In May, The Dow Chemical Company dedicated its latest environmental achievement - an $800 million expansion of a manufacturing site in Fort Saskatchewan, Alberta, Canada. Dow considers the new fractionator, ethylene plant, and expanded polyethylene plant simply the best plants the company has ever built. They use raw materials and energy efficiently, while minimizing pollution. At Dow, we call it "building for the twenty-first century." These plants exemplify the type of growth that is essential to achieving long-term sustainability. Designing facilities for environmental performance is the right thing to do - for more than one reason. Pollution is a measure of waste and inefficiency; reengineering to eliminate pollution enables us to make more product at less expense. Reducing pollution and increasing efficiency means we will be more competitive. We are investing, and building value, for the long term.
The idea of pollution prevention has been around for decades. In its infancy, the concept meant reducing wastes discarded into the environment, with their associated costs. Today, the basic tenets of pollution prevention are the building blocks of sustainable development.
Considering these issues before breaking ground at Fort Saskatchewan has helped ensure that our investment will pay off today and tomorrow. For example, a new design concept prevents the hydrocarbons plant from sending any process water to the nearby river. The new ethylene plant is also 20 percent more energy efficient than the last ethylene plant we built. This is the essence of resource productivity - using fewer resources to meet higher product demand faster, cheaper, and better.
We see three benefits to resource productivity. First, there is value to the environment from reducing our dependence on natural resources. Second, business sees an economic payoff from making more with less and enhancing competitiveness. Third, our plants' neighbors also enjoy better jobs, a higher quality of life, and a thriving community.
"Building for the twenty-first century" does not mean growth for growth's sake. However, growth in step with resource productivity and accountability is essential to supporting a rapidly increasing population. We simply cannot support exponential human growth and consumption without industrial growth. What we can do is engineer industrial growth to meet human needs for quality of life and to use natural resources more wisely and efficiently.
This is a challenging assignment. Industry can play a significant role, but we cannot succeed alone; the responsibility for sustainable development must be shared. While there are countless issues related to sustainability, three top priorities for business are:
What is industry's role and responsibility?
How can business work with other sectors on common goals?
Is there a national sustainable development strategy?
INDUSTRY'S ROLE IN SUSTAINABILITY
Business's ultimate role in sustainable development is to complement and advance the broader goals set by society. More and more, industry is presented with the opportunity to protect the environment and ensure a better standard of living for future generations. There are seven steps businesses must take in the journey toward sustainability:
Embrace Change
Before individual employees and businesses can contribute to sustainability, they must understand its three components: economic growth, environmental protection, and social well-being. Integrating these three components into a business strategy requires a fundamental change in thinking. Industry - and all sectors of society - must shift from an old paradigm of independence to a new paradigm of interdependence.
In recent decades, different sectors of society have tended to thrive on independence and contention. Each group leveraged its respective areas of expertise: industry manufactured, government legislated and regulated, and the environmental community set out to protect the environment.
Interdependence, in contrast, signifies dialogue, consensus-building, and cooperation. For example, responsible members of industry consider the environmental and social impacts associated with manufacturing and transportation. Government can more effectively legislate and regulate by consulting with industry and the environmental community about obstacles and incentives to progress.
Foster a New Corporate Culture
Once we accept the new paradigm, the challenge is to take action and lead cultural change within each organization. Imperative to the process is the integration of environmental and business decision-making. We cannot make decisions about either the environment or our businesses in a vacuum. Today, managers must consider the environmental and social impact of business decisions as well as the economic impact of environmental investments.
Initiate Voluntary Action
It is widely accepted that the current style of regulation and legislation in the United States cannot lead us toward sustainability. We need to pursue alternative approaches to setting goals and achieving ever-higher levels of excellence. Why? Because it doesn't make economic sense to follow the command-and-control path.
This translates into strong economic incentives for business to voluntarily prevent pollution. We will always need laws and regulations to set overarching performance- based goals and targets. However, market and economic incentives better speak business's language. If we listen, we can indeed uncover significant profit opportunities in pollution prevention.
