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Corporate social responsibility: Pursuing the triple bottom line
12:55 PM MDT | June 3, 2013 | —Rebecca Coons
The chemical industry continues to face widespread public mistrust despite being an enabler of advances that are key to solving global challenges as well as efforts to improve product and process safety. Increased transparency and stakeholder dialogue about industry’s considerable corporate social responsibility efforts should help reshape public perception.
Despite developing many of the technologies key to solving the global challenges of climate change, population growth, and sustainable development, the chemical industry is ranked among the least-trusted industries ( p. 23) in a recent survey of the general population. Industry executives say corporate social responsibility (CSR) efforts, including a focus on triple bottom line factors, measure social, environmental, and economic impacts—also known as the three Ps of people, planet, and profits—and increased dialogue and transparency with stakeholders are key to addressing this mistrust.
“While most of the public recognizes that chemicals are essential and improve the quality of life, the public also often distrusts the chemical industry,” says Godefroy Motte, chief sustainability officer at Eastman Chemical. “We as an industry recognize the need to work with all stakeholders in addressing this mistrust.” Industry needs to be more transparent about its sustainability efforts to date and where progress still needs to be made to improve its image, Motte says.
Thorsten Pinkepank, director corporate sustainability relations at BASF, says that making the “enabling role of chemistry” for sustainability solutions more transparent to consumers has been a challenge. “Over the past 20 or 30 years, the chemical industry, including BASF, has learned that transparency is the foundation for building public trust. We therefore share information about us and what we do; how and why we do it. We report our progress annually.”
BASF engages with its stakeholders through dialogue, projects, and partnerships, Pinkepank says. “Industry initiatives such as Responsible Care and the Global Product Strategy are effective approaches. As part of our Responsible Care management system, we have set ourselves ambitious goals for environmental and health protection, safety, and security. We assess our progress on a yearly basis and publicly disclose the status in our externally audited, integrated report.”
Debra Phillips, managing director for Responsible Care at ACC, says CSR is no longer just about measuring and reporting what happens within a company’s fence line. CSR has evolved to incorporate a more holistic perspective across the supply chain. “The chemical manufacturing industry is evolving alongside [CSR] by assessing our industry’s overall impacts and contributions to the entire supply chain, including innovations that contribute positively to life-cycle impacts of products that use chemistry,” she adds.
CSR efforts provide benefits beyond improving industry’s image, Pinkepank says. “The strategic and organizational implementation of sustainability helps us to identify risks in an early stage while simultaneously opening up new business areas for BASF,” he adds. “In order to minimize risks, we set globally uniform environmental, safety, security, health protection, product stewardship, and compliance standards, as well as labor and social standards. We ensure that sustainability is integrated into the development and implementation of our business units’ strategies and research projects.”
Regaining public trust
Producers acknowledge that industry faces an uphill climb. Past accidents have made the public skeptical of industry’s efforts, while misinformation and lack of effective chemicals management legislation in the United States have caused consumers to question whether toxic chemicals are in everyday items. Healthy Child Healthy World released a report in January entitled The Toxic Takeover of Baby Nurseries: Chemicals of Concern Found in Almost Every Common Product and Furnishing.
As detection science has become more advanced, even the most minute amounts of a chemical raise the potential for concern. A Campaign for Safe Cosmetics report in 2009 found trace amounts 1,4-dioxane, classified by EPA as a probable carcinogen, in a number of leading baby shampoos. Johnson & Johnson (J&J) notes that 1,4-dioxane is a byproduct of the process that makes cleansers mild and nonirritating; is found naturally in some foods, including tomatoes and coffee; and is only measured in the parts-per-million range in its products.
Nonetheless, the company decided to take action to limit even those trace amounts. “Numerous regulatory agencies around the world have studied 1,4-dioxane and determined that it poses no harm at the trace levels found in personal care products,” J&J says. “Still, many people have expressed their concern, and we want you to have complete confidence that the levels in our beauty and baby-care products are extremely low. So, we’re in the process of reducing them even further.”
Pressure is being felt along the entire supply chain. The Campaign for Safe Cosmetics issued a report late last year ranking retailers on their commitment to cosmetics safety. “Retailers that sell personal-care products are the gatekeepers of safety for their customers,” says Janet Nudelman of the Campaign for Safe Cosmetics and the Breast Cancer Fund in a statement. “If the nation’s biggest retailers commit to stop selling cosmetics with toxic chemicals linked to disease, manufacturers who want to keep selling to those retailers will comply. There is a rich history of retailers using their purchasing power to effect positive market change. When retailers said no to [bisphenol A (BPA)] in baby bottles or to old-growth lumber, the market responded.”
