Dow generates £90m from natural capital projects

The Dow Chemical Company (Dow) has continued to prove the business case for measuring impacts on nature, generating almost £90m ($120m) from putting an economic value on natural resources in 2017.

Dow has set a target of generating £750m ($1bn) from

Dow has set a target of generating £750m ($1bn) from "Valuing Nature" projects by 2025

The firm’s “Valuing Nature” decision-making process, which incorporates the value of natural resources such as water and clean air into business decisions, generated three times as much money last year as it did in 2016 (£30m), the latest Dow sustainability report reveals.

The money was generated through a combination of cost savings and new cash flow, with Dow aiming to generate £750m ($1bn) from natural capital processes by 2025.

“At Dow, we see one role of business as a catalyst for change – as a driver of innovations that improve life and the environment, while creating sustainable economic growth,” Dow’s chief executive Jim Fitterling said.

“With our 2025 Sustainability Goals, Dow is focused on developing collaborative blueprints that integrate public policy solutions, science and technology, and value chain innovation. The aim is to build solutions between government, business and society that generate shared value and are long lasting, scalable and transformative. “

Natural capital integrates ecosystem-oriented management with economic decision-making and development, and some think tanks believe that it can be combined with conservation approaches to align business actions and environmental protection.

For Dow, this means formally factoring natural resources into business decisions, enabling an investment in conservation that goes beyond philanthropism. By 2020, all of the firm’s capital, real estate, and research and development projects will need to go through a “nature screen” as part of the approval process, with value added to sustainable projects and deducted from those with large environmental footprints.

One of the projects which generated money for the chemical manufacturer last year was at the firm’s Aratu site in Brazil, where employees helped stabilise an eroding slope with naturally engineered technology that incorporates native plants.

By using green gabion walls, which include steel mesh and natural fibre filled with rocks embedded with native vegetation, instead of concrete and tie-back anchors, the Aratu team saved money and carbon emissions while creating a living slope that captures CO2.

Another noteworthy achievement the report details is Dow’s progress towards its 2025 goal of advancing a circular economy. Its waste intensity (lb of waste per lb of product) was just 10% of its 2016 level last year as the company began collaborating with groups such as Ocean Conservancy, Ellen MacArthur Foundation and stakeholders across the packaging value chain to identify paths towards a cradle-to-cradle business models.  

Circular projects included a collaboration with the Indian cities of Bangalore and Pune to turn plastic waste into surfacing materials for 40km of roads, diverting 100 tonnes of plastics from landfill, and research into how to develop a market for recycled polyols from end-of-life mattresses.

Dow has additionally cut the CO2 emissions by 10% year-on-year at its Texas City site as it strives to keep its greenhouse gas (GHG) emissions below 2006 baseline levels as the company grows.

Natural selection

Dow is the only chemical company to have signed up to the Natural Capital Coalition, which consists of more than 250 organisations that have committed to conserve and enhance natural capital.

Other members include retail giant Marks and Spencer (M&S), home improvement firm Kingfisher and luxury group Kering, with some members subscribing to the Natural Capital Protocol and others setting their own frameworks.

A previous report from the Aldersgate Group called on the UK Government to support businesses investing in natural capital after technical services firm AECOM stated that UK firms are missing out on a £7bn windfall by ignoring the natural capital. Globally, the world’s total natural capital was valued at £53trn by the United Nations Environment Programme in 2010.

However, not everyone is in agreement on the impacts this approach can have on business. For example, Richard Carter, head of sustainability and finance at UK brewer Adnams, claimed that natural capital accounting can be a "disaster" for sustainability professionals and is not an effective way of engaging the finance community with environmental issues.

Sarah George


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