Sustainability Identified by Chemical Industry as Key Competitive Differentiator

A survey released today by CSC (NYSE:CSC) and Chemical Week magazine found that sustainable business practices are having a larger impact than ever on the chemical industry. The survey interviewed senior sustainability executives at more than 200 leading global chemical companies to identify top initiatives.

Major trends identified by the survey show that there is a significant change from those conducted by the two organizations in previous years. In 2009, there was a clear focus on the Regulatory Compliance agenda, driven by new global government regulations (Reach, MRR). In 2010, results show that although Regulatory Compliance is important, most companies are now driving a much broader sustainability agenda in response to climate change and the concern for the environment.

In addition, many are now leveraging Sustainability as a top business initiative to drive growth and reduce costs. The leaders are implementing transformational programs including reengineered business models, processes, and systems. Formal Sustainability Performance Management programs and systems are being implemented at both the corporate and plant levels to proactively measure and better understand how carbon and water are being utilized. Many are also setting aggressive targets to reduce carbon and water in the product development cycle and throughout the supply chain.

An overwhelming 90 percent of respondents indicated that sustainable supplier considerations are influencing their customers’ sourcing decisions. All see this as an opportunity to drive new revenues.

"We are seeing a significant shift in the industry to reinvent the corporate sustainability agenda as a major driver of innovation,” said Chuck Deise, vice president and chemical sector lead, CSC. "Leading companies are doing this by developing more eco-friendly products to differentiate the brand which improves top line, and reducing carbon emissions and energy to enhance the bottom line. Sustainability practices not only positively impact the environment and an organization’s public perception; they can create quantifiable competitive advantages. Reengineering the Sustainability agenda, business processes and the underlying systems is a major opportunity for companies today and CSC brings proven business accelerators and industry leading Managed Services to help them.”

"Dow historically had wanted to be a leader in environmental performance to ensure its right to operate,” said David Kepler, II, chief sustainability officer, Dow Chemical. "We had always looked at safety of our employees as a priority. Now we have discussions into the business strategy for megatrends such as sustainable energy supply, human health, housing, and water in the emerging world.”

"Sustainability in our industry for the moment seems to be focused very much on carbon management,” said Sylvain Lhôte, EU and sustainability affairs/strategy and group development for Borealis. "It’s not just carbon management, or energy management – it’s about how we can minimize the environmental and social impact while maximizing the financial contributions we can make.”

Key Survey Highlights

Greenhouse Gas (GHG), Carbon Footprint, Product-Level Carbon Content Measurement

Respondents were polled about greenhouse gas emissions, Carbon footprint, and other environmental measurements such as product level carbon content across their businesses. Over the next two years, most believe there will be a significant shift in GHG and Carbon footprint reporting, with enterprise-wide adoption of formal methods and tools for reporting. These will be focused on helping companies measure, better understand and mitigate carbon throughout the supply chain.

Product Stewardship

The survey also polled companies’ ability to achieve and maintain compliance with global product stewardship requirements. More than 50 percent of respondents indicate full compliance with global product stewardship requirements, but more than 60 percent of that segment admits that they will need enhanced processes and systems to meet these criteria going forward. Product stewardship business models varied, with almost 50 percent staffing the function internally at the corporate or regional level, 25 percent outsourcing it, and 24 percent handling it on a sub-optimal, facility-based model.

The concept of product stewardship as a key and necessary component of an overall product lifecycle management (PLM) program was validated strongly by survey results, with 56 percent rating it as highly important to their research and development formulation. These results provide a strong argument for the need for business process re-engineering within most environmental health and safety (EH&S) and R&D organizations, because product stewardship is nearly universally originated in the EH&S function and formulated by R&D. These functions are predominantly separate within the enterprise.

REACH

Questions about REACH requirements produced interesting results, especially when considering that more than 75 percent of participating companies have never undergone an inspection for this well-documented measurement standard. Despite this, survey results show that the industry, in general, is well-prepared for the first compliance phase of REACH. Supply chain communications about REACH compliance, though, needs more focus, as more than 70 percent indicated a need to increase customer communications and nearly 40 percent needing increase supplier communication. Overall, there is a general consensus that these increased communication needs are not being supported with the appropriate technology in the near-term, indicating that companies are investing in other areas of the business.

Chemical Facility Anti-Terrorism Standards (CFATS)

Results indicate more than half of the companies surveyed have CFATS sites, and nearly all of those sites are ready or will be ready for Department of Homeland Security (DHS) inspections. However, actual preparation is lacking, with less than half having completed their cybersecurity assessments and 60 percent without a complete set of defined assessment standards.

Methodology

The CSC/Chemical Week survey was conducted during September of 2010. For complete results of the survey, visit www.csc.com/2010sustainabilitysurvey.

About Chemical Week

Chemical Week is the world's leading source of news and analysis for key professionals concerned with the chemical, petrochemical, specialty chemicals and related industries. Chemical Week information is available face-to-face, daily, weekly and 24/7 via our websites, online buyers' guides and custom publications. Chemical Week is part of Chemical Business Media, the world's leading provider of technical and business information to the chemical and process industries who use chemicals to make everyday products.

About CSC

CSC is a global leader in providing technology-enabled solutions and services through three primary lines of business. These include Business Solutions & Services, the Managed Services Sector and the North American Public Sector. CSC’s advanced capabilities include system design and integration, information technology and business process outsourcing, applications software development, Web and application hosting, mission support and management consulting. The company has been recognized as a leader in the industry, including being named by FORTUNE Magazine as one of the World’s Most Admired Companies for Information Technology Services (2010). Headquartered in Falls Church, Va., CSC has approximately 95,000 employees and reported revenue of $16.2 billion for the 12 months ended July 2, 2010. For more information, visit the company’s website at www.csc.com.