Corporate Detox: DuPont's Sustainability History
If you think that corporate sustainability is all rainbows and unicorns, think again. CSR can be a messy business, especially for companies which historically are linked with toxic chemicals. Yet, these are the very companies which should --- and must--- pursue active CSR strategies to avoid the wrath of regulators and the public. With this in mind, I thought that DuPont's sustainability strategy would be an interesting way to kick off this series.
Look up DuPont's business profile on Google Finance and you will see that it "operates a range of products and services for markets, including agriculture and food, building and construction, electronics and communications, general industrial, and transportation" and "is organized in six segments: Agriculture & Nutrition, Coatings & Color Technologies, Electronic & Communication Technologies, Performance Materials, Safety & Protection and Pharmaceuticals." If you didn't know already, you might look at this and suspect that toxicity is a concern for the company. You'd be right.
As Dawn Rittenhouse, Director of Sustainable Development at DuPont, explained to me, the company's sustainability history has been shaped by a series of events. She traces DuPont's journey back to 1962, when Rachel Carson published Silent Spring, the famous book about the effects of fertilizer on the environment and humans. The book was so influential that it is credited with moving the U.S. government to establish the EPA in the 1970s. By the late 1980's, several years after toxic gas leaked from a Union Carbide Plant and killed 15,000 people in the Indian city of Bhopal, the EPA launched the Toxic Release Inventory, which required companies like DuPont to report on exactly what it sounds like they would have to report on.
"A lot of places you like to be number one, but polluter is not it," explained Ms. Rittenhouse. While Bhopal wasn't the company's fault (Union Carbide was at the time stand-alone and has since been acquired by Dow), the new Toxic Release Inventory unleashed new problems for DuPont. At the time, the company was the largest producer of chlorofluorocarbons (CFCs are man-made compounds that are good for making coolants but are bad for the ozone layer) and was under constant pressure from Greenpeace. The company responded by focusing its R&D on alternatives to CFCs and by 1989 Dupont announced its first sustainability goals, in Ms. Rittenhouse's words "a 90% reduction of air carcinogens, a 70% reduction of air toxics, some energy goals, and a couple of years later a greenhouse gas emission reduction goal". Then, in 1999, based on input from NGOs and socially responsible investors, new leadership expanded the company's focus from footprint reductions to climate change and started to use the catch-phrase "sustainable growth."
Somewhat counter-intuitively, this sustainable growth ended up involving some downsizing. In 2004, the company sold off its fibers businesses (nylon, polyester, and lycra), leading to a 25% reduction in the size of the company. The divestment allowed the company to focus its strategy on things like biotech and agriculture but in the process rendered the company's pre-2004 goals useless, forcing the company to re-set its 2010 goals to a 2004 baseline. But while the company was shifting its focus to new, more sustainable businesses, the company also had to wrestle with serious accusations that it had hidden research that chemicals used in the manufacturing of Teflon were toxic. Only a year later, DuPont settled a class action lawsuit relating to contamination of drinking water in Ohio and West Virginia after the EPA stated that low-level exposure to an acid used to make Teflon could pose a risk of causing developmental and other adverse effects.
Five years later, the tarnish from the Teflon controversy has not completely come off, but the company is not letting this become a sticking point. DuPont's website now boasts a new set of sustainability goals, listed below. In my next post, I will explore DuPont's current sustainability goals and positioning, but before I get there, I will give readers a few days to weigh in with their thoughts and interpretations.