Sustainability in chemical industry-asn_tcl r1
•Download as PPTX, PDF•
7 likes•4,729 views
The document discusses sustainability in the chemical industry. It defines sustainability and outlines its benefits. The chemical industry impacts sustainability due to its large energy usage and emissions. Chemical companies are pursuing various sustainability initiatives to reduce costs, drive innovation, and improve their brand. Implementing sustainability strategies can benefit companies financially but also presents challenges like cross-company coordination. Sustainability reporting and consulting are growing areas to help companies with their strategies and measure their progress.
Recommended
More Related Content
What's hot
What's hot (20)
Similar to Sustainability in chemical industry-asn_tcl r1
Similar to Sustainability in chemical industry-asn_tcl r1 (20)
Recently uploaded
Recently uploaded (20)
Sustainability in chemical industry-asn_tcl r1
- 1. Sustainability in Chemical Industry Aaloak Singh Negi PGPM710_01
- 2. Industry Mentors Mr. S G Choudhary (Chief Sustainability & Technology Officer) Tata Chemicals Ltd.
- 4. The Five sustainability principles
- 8. The Triple Bottom line “SUSTAINABILITY” is a path forward that allows humanity to meet current environmental, economic, and societal needs without compromising the progress and success of future generations. Sustainability in chemical industry: Grand Challenges and research needs National Academy of Sciences The Triple Bottom Line, Savitz AW, Weber K, 2006, First Edition
- 9. …Need for sustainability 6.7 billion people on earth 1.9 billion are living in abject poverty 975 million people are malnourished 865,000 deaths per year worldwide directly attributed to outdoor air pollution (WHO) 1.5 million deaths per year result from unsafe water, inadequate sanitation or hygiene Non renewable energy sources are fast depleting Population & poverty data : World Bank, August 2008
- 10. Oil Prices per Barrel, 1985 – 2011 Years Until Resource Depletion* 86.84 37 61.06 28 $/Barrel Years 21 26.72 27.58 26.00 17 19.55 1985 1990 1995 2000 2005 2011 Copper Lead Silver Tin Source: Fast Company. Source: inflationdata.com The Reality of a Resource-Constrained World …less well known is the rapid depletionof a broader set of natural resources While skyrocketing oil prices are a well-known reality for all companies… *Resource depletion is defined as the complete exhaustion of the resources existing in nature. Calculation assumes that current consumption levels are maintained.
- 11. ..Benefits of pursuing Sustainability for organizations Reduce energy, waste and cost Differentiate yourself Sidestep future regulations Create Innovative new products or processes Open New markets Attract and retain talent Improved Image Reduce legal risk Provide a higher quality of life The business guide to sustainability, Hitchcock D, Willard M, First south Asian edition, 2008
- 12. Financial Returns from a Sustainability Strategy Carbon leaders surpassed the financial performance of carbon laggards by an annualized rate of return of 3.06%. With the notable exception of Asia, companies successful in minimizing their carbon emissions experience a 10 – 30% improved performance in shareholder returns Source: Innovest Strategic Value Advisors, Carbon Beta and Equity Performance, 2007.
- 13. 41% Where have you seen the greatest benefit from your sustainability investments? 23% 18% 6% 6% 6% Energy Savings Waste Savings Product Innovation Corporate Branding Raw Materials Savings Water Savings n=17. Investment Expectations & Returns Effectiveness of Sustainability Investments Continued pressure for near-term payback on sustainability investments suggests energy efficiency projects should be a core component of early sustainability investments Source: Corporate Executive Board Research, Survey for Corporate Sustainability Executives, 2007.
- 14. Sustainability Impacton Employee Motivation Sustainability Impacton Employee Productivity Impact of Sustainability on MBA Job Decisions $5500 80% 70% 76.9% 1% Percentage of Respondents Willing to Forego Income to Work for a Firm with a Credible Sustainability Strategy Average Annual Income They Would Forego Committed to Sustainability Values NotCommitted to Sustainability Values Employees Who Felt Greater Motivation and Loyalty toward Company Due to Sustainability Initiatives Indirect Returns from Sustainability Investments Sustainability strategies serveas a recruiting draw for top talent… …and improve productivityand loyalty of existing employees Source: Stanford Graduate School of Business, Survey of 800 MBAs from 11 Top International Business Schools. Source: 2002 GlobeScan International Survey, MORI.
