Green Energy and Technology

Transcription

1 Green Energy and Technology For further volumes:

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3 Eric Johnson Sustainability in the Chemical Industry

4 Eric Johnson Atlantic Consulting Obstgartenstrasse Gattikon (Zurich) Switzerland ISSN ISSN (electronic) ISBN ISBN (ebook) DOI / Springer Dordrecht Heidelberg New York London Library of Congress Control Number: Springer Science+Business Media B.V This work is subject to copyright. All rights are reserved by the Publisher, whether the whole or part of the material is concerned, specifically the rights of translation, reprinting, reuse of illustrations, recitation, broadcasting, reproduction on microfilms or in any other physical way, and transmission or information storage and retrieval, electronic adaptation, computer software, or by similar or dissimilar methodology now known or hereafter developed. Exempted from this legal reservation are brief excerpts in connection with reviews or scholarly analysis or material supplied specifically for the purpose of being entered and executed on a computer system, for exclusive use by the purchaser of the work. Duplication of this publication or parts thereof is permitted only under the provisions of the Copyright Law of the Publisher s location, in its current version, and permission for use must always be obtained from Springer. Permissions for use may be obtained through RightsLink at the Copyright Clearance Center. Violations are liable to prosecution under the respective Copyright Law. The use of general descriptive names, registered names, trademarks, service marks, etc. in this publication does not imply, even in the absence of a specific statement, that such names are exempt from the relevant protective laws and regulations and therefore free for general use. While the advice and information in this book are believed to be true and accurate at the date of publication, neither the authors nor the editors nor the publisher can accept any legal responsibility for any errors or omissions that may be made. The publisher makes no warranty, express or implied, with respect to the material contained herein. Printed on acid-free paper Springer is part of Springer Science+Business Media (

5 Abstract Sustainability programs have been adopted by many large, publicly-owned chemical companies in Europe, Japan and the US, and even by large companies in China and India. These programs aim to improve the industry s image and public trustworthiness, which sank to historic depths in the late 1980s or early 1990s and are still relatively low. In practice, sustainability is about public relations, which has been renamed stakeholder relations, and risk management. This book reviews the history and status of sustainability programs in the chemical industry. At its core is a survey of the world s 29 largest chemical companies how they do or do not put sustainability into action. (Six of the 29 do not put it into action, as the book explains.) It also covers: how academics, investors and the general public de fi ne sustainability (their de fi nitions differ from the chemical industry s); sustainability s brands as well as its limitations, and the problem of greenwash. It answers the questions: is sustainable necessary, does it pay, and is there a non-sustainable option? Finally, it recommends some guidelines for companies adopting or expanding sustainability. Keywords Sustainability Chemical Public image industry Strategy Communications v

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7 Contents 1 Foreword: Why this Book? Review of Existing Literature The Poor Image of the Chemical Industry Sustainability as Public Relations Sustainability and the License to Operate Sustainability as Religion Sustainability Chartas What Is Sustainability Reporting? GMO Introduction in Brazil, Thanks to Sustainability? Sustainability Is Global and Local Varying Definitions of Sustainability Don t Just Talk to Stakeholders, Listen to them, too Dealing with NIMBY by Stakeholderism Greenwash A Path to Sustainability for the Chemical Industry A 20-Year Path to Sustainability Stakeholderism Can Have an Economic Cause Needed: An Empirical Review References Summary: Sustainability Is Advancing, with More Changes to Come Sustainability in Practice: Communications, Regulatory Compliance, Risk Management Sustainability Defined Is Sustainability Inevitable, and Does It Pay? Sustainability s Limits Are the Causes for Sustainability Obsolete? Making Sustainability Sustainable vii

8 viii Contents 3 Introduction: Sustainability s Bandwagon Has Left the Station, But Where Is It Headed? Reference Why the Chemical Industry Turned to Sustainability How the Chemical Industry Upsets the Public Environmental Problems Perception of a Dishonest, Uncaring Response Reputation Versus Liability: The Love Canal Dilemma How Regulation Has Harmed the Industry s Image Regulation Recap Command and Control The Battle of Litanies: Regulators Versus Industry Losing the License to Operate? A Poor Public Image Scapegoating, Loss of License Sustainability: A Way to Keep the License, A Way to Influence Regulation Shell: Defensive, to Keep the License DuPont: Offensive, to Turn Regulation into Advantage For the Chemical Industry, Sustainability Is Conciliation References How Others Define Sustainability The Popular View of Sustainability The Theoretical (Academic) View of Sustainability The Financial Market View of Sustainability The Sustainability Ratings Industry Sustainability: Avoid Scandal, Pursue Eco-Opportunities References How Chemical Companies Define Sustainability, in Practice Research Method Sustainability Within the Corporate Organization Legacy Issues Corporate Organization for Sustainability Guidelines or Charter (and Definitions) Awards Associations Stakeholder Approach to Communications Defining Stakeholders (or, Who Reads These Sustainability Reports?) How Are Stakeholders Engaged? Rebranding Regulatory Compliance and Risk Management Operating Safety Environmental Management System... 94

