Stark message has broad implications

“Human beings consume more than the Earth can regenerate.” That stark nine-word sentence was delivered by BASF’s VP of Corporate Brand Management, Dr. Baerbel Arnold-Mauer, at the GPCA Sustainability Conference held in Dubai on 17-19 December, 2013. It has some far-reaching implications for the future of the chemical industry.

Even with all the attention that sustainability has garnered as a business proposition, the statement still has the ability to shock. For it is not a statement about a future state of the planet: it is a statement of present-day fact. Population growth is outstripping resources, whether those resources are fresh water, food, minerals, or energy. Yet, for the most part, discussions focus on the future, rather than the present, and industry often shows a startling lack of urgency in redefining its priorities for the challenges of the future, let alone the present. It is as if the world is trusting that some 11th hour solution to these major problems will become emerge, perhaps by wishful thinking.

Major chemical companies across the world are in the vanguard of rethinking the present and the future. They are redefining their strategies away from being suppliers of commodities towards being suppliers of solutions that help other industries become more sustainable. Dr. Arnold-Mauer’s BASF is truly at the forefront and has reworked its entire business plan for this new present and future.

But Dr. Arnold-Mauer’s comment raises a fundamental question in my mind: What will happen to today’s commodity chemicals and plastics businesses? The answer is not entirely obvious to me, even though there are some clear implications of her statement.

For example, a future chemical community that is focused on solving problems for other industries is unlikely to invent the non-recyclable, non-compostable, non-biodegradable plastic bag as an important product line. Increasingly valuable raw materials are unlikely to find their way into products that end-consumers treat as little more than fodder for landfills. At the same time, the chemical industry has billions of dollars of assets in the ground to provide those very commodities at the lowest possible cost, thus perpetuating the throw-away society.

The conclusion I have reached is that the age of indiscriminate consumption will lurch and sputter to an close in the next 10 to 20 years. More costly feedstock will combine with consumer pressure in the developed world to cause a radical departure from traditional consumption patterns. Chemicals and plastics that do not solve problems for the environment and society will slowly be phased out. Those that create problems of their own will be anathema. Recyclability or biodegradability will be designed-in attributes. A new agreement of the meaning of hazard and toxicity will help chemical industry solutions to pressing problems to gain acceptance.

To make this happen, however, there is a missing step. Currently-non-costed inputs and outputs of processes must be given values, using market mechanisms, so that companies have an imperative to shed their lowest-cost commodity mindsets and invest in the most sustainable solutions.

At the GPCA Sustainability Conference, it was suggested that chemical companies should conduct studies of their businesses as if a price existed for carbon emissions and other “externalities”, thereby getting a more comprehensive picture of their sustainability performance. As far as this author is concerned, that process needs to start now.