Retailers are already responding, with a push for more sustainable packaging and the elimination of certain chemicals from finished products. Walmart in 2006 announced that it would ban three substances: propoxur and permethrin, both used in household insect-control products; and nonylphenol ethoxylates, an ingredient in some cleaning products. Walmart later announced it would not sell certain children’s products containing BPA and launched an initiative to reduce phosphates and increase use of more sustainable packaging.
The Consumer Specialty Products Association (CSPA) says under its product stewardship initiative Product Care, member companies voluntarily agree to follow a code of management best practices and adhere to a set of principles that include an emphasis on protecting health, promotion of safety and environmental consideration through product design, and anticipation of product disposal needs. The program is a platform for downstream specialty product manufacturers and marketers to promote the production and distribution of safe and effective formulated products. The program interacts upstream and downstream with other recognized initiatives such as Responsible Care, Responsible Distribution, and the Retail Sustainability Initiative, CSPA says.
Phillips says the chemical industry has a role to play in making sure chemicals are used safely and responsibly along the supply chain. ACC recently formed a value chain outreach committee to reach relevant value-chain representatives and provide downstream users with data and background to make science-based procurement and policy decisions informed by sustainability and safety considerations, she says. “We are reaching out further down the value chain stream than we have done in the past to provide our value chain partners with information not only about the safety of our products but also about the energy efficiency of our plants and manufacturing processes that contribute to a more sustainable overall footprint,” she says.
ACC and its member companies also recently developed a new Responsible Care Product Safety Code, a comprehensive set of commitments that each ACC member will make with respect to how it develops information and assesses, manages, and communicates the safety of its chemical products, Phillips says. “The code champions transparency, accountability, and science-based product development. It goes above and beyond what is required by law [and] adopts industry best practices, and its implementation will be validated by independent, third-party auditors.”
Motte says social media and the rapid sharing of information have boosted visibility and knowledge sharing, a phenomenon that creates both opportunities and challenges. “This is why transparency with all of these groups is so important. Many chemical companies and associations have worked to improve their communications and engagement with stakeholders to build trust, but it has been and will continue to be an ongoing journey,” Motte adds.
Greater engagement with stakeholders is one of the reasons Eastman joined the World Business Council for Sustainable Development (WBCSD), an association of 200-plus international companies advocating for corporate sustainability and cooperation for a more sustainable future for business, society, and the environment, Motte says. “We also regularly seek input and openly communicate with citizens and community leaders in the communities in which we operate,” he adds. “The objective of our community advisory panels (CAPs) is to provide citizens living in plant communities with the opportunity for open dialogue with company representatives.”
BASF has set up 78 CAPs worldwide, mostly at its larger production sites, Pinkepank says. A CAP is “a forum for open and honest dialogue between citizens and plant management,” Pinkepank says. “By encouraging a two-way flow of information, we hope to enhance communication with the communities in which we operate.”
Triple bottom line
No matter the industry, CSR is supposed to be a win-win by committing to operating a business with a focus on improving performance on triple bottom line–factors that measure impacts on people, the planet, and profits.
For the chemical industry, the easiest link to make between CSR and the bottom line are savings that come through reduced energy and resource use. Companies are quick to note, however, that the most important benefit comes from the innovation cycle: integrating CSR into business practices fosters innovative ideas and practices and leads to improved competitiveness.
“Ensuring safety, minimizing our environmental impact, and complying with all applicable laws and regulations are the only path[s] to earning and maintaining public trust,” Pinkepank says. “That is why for BASF sustainable development means the combination of long-term-oriented economic success with environmental protection and social responsibility. The strategic and organizational implementation of sustainability helps us to identify risks in an early stage while simultaneously opening up new business areas for BASF. In the future, sustainability will increasingly become a starting point for new business opportunities.”
At Eastman, innovation and sustainability work together to drive business results. “Growing and maintaining a pipeline of sustainably advantaged products is a core element of our growth strategy,” Motte says. “Eastman’s business philosophy embraces the triple bottom line—economic growth, environmental stewardship, and social responsibility. In fact, we leverage the symbiotic relationship between innovation and sustainability to drive growth and operational excellence. We make our operations more efficient, minimize risk across our business, deepen our customer relationships, and realize new growth opportunities.”