9 Contents ix Environmental Indicators and Targets Product (or Process) Safety Governance EEO, Diversity, Economic Impact Recognition/Celebration of Green Opportunities References Sustainability Brands How the Leading 29 Chemical Companies Stack Up Why the Variations in Branding? What About Sustainability Crusaders? The Limits of Sustainability Fear of Liability Credibility Gap References The Thin Green Line: Between Sustainability and Greenwash Lying Spinning Words and Science What s in a Word or a Picture? The Quest for Sound Science Celebrating Compliance Celebrating Green Products and Processes Objection: It Is Not Really Green Objection: It Is Not Additional Objection: It Is Only for the Money Green Endorsements References Evaluating Sustainability: Is It Necessary, and Does It Pay? Academic Studies of Sustainability s Benefits Are Inconclusive Sustainability Makes for a More Attractive Employer Sustainability as a Way Out of Crisis? Not Obvious What If Love Canal Happened Today? Hoechst and Its Unsustainable Chairman How Stakeholders React to Sustainability Sustainability Successes Easing Regulation Industry-Friendly LCA Standards, and Life-Cycle Thinking Emission Reductions: MSRI Project of Dow and NRDC Responsible Care Sustainability Failures GMO 1: Monsanto in Europe

10 x Contents GMO 2: BASF, Monsanto, Syngenta and IAASTD REACH EU Ecolabels Zero Waste Is Sustainability Profitable, and Should It Be? What Is a Fair and What Is a Greedy Profit? There Is No Consensus Compliance Is More Profitable than Non-Compliance But Going Beyond Compliance Does Not Generate Extra Profit Should Public Relations Be Done with a Sustainability Approach? Beyond Profit: Sustainability as Religion References Is There a Non-Sustainable Option? Cigarette Producers Armament Makers Albemarle References Get on Sustainability s Bandwagon, But Not Blindly or Blithely Study Your Stakeholders Employees Are Your Most Important Stakeholders Most Other Stakeholders Are Scandal-Driven Some Activists Are Paid to Be Activists Consider the Corporate Position and Culture Take Stakeholders Seriously With Promises, Less Is More Be Responsive, Not Necessarily Responsible Acknowledging Problems as Real Accepting Stakeholder Outrage Sustainability and Responsibility: Right Ideas, Wrong Words Remember the Risks Be Careful of Chasing Fads Talk Is Cheap, Money Is Real Beware Hubris Who Owns Morality? Return to a Safety Culture? References

11 Contents xi 12 Appendix 1: Company Classification Reference Appendix 2: Quantity Versus Quality How Experts and Laypeople Disagree About Technology Risks Quantitative Approach of the Experts Not Just Whether You Die, But How The Leading Cause of Death? Life

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13 List of Figures Fig. 1.1 A Union Carbide advert from Fortune magazine, Fig. 4.1 Headed down UK public opinion of the chemical industry, Fig. 8.1 A Shell advertisement that has been called greenwash xiii

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15 List of Tables Table 2.1 Example Shell s stakeholder approach to communications and external relations Table 2.2 Example Dow s recognition of sustainability opportunities Table 2.3 Example LG chemical s rebranding of compliance and risk management Table 2.4 Chemical industry stakeholders (in descending order of importance) Table 5.1 An example of corporate sustainability assessment criteria Table 6.1 Research target the world s 30 largest chemical companies, by revenues Table 6.2 Chemical companies pro fi led for sustainability Table 6.3 Chemical industry stakeholders (in descending order of importance) Table 6.4 Approach to stakeholders Table 6.5 Rebranding of risk and regulatory compliance Table 6.6 Recognition/celebration of environmental/social protection Table 7.1 Sustainability brands of leading companies Table 7.2 Sustainability brands, numbers, and some explanation Table 9.1 Sustainability s successes and failures Table 12.1 Complete classification of all companies studied xv