1990s	p. 403
8.5.2 Responding to the Challenge	p. 404
8.5.3 A Different Way of Doing Business	p. 405
8.5.4 The Business Case for Sustainable Development	p. 406
8.5.5 Embedding Sustainable Development into the Organization	p. 407
8.5.6 Measuring and Communicating Performance	p. 409
8.5.7 Engaginn with Stakeholders	p. 410
8.5.8 Working with Others	p. 410
8.5.9 Contributing to Sustainable Development and the Use of Finite Resources	p. 411
8.5.10 Conclusion	p. 412
8.6 Sustainable Development: An Integral Part of BASF's Corporate Values	p. 413
8.6.1 Values and Principles	p. 414
8.6.2 Our Commitment to the Global Compact	p. 414
8.6.3 Management Structures	p. 414
8.6.4 Examples for the Implementation of Sustainable Development within BASF	p. 415
8.6.5 The Eco-Efficiency Analysis	p. 418
8.6.6 Dialog: An Important Part of Sustainability	p. 420
8.6.7 Financial Markets Honor Sustainable Development	p. 421
8.6.8 Conclusions	p. 422
8.7 The GSK Approach to Sustainable Development	p. 422
8.7.1 Introduction	p. 422
8.7.2 Sustainability Strategy	p. 424
8.7.3 Designing Products for Environmental Sustainability	p. 427
8.7.4 Green Chemistry Guide	p. 428
8.7.5 FLASCCopyright: Fast Lifecycle Assessment for Synthetic Chemistry	p. 429
8.7.6 Materials Guides	p. 430
8.7.7 Conclusions	p. 434
8.7.8 Acknowledgments	p. 434
8.8 Moving 3M Toward Sustainability: The Business Case for Sustainable Development	p. 435
8.8.1 Transition to Sustainability	p. 436
8.8.2 Organizing the Move Toward Sustainability	p. 437
8.8.3 Sustainability and Growth	p. 438
8.8.4 Sustainability and Risk Management	p. 440
8.8.5 Benefits/Opportunities	p. 441
8.8.6 Challenges	p. 442
8.8.7 The Business Case for Sustainability: The Bottom Line	p. 443
8.9 Achieving Business Value: The Investment Community Perspective on the Importance of Including Environmental and Social Aspects in Valuations	p. 444
8.9.1 Introduction	p. 444
8.9.2 Environmental and Social Issues as Business Issues	p. 444
8.9.3 "Value at Stake": Environmental and Social Issues in the Chemical Industry	p. 446
8.9.4 Examples of How Sustainability Leaders in the Chemical Industry View Value	p. 447
8.9.5 The Prevailing View of Mainstream Investors on Sustainability in the Chemical Industry	p. 450
8.9.6 Sustainability Research, Ratings, and Indexes	p. 451
8.9.7 Key Issues for Analysts of the Chemical Industry Now and in the Future	p. 453
8.9.8 What the Future May Hold for Investors	p. 453
8.9.9 What Could Be Next for Chemical Companies	p. 454
8.10 Investment Analysis: Dow and Bhopal, India	p. 455
8.10.1 The Meaning of Bhopal for Investors	p. 456
8.10.2 The Bhopal Disaster	p. 459
8.10.3 History of the Bhopal Case	p. 460
8.10.4 After the Dow Chemical Acquisition of Union Carbide	p. 462
8.10.5 Union Carbide's Pending Criminal Charges in Bhopal	p. 462
8.10.6 Toxic Wastes and Contaminated Groundwater	p. 463
8.10.7 Impact on Dow Chemical's Reputation	p. 466
8.11 Scientific, Political, and Investor Drivers of Chemical Industry Sustainability: An NGO Perspective	p. 468
8.11.1 New Scientific Understanding of Chemicals' Health Effects	p. 469
8.11.2 Increased Biomonitoring Programs	p. 469
8.11.3 Media and Public Attention to Chemical Exposures and Disease Incidence	p. 470
8.11.4 Changing Demand From "Chemical Choosers," a/k/a Consumer Goods Companies	p. 470
8.11.5 Convergence of Nonprofit Groups' Environmental and Public Health Agendas	p. 471
8.11.6 Tightening Regulations in Europe and at the State and Local Level in the United States	p. 472
8.11.7 Increasing Investor Concern	p. 472
8.11.8 Insurer and Reinsurer Concern	p. 473
8.12 The Role of Leadership and Corporate Governance	p. 474
8.12.1 The Case for Leadership Commitment	p. 474
8.12.2 Identifying the Leaders	p. 475
8.12.3 The Role of Champion	p. 475
8.12.4 Engaging the Board	p. 476
8.12.5 Experience Necessary	p. 476
8.12.6 Affiliation with Other DJSI Companies and Sustainability Initiatives	p. 477
8.12.7 Communicating the Commitment	p. 478
8.12.8 Walking the Talk	p. 479
8.12.9 The Call to Action	p. 480
References	p. 481
Appendix 1 Responsible Care Global Charter	p. 487
Appendix 2 Directory of Standards and CSR-Related Organizations	p. 492
Appendix 3 Author Biographies	p. 502
Index	p. 513

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