- 15. ….If you don’t Liability of pollutants Supply problems with raw materials and energy Attacks on your image Legal risks Bad mouthing of your product Being closed out of certain markets The Bhopal Tragedy :case in point The business guide to sustainability, Hitchcock D, Willard M, First south Asian edition, 2008
- 16. Global Reporting Initiative The Global Reporting Initiative (GRI) is a network-based organization that pioneered the world’s most widely used sustainability reporting framework GRI’s core goals include the mainstreaming of disclosure on environmental, social and governance performance The Reporting Framework sets out the principles and Performance Indicators that organizations can use to measure and report their economic, environmental, and social performance Sustainability reports based on the GRI Framework can be used to demonstrate organizational commitment to sustainable development, to compare organizational performance over time, and to measure organizational performance with respect to laws, norms, standards and voluntary initiatives.
- 18. Proportionality
- 19. Flexibility
- 20. Reversibility
- 21. Competitive NeutralityAIChE sustainability Index, Dow Jones Sustainability Index, Standard and Poor Ethibel Sustainability Index provide auditable frameworks and metrics A Roadmap to Sustainability: Indian Industry Case Study, Mr. Sanjay Choudhary, CTO, Tata Chemicals Limited, Third Annual India Chemical Industry Outlook Conference, Growth and sustainability in Chemical Industry- Post Recession 17-18 Feb 2010 Mumbai
- 22. Companies following sustainability Dow Jones Sustainability Group Index: percent of eligible companies in index
- 26. Polymers
- 27. Explosives
- 28. The chemical industry converts raw materials (oil, natural gas, air, water, metals, and minerals) into more than 70,000 different products
- 30. The chemicals industry is a significant user of coal, petroleum products and natural gas, both as a source of energy and as feedstocks for many of its products.
- 31. Chemical industry’s products, processes and research capabilities contribute to conserving energy, delivering energy more efficiently, developing renewable resources and reducing greenhouse gas (GHG) emissions.
- 32. Significant improvements achieved in energy efficiency over the past decades - production increased by more than 50% since 1990 & GHG emissions have fallen by more than 20%, mainly by switching from coal to gas powered facilities and in investing in combined heat and power (CHP) plantsA Roadmap to Sustainability: Indian Industry Case Study, Mr. Sanjay Choudhary, CTO, Tata Chemicals Limited, Third Annual India Chemical Industry Outlook Conference, Growth and sustainability in Chemical Industry- Post Recession 17-18 Feb 2010 Mumbai
- 33. Sustainability in chemical industry Value chain positioning and profitability. Courtesy: Accenture and American Chemical Council white paper on sustainability in chemical industry, 2010
- 34. Sustainability accomplishments Sources: 2009 ACC survey of 27 companies’ sustainability practices; Accenture Analysis
- 36. Reporting areas
- 37. Driving and measuringprogress Sustainability governance Engaging customers Partnering with organizations and institutes Engaging the organization’s employees
- 40. Sustainability initiatives by Chemical companies Energy Use Revenues from Non- Depletable Resource Environmentally Smart Market Opportunities from R&D Effort Products that Reduce Greenhouse Gas Emissions Products that Protect People Water Conservation Fleet Fuel Efficiency Community outreach Education Commitment
- 41. Sustainability initiatives by Chemical companies Care for the community Inclusion Alternative fuels Clean development Energy Efficiency Green Products Resource Optimisation Habitat conservation Water resources Eco-impact
- 42. Sustainability initiatives by Chemical companies Developing sustainable communities Ensuring safety and promoting health Nurturing people , Fostering Talent Conserving Water Managing Energy Efficiently Consuming Resources Responsibly Responsible Governance
- 43. Challenges in chemical industry Courtesy: Sustainability in the Chemical Industry: Grand Challenges and Research Needs - A Workshop Report National Academy of Sciences
- 44. Hurdles to Effective Implementation of Sustainability Initiatives What is the most difficult task in building and executinga sustainability strategy at your company? 26% 16% 16% 11% 11% 10% 10% 0% 0% Cross-Silo Coordination Goal Setting Internal Education Strategy Development Current Footprint Analysis Risk/Opportunity Assessment Business Case Development Communication/Reporting New Market Identification Hurdles to Achieving Business Impact Cross-silo coordination proves to be the greatest hurdle for sustainability initiatives n=19. Source: Corporate Executive Board Research, Survey of Corporate Sustainability Executives, 2007.
