Dupont today announced that it is joining the growing ranks of old-line industrial companies embracing sustainability as a core business strategy. At an event in Washington, D.C., Dupont's chairman and CEO, Chad Holliday, set forth the company's "2015 Sustainability Goals," including its plans to derive $6 billion or more in new revenues from sustainability-minded products.
This isn't Dupont's first foray into the sustainability world. Indeed, it is the 204-year-old company's third wave of environmental commitments since 1998. But today's announcement seems to represent the completion of a decade-long transformation the company has undergone -- from an environmental pariah to a sustainability leader. Dupont still carries some baggage from its days as a pure-play chemical company, but increasingly it is moving toward cleaner technologies in pursuit of new business opportunities. (Dupont is a client of the sustainability strategy firm GreenOrder, with which I am affiliated, though I have played a minor role in the Dupont engagement.)
In his announcement, Holliday made four specific marketplace commitments: To double Dupont's R&D investments in "environmentally smart market opportunities" by 2015; grow annual revenue by $2 billion or more from products that create energy efficiency or reduce greenhouse gas emissions; double annual revenues to $8 billion from sales of non-depletable resources; and introduce at least 1,000 new safety products or services.
In addition, Holliday announced five 2015 "footprint goals," including reductions in greenhouse gases, water consumption, and airborne carcinogens, and ensuring that 100% of its off-site fleet of cars and trucks by 2015 "represent the leading technologies for fuel efficiency and fossil fuel alternatives."
What's going on here beyond business as usual? "The new part is that we're driving specific commitments forward, being transparent about it, and putting R&D money behind it," Dawn Rittenhouse, Dupont's Director of Sustainability, told me recently.
Also new is that the company is setting nine-year goals -- a mere blip in terms of sustainability, but an eternity in terms of corporate strategy. That longer view, says Rittenhouse, has afforded her team to seek more holistic solutions. "We've always said we've wanted longer-term goals. If you do a two- or three-year goal, you can only make slight, end-of-pipe improvements. But with longer goals, you can do some really creative, innovative development."
Like GE, BP, and several other companies that have made significant public pronouncements in recent months, Dupont views sustainability as a key business opportunity. Halliday has previously has stated that "For us, sustainability is not just our corporate mission, it is also a business imperative for success in the 21st century." His company already is in a range of clean-tech businesses -- for example, Dupont supplies "eight of the nine major products that go into solar panels," says Rittenhouse. The company also is engaged in biofuels, fuel cells, green building products, low-VOC coatings, air and water filtration, building insulation, bio-based plastics, and several other products that have some clean and green attribute.
Of course, Dupont also is grappling serious issues. Chief among them is a chemical called perfluorooctanoic acid, or PFOA, used by Dupont in Teflon, among other applications, which has come under fire by regulators, activists, and shareholders, who have accused the company of hiding information suggesting that a chemical might cause cancer, birth defects, and other ailments. Dupont says it is committed to reducing PFOA use.
Still, Dupont has come a long way since its days as an traditional chemical manufacturer. (It now calls itself a "science-based products and services company.") Back in the 1980s, it was the largest producer of ozone-depleting chlorofluorocarbons -- Dupont actually invented them -- and was the nation's largest of polluter of toxic emissions, according to government data. In 1995, one activist group named the company -- along with Exxon, GM, and Union Carbide -- to its list of "least-wanted companies." Says Rittenhouse: "Dupont was not the company that anybody wanted around."
If Chad Holliday has anything to say about it, people will want Dupont around for a long time.
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DuPont's "sustainability" initiative is noble sounding, but the proof will be in the putting. Its problems with PFOA are indicative of a bigger issue - the need for any company in the chemicals business to transition to safer materials. DuPont management has pledged to reduce emissions of PFOA, but has not committed to divorce the company from this problematic chemistry of PFOA and other perfluorinated compounds. . Many key market players, including market giants like Conagra, Wal-Mart, and McDonalds are looking for a faster exit from these chemicals whether they come from DuPont or elsewhere. That's one reason that 29% of DuPont investors in voted at this year's annual meeting to demand that the company move to more expeditiously find a means to END the use of these chemicals, not continue on its slow and risky course of gradually reducing them. It might be said that "sustainability" for Dupont means above all else finding safer alternatives to its own problem chemicals. Today's announcement doesn't really fill the bill...
Sanford Lewis
DuPont Shareholders for Fair Value
DuPontshareholdersalert.org
Posted by: Sanford Lewis | October 10, 2006 at 12:14 PM
It's all good that in the future dupont will be green. Great that's what we all want. However a company that finances it's green with funds generated by brown will always be a villian. They need to add another codicil to their will. Not only will we lead on sustainability but we're headed backwards into the past and we're greening that too.
Posted by: s bates | October 11, 2006 at 08:13 AM