Man-made global warming: Many in the chemical industry still do not accept the science

Whenever I meet with groups of chemical people, it quickly becomes clear that there are many in our industry who do not accept the science behind claims of man-made climate change. Here at Chemical Industry Roundtables, we think that the rise in temperatures that is being observed right now, and which seem to be outside of statistical historic norms, are driven by man-made activity.

Just today, we got the news that last year was the hottest in record in the USA (see http://www.nytimes.com/2013/01/09/science/earth/2012-was-hottest-year-ever-in-us.html?hp&_r=0). As the article states: “Scientists said that natural variability almost certainly played a role in last year’s extreme heat and drought. But many of them expressed doubt that such a striking new record would have been set without the backdrop of global warming caused by the human release of greenhouse gases. And they warned that 2012 was probably a foretaste of things to come, as continuing warming makes heat extremes more likely.”

And not only heat extremes, but the phenomena which accompany them, like more violent storms and more persistent droughts.

I have the greatest respect for colleagues in the chemical industry who are suspicious of the science and who take the view that the absolute proof of man-made climate change is not yet available. But I also ask them to look at the consequences of being wrong. Many seem to believe that if they are wrong, there are always remedial steps that can be taken to mitigate the effects of man-made climate change. What I see is a destruction of carefully built value as companies and governments try to hold back the rising tide, and also effects that we cannot control at all, like acidification of the seas, and diseases thriving in new locations because of climate change. These mega-effects are not fixed by clever science. They need even the skeptics to consider that they might be mistaken and follow up their new-found concern with international action.

We need this to happen now.

Unilever on the march again

Whether you think all of its decisions are scientifically correct, you have to admire Unilever’s sustainability commitment. Take, for example, the issue of microplastics — small beads used to aid cleaning in personal care products. Unilever has recently announced: “We have decided to phase out the use of plastic micro beads as a ‘scrub’ material in all of our personal care products.  We expect to complete this phase out globally by 2015.” The reason is stakeholder concern that these micro beads will contribute to the plastic soup that has been forming in the oceans. There may be no reason to believe that the micro beads are toxic, but Unilever, once again, gets ahead of the curve.

Where is the similar leadership going to come from in the chemical industry? Imagine if a chemical company could express a sustainability commitment similar to that articulated by Unilever CEO, Paul Polman just recently at a business summit for young people: “Simply said, whilst most companies ask themselves how to use society and the environment to be successful, we flipped the question around 180 degrees and asked ourselves: how we can contribute to society and the environment to be successful.”

Chemical companies often bemoan the lack of good human resources to guide their futures. A vision like Polman’s is perhaps the missing element — young people look for inspiration, and a pure fossil-based approach, with an emphasis only on low-cost commodity production is, well, not inspiring. How can chemical leaders start to inspire the next generation? Let’s discuss that question in this column in the coming weeks.

 

Greenpeace Detox campaign: the good and the bad

Greenpeace is proving very successful at getting clothing brands to sign up to to eliminate all releases of hazardous chemicals throughout their entire supply chains and product lines by 2020.

Brands already committed include Mango, Zara, Esprit and Marks & Spencer, and Greenpeace is now organizing its considerable group of followers to write to Levi’s CEO to get that company to join the Detox campaign (http://www.greenpeace.org/international/en/campaigns/toxics/water/detox/).

Make no mistake, this is a clever campaign. The brands listed above, joined by the Race to Zero campaigns of sports clothing lines, are principally aimed at young people. Greenpeace is enlisting them and at the same time creating a new generation of environmentally sensitive consumers.

While cutting discharges and toxics is a noble aim, and much of the attention is on textile factories in China that are claimed to have been the major offenders and where it is likely there is room for improvement, there is a danger that hazard and toxicity will become even more confused in the public mind, and chemical manufacturers will be affected by yet more public pressure. Have scanned the Greenpeace site, I am very unclear whether it even draws a distinction between hazard and toxicity. With such an international reach, Greenpeace needs to do its part to ensure that the new generation of consumers is properly informed and not just confused through the actions of its campaigns.

The chemical industry, meanwhile, needs to become much more proactive in its attempts to deal with pressure groups. Defensiveness never pays dividends for our industry.

