Dutch chemicals giant AkzoNobel is developing a host of ecological products, and says it’s more than just image
Mention of chemicals companies often conjures up images of chimneys belching out dirty brown smoke and toxic gases that waft across nearby towns and villages. AkzoNobel wants to change this.
The Dutch firm, which became the world’s largest coatings company last year when it bought the UK paints and chemicals giant ICI, is embracing water reduction, waste management and energy efficiency schemes to cut its environmental impact.
André Veneman, AkzoNobel’s director of sustainability, estimates that the company now saves about €200m a year having cut its energy use by about 20%. “It’s not cool to be green, but it’s a business opportunity,” he says.
Smaller companies are struggling to meet mandatory hazardous chemicals standards, says Erik van Dam, a partner at Dutch sustainability consultancy Triple Value Strategy. But he says larger firms, such as AkzoNobel and DSM in the Netherlands, have already shifted to more advanced targets than the European Union’s Registration, Evaluation and Authorisation of Chemicals (Reach) regulations. The law requires manufacturers to register safety information about chemical substances with a European agency, and replace hazardous chemicals with safer alternatives as they become available.
AkzoNobel wants to turn this compliance risk to its advantage. Each time a rival introduces a new eco-friendly product, AkzoNobel is committed to readjust its product line to become more environmentally competitive, the company says. Its range of Eco-Premium products is externally audited, based on delivering ecological benefits compared with rivals’ counterparts.
AkzoNobel, which reported revenue of €14.4bn for 2007, aims to further develop its green product portfolio, despite the economic crisis. It intends to secure 30% of its revenues from these green products, which range from coatings to detergents, by 2015 – up from 18% in 2007. The company expects to have improved this percentage in 2008 and will continue to increase the pace of improvement this year, Veneman says.
Veneman highlights one coating designed to stop marine life from clinging to the hulls of ships, allowing a hull to glide smoothly through the water. As a result, AkzoNobel estimates that ship owners can save between 5% and 7% on fuel or on average €2.5m per container ship over five years. The coating combines energy efficiency and cost savings, says Malcolm Hutton, a consultant at Environmental Resources Management, who has worked with the chemical sector. But leading chemicals firms often fail to communicate ecological advances like these either inside or outside the company, he says, despite their business benefits.
One reason for this may be low public awareness of the science behind the products that chemicals companies make. Activists are also quick to stir up controversy about the sector, which could make companies reluctant to publicise their environmental programmes. AkzoNobel, for example, has found that its efforts to green products do not wash with Greenpeace.
Kim Schoppink, a Greenpeace activist based in the Netherlands, who campaigns against toxic waste, argues that many of AkzoNobel’s products are based on environmentally unfriendly chlorine, causing pollution during its whole lifecycle.
Schoppink believes chemical companies should stop producing toxic chemicals, even if their impact is not fully understood or recognised yet. She says the chemical industry also needs to further cut its energy use and could help other business sectors to slash energy use as well.
AkzoNobel acknowledges that it has further to go to embed understanding of sustainability across the business. Aside from cutting energy use and developing green products, the company is starting to engage employees on these issues. The company has a good record of training its 60,000 staff on health and safety, but not yet on sustainability awareness-raising.
To engage employees, the company appoints sustainability champions and holds awards for sustainability projects from logistics through to packaging. This year the company has 80 candidates worldwide. AkzoNobel also plans to send top employees to the Antarctic this year to become sustainability “ambassadors” within the company. The impact of such initiatives is debatable, however.
This year AkzoNobel plans to plant its broader sustainability initiatives deeper in the shop floor, into sourcing, research and development and sales teams. This means involving everybody along the value chain from the suppliers of raw materials through to customers, Veneman says. The job of painting the company green has only just begun.
- Green, or “eco-efficient” products currently account for 18% of total sales.
- The aim is for green products to account for 30% of total sales by 2015.
- 73% of worldwide power consumption comes from zero and low-carbon sources.
- 37% of the electricity in production is based on hydropower.