Sustainability has emerged as the linchpin across industries and is defined as “meeting the needs of the present without compromising the ability of future generations to meet theirs.” It has three main pillars: economic, environmental, and social. These three pillars are informally referred to as people, planet, and profits, said ARC’s Peter Reynolds, Principal Analyst and moderator, at the virtual ARC Industry Forum 2021 session on the sustainability future for energy and chemicals.
The United Nations Sustainable Development Goals (a collection of 17 Global Goals) is a blueprint to achieve a better and more sustainable future for all. Industry places more emphasis on affordable and clean energy, responsible production and consumption, and improving the quality of life. Consumer pressures, government regulations, and directives from investors are driving sustainability initiatives. The session participants:
Sustainability Delivers Value Growth
Dow’s Sustainability Journey
Dow is a 125-year-old company. After the Dow Dupont merger in 2019, the company began accelerating the roadmap for sustainability, said Ms. Draves. Today, Dow has close to 36,000 employees globally, 100+ manufacturing sites, and net sales of $39 billion. The company’s goal is to be the most innovative, customer-centric, inclusive, and sustainable materials science company. ESG (environmental, social, and governance) strategy is inherent to the company’s long-term value proposition as it drives responsible actions, productivity, and growth. The Dow team is fully aligned and empowered to realize these objectives, she added.
The challenges faced have been numerous. Dow continued to advance its ambition of being a strategic driver of long-term value despite the pandemic, hurricanes, and floods. However, the concept of sustainability is not new to Dow, said Ms. Draves. There is an ingrained culture and legacy of sustainability that began with the founder who was committed to saving energy, reducing waste, and focusing on safe and efficient operations. Further, she spoke about the “blueprint goals” that are sets of 10-year goals and the benefits accrued.
The company wants to make a significant impact and develop long-term targets in three areas: the circular economy, climate protection, and safer materials (includes reducing plastic waste, recycling, and reusing). In 2020, the company announced new carbon and circularity goals. The targets offer opportunities to drive meaningful progress through collaborations and technological advancements. Dow’s Climate Action Plan is a comprehensive approach that evolves consistently.
Sustainability Driving Business Strategy
Sustainability at BP
We are all aware that energy is important for economic growth, for reducing poverty, and for improving education. Globally, we are on an unsustainable path, and there are issues across the board. But there is hope, and an increased collective intent to act by all stakeholders, opined Ms. Wingfield. BP launched a new purpose last year - reimagining energy for people and our planet; and the company has transitioned from an international company to an international energy company. The company’s strategy focuses on three verticals and the three differentiators (horizontal bar) that converge and combine to offer integrated solutions to customers.
Sustainability is embedded in the company’s DNA and is part of what and how things are done and that includes integration into governance and decision making. From an operational point of view, BP has restated its aim to become a net zero company by 2050 or earlier; and help others on their journey too. Presently, there are 7,500 EV charging stations; the target is to install 70,000 EV chargers globally by 2030. The company aims to provide clean and accessible energy to drive sustainable economic growth. The focus is also on cleaner environments, enhancing biodiversity, natural climate solutions, and using resources responsibly. BP is ensuring biodiversity protection in an LNG expansion project in Indonesia, by avoiding the most sensitive areas on relocation of bird species on habitat restoration, and a commitment to long-term monitoring.
Ms. Wingfield explained how BP promotes well-being with a focus on mental and physical health; this was particularly relevant when the pandemic spread its tentacles.
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Keywords: Sustainability, ARC Industry Forum 2021, Energy and Chemicals, Dow, BP, Aspen Technology, ARC Advisory Group.