DuPont: “China Market Ripe for Biobased Product Growth”

“A majority of Chinese consumers are likely to purchase apparel, personal care, hygiene and household products made from biobased ingredients that offer environmental benefits.  These “green” products use ingredients that are composed of biological or renewable agricultural materials, rather than synthetics, and are biodegradable.”

That is the key finding of a survey conducted by DuPont in major Chinese cities earlier this year. Consumers were surveyed in Beijing, Chengdu, Dalian, Huangshi, Guangzhou, Nanjing, Shanghai, Wuhan and Yinchuan on the Chinese mainland, as well as Hong Kong. The results showed that a majority of people surveyed were likely to purchase apparel, personal care, hygiene, and household products made from biobased ingredients that offer environmental benefits.

DuPont says that more than 70% of Chinese consumers were confident that Green choices were very or somewhat good for the environment. That is a higher figure than the 60% of US consumers who gave the same answer in a similar survey last year. And Chinese consumers were agreed on which factors made a product green, with more than 80% agreeing that recycled content and presence of renewable materials were green characteristics.

A summary of the report results is at http://www2.dupont.com/media/en-us/news-events/corporate-news-releases.html. It will come as great encouragement to the bio-renewables industry, and should serve as a further reason why fossil-based companies should pay attention to the renewables business. When major brand owners use this information to gain advantages in the massive Chinese market, the pressure will be on the chemical industry to provide the supply of renewable building blocks that will be needed.

 

 

What is sustainability? Look for a simple answer

These days, Chad Holliday is Chairman of Bank of America. In a previous life he was CEO of DuPont, an early mover in implementing sustainability thinking in the chemical industry. At last week’s 7th GPCA Forum, Holliday spoke to the issue of sustainability and its importance to business planning in then industry.

What was particularly refreshing to hear was Holliday’s definition of sustainability — something that “lasts a long time”. Sounds simple, but keeping things simple may just be what is needed to get sustainability translated from a series of diverse projects into a business culture. Think of actions that will make your company last a long time, and you will already be addressing the deep issues that are encompassed by sustainability. After all, DuPont is the living example of how this simple starting point can lead to real progress in sustainability.

Sustainability is good, especially when it makes money

Mohammed Al Mady, CEO and Vice Chairman of SABIC, is a very direct communicator. At the 7th GPCA Forum in Dubai last week, he was characteristically straightforward when it came to investing in sustainability. He commented that sustainability makes sense, especially when it makes money.

That sounds like an easy comment, but it goes to the root of how to get the sustainability agenda implemented around the world. Asking that leaders adopt sustainability to save the planet, or a nebulous group of stakeholders, can be effective. Asking them to recognize that there are costs that do not hit their profit and loss statements, but which create a drag on society and which will have to be paid for one day (think GHG emissions) and a few more will be persuaded of the value of the agenda. Phrase it in terms of today’s system of profit and loss, and everyone will sign on to making the industry more sustainable.

And the gains need not be insubstantial. A real concentration on reducing energy and raw material inputs to processes really does lead to a more sustainable industry, and really does energize the whole workforce behind a common goal. Sure, this approach does not address the full ramifications of the sustainability agenda, particularly not some of the social issues, nor will it necessarily encourage transformational science, but it is a solid, understandable, and effective way to get an organization to think about the topic.

 

“We will never end poverty if we don’t tackle climate change”

These clear words come from a scientist who also happens to be head of the World Bank — Jim Yong Kim. Amid all the gloom of political inaction on climate change, it is refreshing to see the leader of this august institution, which has the potential to influence the funding of development around the world, taking climate change very seriously, and seeing it in its totality, as a threat to humanity on a scientific and social level.

Kim was answering questions about a new report from the World Bank, called Turn Down the Heat — http://www.huffingtonpost.com/2012/11/18/world-bank-climate-change-report_n_2156082.html. It foresees a rise in the planet’s temperature of 4C, if current policies continue, by the end of the century. Kim writes: “It is my hope that this report shocks us into action”. And the World Bank does have some influence. It will now mix climate change considerations in with its approach to development investment. The amount of money it can deploy will not change the curve of a warming planet on its own, but it is a good signal to others.

