DSM used to be a coal mining company. Since then the company has changed a lot. When I joined DSM, 50% of the portfolio was petrochemicals. Now it is zero. Now I am working at a science-based company operating in the field of Nutrition, Health & Sustainable Living.
After all portfolio shifts, we have recently updated our strategy and I believe that the biggest transformation is yet to come. It is the transformation from a company with solid fundamentals in sustainability to fully purpose driven whilst having and maintaining good financial returns, going beyond the conventional wisdom that a company either predominantly focuses on profit or on doing good for society.
I would like to start with a strong “why” we are going to change further. As humanity, we face a combination of a lurking climate catastrophe, an unmanageable four-fold overclaim on earth’s resources and hundreds of millions of people being hungry or obese.
These are large and complex problems with no apparent silver bullet solution. The question is, how to go about them as a mid-sized multinational company?
First of all, we defined our playing field. We see that SDGs are "the agenda of the world" and we translated SDGs into our playing domains. We strive to address especially 5 of the SDGs in 3 domains: Nutrition & Health, Climate & Energy and Resources & Circularity. All our businesses and large innovations fall in these domains. Currently we are reaching 2.5 billion people worldwide using the vehicle called “Brighter Living Solutions”. Our purpose is to create brighter lives for all. Brighter Living Solutions” were defined to measure as a more effective solution. It comprises 65% of our portfolio and we strive to do more.
If we know where we are playing, the next question is, what we are we doing?
Firstly, we will improve the impact of our operations. We strongly believe western companies should be at the forefront, starting with ourselves. We have set the target to reduce 30% of our GHG emissions by 2030. Next to that, we set the target to use renewable energy for 50% of our purchased electricity by 2025, and 75% by 2030.
Secondly, we strive to enable our customers to deliver more sustainable solutions. A good example has been our pioneering platform for WB coating players called the “Waterborne China Platform (WBCP)” – an elaborate container association forming a broad coalition so that industry is not always relying on government actions or regulations to set the path.
Thirdly, we do believe in taking a strong position and working on relevant industry topics. Our advocacy takes many forms. One spearhead is promoting carbon pricing as a mechanism to reform legislation, fiscal systems and policies and as a good basis for investment decisions. According to World Bank, fossil fuels have $500 billion in direct price subsidies/year going predominantly to developing economies. It exceeds three-fold the full market value of PV installation in 2017.
Lastly, we will change the direction of the company by innovation into new and relevant areas. We have some business examples:
Each year billions of kilograms of carpet are wasted in a landfill. For 40 years, the combination of many materials, including latex adhesive, has made it both technically difficult and economically uninteresting to attempt to recover materials for re-use. DSM invented Niaga® Technology. It is a 100% recyclable carpet, produced with up to 90% less energy.
Another example is our solar business. We are saving 2300 kt of CO2 equivalent by with anti-reflective coating, anti-soiling coating and endurance back-sheets of 100% recyclable and 30% lower carbon footprint.
You have seen how DSM is becoming purpose led and performance driven - taking the lead in improving our own footprint, engage with customers and other stakeholders. Since we cannot do this alone, we will welcome leadership in our value chains, from governments, from regulators and from the finance world to take a leading position, especially in the west because the times call for more leaders to stop climate change.