- 45. Centralization of Sustainability Activities Are the following sustainability initiatives centralizedor decentralized within your organization? 70% 70% 67% 52% 48% 33% 30% 30% Supplier Compliance Communication/Reporting Identification of Cost Savings or Revenue Opportunities Strategy Development n=27. Ownership of Sustainability Responsibilities Despite the cross-functional nature of sustainability issues, most tasks are centralized within the firm CentralizedDecentralized Source: Corporate Executive Board Research, Survey of Sustainability Executives, 2007.
- 46. Frequency and Effectiveness 36% More than 67% of firms that house sustainability initiatives in the CEO’s office see that home as highly effective, perhaps due to the importance of cross-silo coordination to ensure success. Effectiveness Ineffective Moderately Effective Highly Effective Frequency 16% 11% 7% 7% 7% 7% 2% 2% 2% 2% EH&S Supply Chain Real Estate Legal CEO’s Office CTO Decentralized in BUs Corporate Responsibility Officer Corporate Strategy Office Cross-Functional Task Force Corporate Communications Organizational Home of Sustainability Initiatives Sustainability initiatives are most effective when housed in the CEO’s office n=44. Source: Corporate Executive Board Research, Survey of Corporate Sustainability Executives, 2007.
- 47. The Sustainability Portfolio What needs to be done, when and where? Beyond Greening: Strategies for a sustainable world, Stuart L. Hart
- 48. The five sustainability principles Growth: Go where the money is Profitability: Align cost reduction with sustainability action Positioning for the future: Build intangible assets Longevity: Ensure relevance in a sustainability-conscious world Consistency: Win the loyalty of consumers and employees RECOMMENDS Accenture and American Chemical Council white paper on sustainability in chemical industry, 2010
- 49. Sustainability Spending Sustainability spending is will grow at a CAGR of 15% globally from US $67.3 billion 2010 to US $140.2 billion in 2014 Source: Verdantix Ltd., UK
- 50. Sustainable Business Consulting Spend Figures in billion US $ Sustainable business consulting spend will grow at a CAGR of 13% globally from US $17 billion 2010 to US $ 28 billion in 2014
- 52. Mckinsey
- 53. Bain & Co.
- 54. Booz Allen Hamilton
- 55. AT Kearny
- 57. Ernst & YoungSolaron Sustainability Services Emergent Ventures Environment Resources Management SustainAbility BlueSky With the growing focus on sustainability many sustainability consulting firms have emerged. Also, the leading business consulting firms have their own sustainability practise
- 58. Conclusion Sustainability is a matter of survival not choice Chemical Industries are focused on Sustainability as a strategy Sustainability Consulting is here to stay and thrive
- 59. THANKS!
Editor's Notes
- Sustainability Guru JhonElkington’s “Triple Bottom line”Elkington suggests that the businesses need to measure their success not only by traditional bottom line of financial performance (profits, ROI etc.), but also by their impact on broader economy, the environment, and on the society in which they operateThe Triple Bottom Line (TBL) captures the essence of sustainability by measuring the impact of an organization's activities on the worldA positive TBL reflects an increase in the company’s value, including both profitability and share holder value and its social, human, and environmental capital
- The population of world is increasing perpetually, however we need to realize that the resources on the mother earth are shrinking. Also, almost 30% of that population lives in abject poverty and don’t even have enough to eat. In face of such grave threats to the existence of the life itself on earth it is of utmost importance that we focus on Sustainable growth -> Successful Development.Successful development can imply many things, such as (though not limited to): An improvement in living standards and access to all basic needs such that a person has enough food, water, shelter, clothing, health, education, etc; A stable social & economic environment, with associated social and economic freedoms
- Better utilization of resources Sustainability initiatives can become differentiating factor from the completion Regulations are constantly changing. For those who want to get ahead of the curve, sustainability provides useful framework for understanding the ‘endgame’ By helping you to see the present world and future challenges, sustainability can help you develop new products or processes that can be part of the solution Many of employees want to work for companies that share their values. Sustainability can help infuse even mundane jobs, with meaning Sustainability can put organizations on the leading edge of a exciting and socially responsible trend. This can to build good will with public and shareholders. In order to manage risk, organizations must keep an eye on social and environmental practices. Sustainability helps organizations radically reduce those risks and avoid the overheads that go with them Sustainability helps communities make decisions that maximize the quality of life through ‘smart growth’ design principles
- 1 Carbon leaders and laggards are measured using Innovest’s Carbon Beta® rating system, which analyzes companies’ risk factors, carbon management quality, and strategic profit opportunities. The companies are rated on a 5 point scale that corresponds to traditional company ratings (AAA, AA, A, etc.). Carbon leaders are defined as companies that obtain a AAA, AA, A or BBB rating. Carbon laggards are defined as companies that obtain a BB or CCC rating.