And it is not the only one. Four other news stories indicate that there could be some renewed activity in tackling climate change:

– People are accepting the idea of man-made climate change, even in the USA, where a recent Yale study found: “Americans’ belief in the reality of global warming has increased by 13 percentage points over the past two and a half years, from 57 percent in January 2010 to 70 percent in September 2012.” And more than half of Americans think that climate change is caused by man’s activity. With the USA’s leading role in emitting greenhouse gases, these are significant findings (http://environment.yale.edu/climate/files/Climate-Beliefs-September-2012.pdf);

– The State of California is going it alone in introducing a cap-and-trade system for limiting GHG emissions. Auctions of permits have already started. While California is out on its own in this regard, it has a reputation for blazing a trail that others follow (http://www.nytimes.com/2012/11/14/business/energy-environment/california-to-hold-auction-of-greenhouse-gas-emissions.html). The gamble on forming an emissions trading system could backfire and see jobs leave the state, or it could become the harbinger of wider action by other states and nations;

– President Obama, fresh from his re-election, has indicated that he will try to find at least incremental changes to legislation to bend the GHG curve. But at the same time, he is not promising any national legislation while unemployment remains high (http://www.washingtonpost.com/national/health-science/obama-to-continue-efforts-to-curb-greenhouse-gases-push-energy-efficiency/2012/11/07/06c70c66-28f9–11e2-96b6-8e6a7524553f_story.html);

– In the EU, with the economy going into a double dip recession (at least in the Euro Zone), and with output falling, the nascent Emissions Trading Scheme (or ETS) has hit a critical moment. Credits, which were issued in abundance, have become practically valueless, or at least worth so little that there is no incentive for companies to cut emissions. The EU is moving to correct that situation now (http://www.chemweek.com/envirotech/climate_change/EU-proposes-immediate-action-to-halt-buildup-of-CO2-emission-allowance-surplus_47689.html) by delaying the release to auction of a batch of new permits. It is also looking at how it can improve the program. The good news is that, recession or no recession, Europe still seems committed to playing its role in reducing man-made climate change.

Taken together these actions, plus that of the World Bank, are good signs that the world may yet rise to the climate change challenge before it is too late. That said, it will take something of a miracle at the upcoming talks in Doha to get truly concerted international action to reverse a warming trend that threatens to become irreversible.

Solazyme makes two announcements on oils production

Solazyme, a manufacturer renewable oils for fuels and food, is in the news today with two announcements:

– First, it reported that it will expand renewable oil production of its JV with Bunge to 300,000 tons/yr from the originally planned 100,000 tons.yr. The companies are building a 100,000-ton/yr plant in Brazil. The new capacity will come on stream at Bunge plants around the world. This is a deal in which Solazyme brings technology to produce a range of oils, while Bunge brings presence in sugar and food markets, and access to end users.
– Second, Solazyme and ADM have signed of strategic collaboration, manufacturing and market development agreements to produce Solazyme’s tailored algal oils in ADM’s fermentation plant at Clinton, Iowa. These oils will be sold primarily to the industrial and nutritional markets in North America. Target production will be 20,000 tons/yr in 2014, rising to 100,000 tons later.

These are impressive moves for Solazyme, which clearly has all of the ingredients necessary to become a major player in its field: proprietary highly-flexible technology, deep partnerships with existing oil producers, and access to end markets.

Map shows extent of plastic grocery bag bans: and

Thanks to Doris de Guzman (Twitter handle @DGreenblogger) for highlighting this map of plastic grocery bag bans around the world. You can also find it at http://www.factorydirectpromos.com/plastic-bag-bans. My takeaways:

– It surprised me how global the movement to limit use of plastic bags has become.

– Like Doris, I think that this could be the moment for biodegradable bags to make their entree. However, the process of introducing them will likely lead to some consumer confusion and problems at recycling facilities.

 

US sustainable and responsible investing on the rise

Investors are paying more attention to factors other than just future profits when they place their money with investment houses. The US SIF’s new report finds that sustainable and responsible investing (SRI) accounted for 11.23% of all assets under professional management in the USA at end 2011 (see http://www.ussif.org/resources/pubs/trends/). That means that $3.73 trillion out of a total of $33.3 trillion is in SRI.

But perhaps the most significant finding is that the total of SRI has grew by 22% in the two years from 2009.

This is encouraging news. The more investors turn their focus away from short-term profit and loss and towards longer term sustainable growth, the more CEOs and company boards will take notice. Let’s hope for an ever increasing share of total assets going to SRI.