Dow’s Third Decade – A Case Study in Sustainability

Pursuing Sustainability in the 21st Century

This is the seventh in a continuing series of case studies that look at the efforts of well known manufacturers as they pursue Sustainability. These case studies are not intended as evaluations of how “green” its subject companies are – in truth, every business can always improve. Rather, the purpose of these case studies is to provide useful examples of what is actually being done.

This essay examines the evolution of Dow Chemical’s Sustainability efforts, as those efforts enter their third decade. Dow Chemical is the world’s 2nd or 3rd largest chemicals company, depending on what one measures. Dow is based in the U.S. and operates globally.

Sustainability Goals for 1996 – 2005

In 1995, Dow developed a set of EH&S (Environment, Health and Safety) goals to be attained during the decade 1996 – 2005. Those goals could be summarized as:

>> Do less bad – Examples: Reduce environmental emissions and industrial accidents

>> Do more with less – Examples: Reduce solid waste, reduce waste water, reduce energy consumption

>> Business success – These efforts returned $5 billion on an investment of $1 billion in technology and processes

Sustainability Goals for 2006 – 2015

As 2005 approached, Dow’s perspective changed. Surging globalization, along with the successes the company enjoyed from pursuing their first set of goals, resulted in formulation of a second set of goals – Sustainability goals with a much broader scope than the internal, EH&S oriented first set. This set of goals includes:

>> Do more good – Examples: Increase use of clean energy; continue to improve employee safety performance

>> Relationships with local communities – Example: Make significant contributions to community improvement in locations where Dow has a major presence

>> Product stewardship and innovation – Example: Publish product safety assessments; increase percentage of sales of products advantaged by sustainable chemistry

>> Global significance – Examples: Maintain greenhouse gas emissions below 2006 level, even though the size of the business grows; achieve at least three breakthroughs that will significantly help solve world challenges

Of course, 2015 is not yet finished, so final results against quantified goals are not yet available. However, Dow does report on progress toward those goals quarterly. [1]

“At Dow, sustainability is about our relationship with the world and how we contribute to solving its many challenges” [2]

Sustainability Goals for 2016 – 2025

New goals for a third decade were recently published. The new 2016 – 2025 goals reflect experiences to date, in context of the vast changes that characterize today’s globalized commerce. Additionally, Dow itself is reorganizing internally to emphasize higher margin products. Accordingly, the new 2016 – 2015 goals are to be achieved by a Dow that is substantially different from the past. [3] The 2016 – 2025 goals include:

>> Inclusive planning – A “societal blueprint that integrates public policy solutions, science and technology and value chain innovation to facilitate the transition to a sustainable planet and society” will be developed in collaboration with the public and private sector. Presumably, this will be Dow’s comprehensive “road map” to Sustainability. Additionally, “Dow will work with other industry leaders, non-profit organizations and governments to deliver six major projects that facilitate the world’s transition to a circular economy.”

>> Valuing the natural world – Building on collaboration with the Nature Conservancy (an environmental NGO), Dow intends to generate $1 billion in cost savings and new cash flows through a systematic valuing of natural assets and the inclusion of those valuations in business decisions.

>> Breakthrough innovations – Dow will develop and commercialize breakthrough products that “will offset three times more carbon dioxide than they emit throughout their lifecycle and save three times more energy than they use throughout their lifecycle.”

>> Employee engagement – “Dow employees will give 600,000 hours to support students and teachers in science, technology, engineering and math education.” Further, “Dow volunteers will complete 700 sustainability projects around the world.”

For Smaller Manufacturers

A recent essay to this blog, We’re Not in the 20th Century Anymore, Toto, [4] discussed the numerous change drivers that confront manufacturers in these initial decades of the 21st century. Dow’s three sets of Sustainability goals present a longitudinal study of one large company’s response to those change drivers. Notice that the 1996 – 2005 goals are internally focused on doing things better. The 2006 – 2015 goals zoom out to be more inclusive of external stakeholders and to acknowledge Dow’s concern for global problems. The new 2016 – 2025 goals are broadly inclusive and substantially externally directed. The new goals are almost shockingly bold.

Taken together, the three sets of goals provide a rich example of successive changes in thinking, applied over time. Smaller manufacturers would do well to study all three sets of goals and corresponding results, as they become available. Of course, the specifics of a smaller manufacturer’s approach to the 21st century will differ from Dow’s. However, the direction, scope and downright boldness of Dow’s approach offer real food for thought. And, perhaps, cause for concern.

Chuck ReadingThoughtful comments and experience reports are always appreciated.

…  Chuck Harrington (Chuck@JeraSustainableDevelopment.com)

P.S: Contact me when your organization is serious about pursuing Sustainability … CH

This blog and associated website (www.JeraSustainableDevelopment.com) are intended as a resource for smaller manufacturers in the pursuit of Sustainability. While editorial focus is on smaller manufacturers, all interested readers are welcome. New blog posts are published weekly.


[1] Dow’s quarterly Sustainability Reports are available at: http://www.dow.com/en-us/science-and-sustainability/sustainability-reporting

[2] This quotation and much of the specifics regarding the 1996 – 2005 and 2006 – 2015 goals are from slides from a presentation by David Graham, formerly Dow’s VP for EH&S and Sustainability. The slides are available at: http://www.urv.cat/media/upload/arxius/W-Catedra_DOW_URV/Informes%20DOW/dow_-_sustainability_at_the_dow_chemical_company.pdf

[3] Much of the information quoted on the 2016 – 2015 goals is from recent Greenbiz and Environmental Leader articles:http://www.greenbiz.com/article/dow-chemical-thinks-it-can-generate-1-billion-valuing-nature, and http://www.environmentalleader.com/2015/04/15/dow-expects-1bn-cost-savings-by-valuing-nature-in-business-decisions/

[4] http://jerasustainabledevelopment.com/2015/05/02/were-not-in-the-20th-century-anymore-toto/