Sustainability Metric Spurs Efforts

Index provides insights about product portfolio and new developments.

By Anne Wallin, The Dow Chemical Company

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Today’s global challenges — climate change, water scarcity, food provision, declining ecosystem services, human development, and the overall transition to a sustainable society and planet — require solutions of unprecedented scale. Public policy and behavior change will play a significant role in addressing these challenges. So, too, will business and technology. Indeed, in the decades ahead, these challenges offer tremendous opportunity for organizations that can contribute to tackling them.

Dow recognizes that chemistry can enable development of solutions to many of today’s most pressing problems. To help strengthen the link between its efforts and these global challenges, the company created its sustainable chemistry program, which applies lifecycle thinking to help evaluate the sustainability benefits delivered by its products and science-based solutions. A key component of Dow’s 2015 sustainability goals, this concept has helped drive a culture change toward understanding more holistically how the company’s products and technology can address these global challenges.

As part of its 2015 sustainable chemistry goal, Dow developed the sustainable chemistry index (SCI), a metric used to assess the relative sustainability performance of its entire product portfolio. The SCI defines the 2015 goal, which is to achieve 10% of the company’s sales from products “highly advantaged” by sustainable chemistry.

Building on the increasing sustainability momentum in its business units since 2007, Dow delivered 22.4% ($13 billion) of sales from products that are highly advantaged by sustainable chemistry in 2014. This result surpasses the aggressive 10% target by more than twofold, and represents the realization of sustainable chemistry efforts that have been accelerated over the last seven years under the 2015 sustainable chemistry goal (Figure 1). Additionally, our aggregate SCI score hit an all-time high of 25.0 points then, up from the 2007 baseline value of 20.4 (Figure 2). These accomplishments clearly underline the shift in the company’s portfolio toward products that deliver value to society based on their ability to address sustainability challenges like energy efficiency, food production and water scarcity.

The rise in SCI performance during the 2015 goal timeframe reflects increased sustainability awareness within the Dow culture. This awareness has enabled Dow employees to better understand how to integrate sustainability into their roles, from informing business strategies to developing and communicating solutions that capture opportunities to improve sustainability. These actions demonstrate the value of the sustainable chemistry approach, which utilizes lifecycle thinking to identify products that help address sustainability challenges today, and helps position the company for success over the long term.

The Sustainable Chemistry Index

Dow developed the SCI as a tool to quantify the relative sustainability performance of the company’s product portfolio. The metric is based on eight categories related to product sustainability:

Renewable or recycled content. How much of the product is derived from renewable or recycled resources?
Resource management. How abundant and well managed are the resources that have been used to make the product?
Manufacturing efficiency. Are Dow’s operations becoming more efficient relative to past performance?
Environmental lifecycle benefit. Are there environmental benefits associated with the product when evaluated from a lifecycle perspective?
Social need benefit. Does the product address societal needs?
Manufacturing and transportation risk. What is the level of manufacturing and transportation risk associated with the product?
Value chain risk. What is the level of product risk related to the product value chain?
Public policy and end-of-life risk. What is the level of risk related to public policy initiatives and posed by product end-of-life scenarios?

Dow products are rated based on questions that cover these eight categories to come up with an SCI score. The SCI defines “highly advantaged” sales based on a threshold score; sales scoring above this threshold are considered to be highly advantaged sales and are counted toward the 2015 goal. Highly advantaged products are likely to contain renewable materials, deliver environmental benefits like energy efficiency and water resource availability, address social needs like food production and drinking water, and have relatively low product sustainability risk.

Each category accounts for five possible SCI points, with a score of “five” signifying “full credit” for that category — so the best possible SCI score is 40 points. Dow business SCI scores are calculated based on the SCI scores of all products sold by each business, with scores weighted by revenue. These business scores are then similarly aggregated to produce an overall SCI score for the company.

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