Design for Eco-Efficiency
The key to success is often strategy. We can design not only for the environment, but also for economic advantage and social equity, for "eco-efficiency." Doing so requires careful consideration of the entire life cycle of a product, from raw materials through manufacturing to final waste products after use. It calls for an evaluation of both process design, which focuses on the "how" of manufacturing, and product design, which looks at the "what" of manufacturing.
Eco-efficiency looks at the total amounts of raw materials, energy, fuels, or utilities consumed during a product's life cycle. The goal is to identify the parts of the process that have the highest resource intensity, and then redesign the product to yield significant energy savings.
For example, closed-loop systems - such as at Dow's Fort Saskatchewan plant - can ease a plant's dependence on local river water. Manufacturing scrap can be collected and reused to avoid sending waste to the local landfill. There are myriad opportunities.
Eco-efficiency also requires that we consider a product's function rather than just the product itself; for example, we must look at insulation rather than foams, heat transfer rather than glycols, and food preservation rather than polyethylene film. The concept also challenges the traditional sense of entrepreneurial autonomy. In lieu of "buyer beware," eco-efficiency asks both the producer and the consumer to accept a shared responsibility for product value and functionality.
Dow's external environmental advisory council first broached this issue in our company about two years ago. This group of 10 world policy leaders and environmental experts, who advise us on issues that affect Dow's global businesses, suggested that we add to our product research a screen to judge a product's potential worth: not whether the product would sell, but whether it should be sold for a particular application.
Eco-efficiency ultimately examines the value a product offers to customers and to society.
Seek Opportunities for Growth
Business opportunities often lie disguised as environmental challenges. Shrewd executives will watch for changes in individual and societal needs for environmental quality as we work toward sustainability. Market opportunities will unfold, and industry will be called upon to provide eco-efficient goods and services.
An example of a growth opportunity that complements the goals of sustainability is Dow's newest business platform, called Dow Environmental. This business was launched in 1994 to offer environmental systems and services to the global marketplace. One Dow Environmental service is Strategic Chemical Management (SCM), which leverages Dow's expertise in chemical handling, storage, use, and disposal.
Likely customers for this business are large manufacturers who use a lot of chemicals but whose primary expertise is not handling or managing the chemicals to reduce environmental impact. Because society today places a value on such a service, the new business has a good chance of success.
Invest in Creativity
Technology is the most obvious contribution industry can make to sustainable development. Innovation is the foundation of the world's most successful corporations. Few argue that business must lead the creation of cleaner technologies, more efficient processes, and alternative, eco-efficient products.
Industry's responsibility is to fulfill this expectation. The marketplace offers powerful incentives for businesses to invest resources in continuous process and product improvements. Each company also must accept a responsibility to seek alternative technologies that draw upon fewer resources, maximize efficiencies, and create less waste.
Reward Employee Action
A company is only as strong as its people. A strong environmental ethic takes root first among employees, then branches into business strategies and corporate culture. Businesses must encourage and reward employees who take the initiative to protect the environment - whether on or off the job. If employees see that such action is valued, it will spread beyond a small core to a broader base.
Environmentalism is local. Manufacturing sites often attract local people with a vested interest in the region's economic, environmental, and social well-being. Substantive change happens when these employees act upon their values and take on the role of champions. If given support and recognition, they can go far to change a company's culture.
REACHING OUT
Let's say a company does all of the foregoing. Do these tasks fulfill all of industry's obligations to support progress toward sustainability? Of course, the answer is no.
The responsibilities described so far deal with internal change, structure, or resource allocation. The external component is equally important. Companies must step outside their fencelines and establish dialogue with external stakeholders. There are several ways to build dialogue and seek outside opinions on a local and national level.
Community Advisory Panels
First, companies must establish and maintain good working relationships with host communities. After all, businesses depend on civic leaders and local citizens to grant the operating permits - both official and implied - that allow them to make products year after year. Community advisory panels (CAPs) are a good way for businesses to establish dialogue among local citizens. Dow's CAPs meet regularly to discuss local issues of concern or importance, ranging from job security and economic growth to environmental, health, and safety issues. These panels present a good opportunity to broach the subject of sustainability in the community.
