Water, Water Everywhere for Dow Chemical
Water often takes a back seat to air in the sustainability debate, but it clearly runs deep in both the problems and the solutions. Existing supply needs to be conserved, while new resources need to be tapped.
Dow Chemical is the world's largest producer of water filtration membranes. It's water solutions business currently accounts for less than $1 billion of the company's $50 billion in revenue, but it is seen as a big opportunity. On a user level, the company has reduced its per-pound water consumption 35% since 1995.
It is no coincidence that clean drinking water figures into Dow’s 2015 Sustainability Goals, wherein the company has targeted three breakthroughs to help meet the major global challenges.
A desalinization plant using Dow membrane technology is being built in India and will come on line in 2008. A similar one is already in operation in Perth, Australia.
The company also bought a 30 percent stake in Water Health International, which is bringing ultraviolet disinfectant technology to villages there. Dow has also developed new plastic-based bio-sand filters -- the size of a garbage can -- that provide clean water for a family of four-five and is now be used in Ghana. In Bangladesh, Dow filters are being used to remove arsenic and other trace bacteria from the country's water system
In China, the company's OMEX Environmental Engineering unit -- acquired in 2006 --uses advanced membrane technology to remove contaminants. In Singapore, Dow is working with the national water agency on water reclamation technology.
William C. McNeill Jr., a 30-year Dow veteran and the executive charged with focusing on integrating sustainability into Dow’s business units, agreed to discuss water efforts in emerging markets.
Below are excepts of an interview first published late last year.
On a personal level what brought you to this role at Dow.
The goal I am particularly involved in is our "solve world challenges" goal. It is pretty ambitious. The goal is to create three breakthroughs that the world can use to solve major challenges, The first time I read it I said "What the heck are we doing here?" Then I thought some one with my breadth of experience in the company could make that happen more so than someone with less experience and less excitement.
The thing is there has to be a sense of reality. We are about making money. We have to find things we’re good at that can have an impact and not just focus on doing good. In the end corporations exist to bring a return on their investment.
How effective has that combination of doing good and making money been?
In the area of water, one the reasons we picked it was because we have a very good business in water. It’s a high tech business, business that generally gets the vast amount of its revenue out of the industrialized world. But as we can get the cost of those technologies down, these can go into developing countries and there’s quite a bit of opportunity there.
Describe the business and the market in India.
There are hundreds of thousands of small villages that have the opportunity to use a water treatment system. There’s a tremendous opportunity to grow. The challenge is how fast and how quickly can you grow. One of the challenges is capital these villages can access and borrow to buy these systems. These systems cost 25,000 to 50,000 a piece. So there has to be a capital source. There’s a big opportunity for private capital to come in and help the market grow.
We’re very excited about the opportunities. There are hundreds of thousands of small villages that have the opportunity to use a water treatment system. There’s a tremendous opportunity to grow. The challenge is how fast and how quickly can your grow. One of the challenges is capital these villages can access and borrow to buy these systems. These systems cost $25,000 to $50,000 a piece. So there has to be a capital source.
Why does water seem to be overlooked somewhat compared to other aspects of the green movement?
My personal opinion here -- the issues and solutions are so different in each geographical area. It also has a mixture of free money in it that makes it a little harder for industrial corporations to find a business model that makes sense, to attract private capital. You have a lot of government involvement. So it is a lot more fractured and the solutions are very local. We are finding areas where it is a good business. There are also some philanthropic things we’re doing in this business as well to raise awareness.
Part of the problem in the water space is there are so many people doing things. They go out there. They put in a well. They get their photo taken and disappear. No one maintains it.
More broadly, how did the 2015 sustainability goals come about?
We had a set of 10-year goals in 1995 — environmental health and safety goals involving leaks and spills, injury rates in factories, goals around our footprint. In 1995 when we put these goals in, the organization said "what? Why are we doing this?" We tracked them over ten years, using clear metrics, and you could see the clear results. We reduced our energy intensity, waste water, leaks and spills. As we got to the end of it, leadership said "what can we do now. What are our new goals?" We wanted to focus on not so much doing less harm but doing more good. What is the positive impact we can have? One of them was to try to focus the organization a little bit more on the developing world.
Of course, given that Dow is a chemical company, given its history, there are bound to be skeptics, those who say this is largely a PR effort. How do you answer them?
I’m not the spokesman for the 2015 project. My personal answer is watch what we do. We've told what we’re doing. There are progress reports on our goals on the Web. We’re as transparent as we can be. We do have some legacy issues but if we are only going to talk about legacy issues, you’re going to miss a lot of the good things we're doing in technology and projects.
There’s also some skepticism about the cost effectiveness of some corporate green initiatives and the perception that they are fashionable?
Energy is certainly a major issue for us, global warming, green house gases are certainly critical to our ongoing operations. We’re a big energy user. So we have to get that right.
From our standpoint we can operate our plants a lot more efficiently and save a lot of money and use less energy and release a lot less CO2. There are economic incentives for us to be sustainable, especially with the price of energy these days.