- Threats if you don’t pursue sustainability If sustainability is not the focus, it can lead to penalization due to not conforming the effluent norms. Sustainability helps you to foresee potential future supply and demand problems Sustainability helps you to understand the expectation of all your stake holders. Many companies have been held responsible for actions that were legal at the time but later determined to be harmful Sustainability is driving market place in many countries. The EU has been very strict on this
- Practicality -Realistic , neither overestimate nor overstrain the capabilities or absorption capacityProportionality - Appraised on overall economic, technical, environmental criteria and social acceptability, the efforts in proportion to the desired result Flexibility-Goals and measures designed in such a way that they can be tailored to meet changes in requirementsReversibility - Able to retract certain goals or reversing individual instruments, if new facts come to light or if they produce unintended adverse effects Competitive Neutrality - Goals and instruments not to counter the principle of equal treatment nor, even more importantly, jeopardize equal opportunities in international competition and taken at the most appropriate level
- DEFINITION: Dow Jones Sustainability GroupIndex: percent of eligible companies in indexFor each country, the number of companies in the Sustainability Index was divided by the number of companies in the Global Index. It is interesting to note that in developed countrieslike USA the percentage of companies following the sustainability principle is as low as 20%. India and China are no where to be seen even in decimal %agesSOURCE: Assessment of the Country Allocation of the Dow Jones Sustainability Group Index, SAM Sustainability Group via ciesin.org
- Accenture has identified three distinct business models along the value chain within the chemicals and life scienceindustries. These business models highlight differences in approaches and strategies, and were used to analyze survey results and secondary research.Feedstock foundation companies produce the essential building blocks for “downstream players” in thechemicals industry and end markets. They are focused on adding value to feedstock— through smart locations(feedstock, growth), large scale and leading (process) technology.Chemicals platform companies can be characterized as a platform of businesses, technologies, capabilities,markets and products—loosely targeted at some mega trends (health, energy, housing, etc.). A portfolio of businessunits—with more or less independence—is actively managed for growth and synergy.Market makers typically are focused on selected (no chemical) end markets and technologies. They tend to havehigh growth with products that represent a limited share of customer cost and value chain. Market makers drive innovation based on understanding product performance and acting on pervasive end-market trends—not just customer inputs. They will make significant investment in brand and distribution.
- All respondents have implemented an oversight structure to help drive and govern sustainability initiatives. Overall, respondents feel that, as a result of the selected governance structure, their sustainability initiatives are well integrated with the business direction and strategyOpportunity area is to work with customers and extend the level of collaboration. Also to be noted thatthat customers are able to identify new markets for existing products.
- 1. From the year 2005–2025 of continued use of fossil fuels (especiallyoil) as the predominant source of energy and chemical feedstocks,where managing carbon, reducing the intense use of energy resources,and educational efforts to promote sustainability thinking will be critical;and2. The next 20–100 years (2025–2105) in which the use of fossil fuelswill be phased out, and where the ability to carry out green chemistry andengineering (built on fundamental understanding of the full life cycle impactsand toxicology of chemicals), and having access
- Steps to be taken internally today:-Pollution Prevention Where are the most significant waste and emission streams from our current operations?Can we lower costs and risks by eliminating waste at the source or by using it as useful input?Steps to be taken Externally today:-Product StewardshipWhat are the implications for product design and development if we assume responsibility for a product’s entire life cycleCan we build reputation and reputation and legitimacy by engaging a broader range of stake holders?Steps to be taken Internally for tomorrow:-Clean TechnologyIs the sustainability of our products limited by our existing competency base?Is there potential to realize major improvements through new and disruptive technology?Steps to be taken externally for tomorrow:-Base of the Pyramid Does or corporate vision direct us towards the solution of the most pressing social and environmental problems?Does our vision focus us on serving the unmet needs at the base of the economic pyramid?
- The growing market for sustainable products and services provides an area where companies can capture additional market share and attract investor attention. In fact, some companies are finding energy offerings to be their primary source of stabilizing growth. More firms are finding that initiatives that reduce environmental impact also reduce operating costs.
- The analysis is based on company financial data, sustainability maturity assessments, a comprehensive initiatives map and change drivers such as oil prices, carbon prices, innovation and risk factors