Community outreach is a key component of Responsible Care, a chemical industry initiative to improve the way we handle, transport, and dispose of chemicals. Responsible Care requires companies to adopt a tough set of environmental, health, and safety standards. Dow has committed to implement the Responsible Care codes of management practices globally by 1997.
Outside Expertise
Companies also should seek outside advice on broader corporate issues. For example, Dow's external environmental advisory council advises us on issues that affect our businesses. So far, they have offered valuable counsel on business strategies related to chlorine, plastics, and agricultural chemicals. They also challenge the company to higher levels of performance.
Public Reporting
Another vehicle for national, possible international, outreach is a public environmental report. These reports make it easier to reach key stakeholders - such as employees, the media, investors, the environmental community, and government - with candid information about performance. It is up to industry to tell the whole story, the bad with the good. Some innovative companies also are starting to report progress toward indicators of sustainability.
Of course, these indicators have not been defined with any consistency to date. Company- to-company comparisons are quite difficult to make without setting up an index to account for differences in data collection or nuances in reporting style.
A NATIONAL STRATEGY
Even if industry succeeds in both internalizing the concepts of sustainability and reaching out to the public, there is still a missing link: an overarching national and international strategy. Industry cannot succeed alone; communities and countries must help set a guiding vision and a course of action. Then, industry efforts can fit as one significant part of a well-developed whole.
Formulating a national sustainable development strategy is the task of the President's Council on Sustainable Development, formed two years ago by President Clinton, and on which I serve. The Council brings together 25 leaders from government, business, and the environmental community to craft a national strategy for sustainable development. This is the first time that such a diverse group has come together to address these national issues and find common ground.
Cooperation and consensus won't happen overnight, but the President's Council on Sustainable Development is a giant step in the right direction. Dialogue is much more constructive than treating each other as adversaries. If we can find a few common areas on which to agree, then perhaps we can set aside other differences to make progress toward the greater goals of sustainability.
The group is developing policy recommendations for the President that focus on integrating economic, environmental, and social issues. It is mandatory that we be successful on all three fronts, not trade off one against the other. Some recommendations will focus on:
Energy. Sustainable development cannot happen without substantive changes in the way we consume energy.
Economic policy. One idea is to shift the current tax mechanism from taxes on capital and income to taxes based on consumption. This is a controversial issue. The system would need to be revenue neutral. The Council also is looking at market mechanisms such as permits and full-cost accounting.
Regulatory reform. The Council will probably propose changes to the regulatory system in two parts: first, regulations to set goals that guide plants' overall performance; and second, flexibility to allow industry to choose the most cost-effective manner in which to meet those prescribed goals. We believe that such a system offers greater overall performance at a much lower cost.
Community action. A series of recommendations will center on making sustainable development a community-based activity. Communities seem far better equipped than the federal government to tackle the issues of economy, environment, and social well-being.
It is one thing to bring together diverse interests and discuss issues of importance to the economy, the environment, and society at large. It is more challenging to reach consensus among stakeholders on a course of action for addressing these weighty issues. The success of the Council's recommendations hinges on individual willingness to accept responsibility for change.
For the strategy of the President's Council on Sustainable Development to work, the federal government also must embrace change. Significant and systemic changes are needed in the way federal environmental goals and guidelines lead industry's action.
To succeed, sustainable development must be a part of a company's way of thinking. It must become as automatic in corporate thinking and corporate culture as diversity is now becoming. It builds on the insight that environmental improvements also have business value. Sustainable development must become a part of everyday thinking and everyday operations. It will not work as an afterthought.
Society is witnessing an evolution that will change the way we look at once-polarized issues. It's a fundamental shift from an "us-versus-them" to a "let's talk about it" attitude. When we talk about sustainability, we must bring all the stakeholders together: government, the environmental community, local communities, and industry. If we continue on as before, we will keep hearing about environmental problems - not solutions.
The ideas expressed here - internalizing the concepts of sustainability, consistently reaching out to the public, and helping to build a national dialogue and strategy - add up to a significant shift in industry's role. Building the new culture is not going to be easy. But if we can accomplish these things, I'm confident we will advance on the path toward sustainable development.
Sustainable development requires a commitment from everyone, working together globally and acting locally. I think we have a promising future.
Reprinted with permission from 
