Contents

Foreword xix

Preface xxiii

Acknowledgments xxv

1 Introduction 1

1.1 Organization of the Book, 3 Reference, 5

2 Addressing Sustainability in the Chemical Industry 7

Marianne Lines (BRIDGES to Sustainability)

2.1 Introduction, 7

2.2 Understanding the Chemical Industry, 8

2.2.1 Sector Profile, 8

2.2.2 Contribution to the Economy, 9

2.3 Drivers of Sustainability, 10

2.3.1 Chemical Sector Survey, 10

2.3.2 Survey and Focus Groups Key Findings, 18

2.3.3 Current Status of Sustainability Programs, 20

2.4 The Role of Responsible Care® in Advancing Sustainable Development, 20

2.4.1 Public Trust and Environmental Performance, 22 2.5 Challenges Ahead, 24 References, 25

3 Views on Key Issues Facing the Chemical Industry 27

3.1 Overview, 27

Marianne Lines (BRIDGES to Sustainability)

3.2 The Chemical Industry and the Public: Will the Chemical Experiment Continue?, 31 Beverley Thorpe (Clean Production Action)

3.3 Risk Assessment, 35

3.3.1 Chemical Risk Assessment as Used in Setting Regulatory Levels or Standards, 35

Bernard K Gadagbui, Lynne T Haber and Michael L Dourson (Toxicology Excellence for Risk Assessment [TERA])

3.3.2 The Limits of a Risk Assessment-Based Approach to Sustainability in the Chemical Industry and the Need for a New Paradigm Based on Precaution, 42

Joel Tickner (Lowell Center for Sustainable Production, University of Massachusetts-Lowell)

3.4 Limits of Risk Management and the New Chemicals Policies, 52

Ken Geiser (Lowell Center for Sustainable Production, University of Massachusetts-Lowell)

3.4.1 Conventional Chemical Risk Management Policies, 53

3.4.2 New European Chemicals Policies, 55

3.4.3 New International Chemicals Policies, 57

3.5 Impacts to Human Health and the Environment, 58

3.5.1 The Challenge of PBTs for the Chemical Industry, 58

Joanna D Underwood (INFORM)

3.5.2 Hormone Disrupting Chemicals (Endocrine Disruptors), 62

Richard A Liroff (Toxics Program, World Wildlife Fund)

3.6 Impacts of, and Issues Associated with, Chemical Production from Manufacture to Final Use and Disposal, 65

Richard Sigman (Organisation for Economic Co-Operation and Development [OECD])

3.6.1 Use of Natural Resources and Releases to Air and Water and Waste Generation, 65

3.6.2 Environment, Health and Safety Issues and Policies, 68

3.7 Closing the Gap on Chemical Plant Security, 69

Agnes M Shanley (Pharmaceutical Manufacturing Magazine)

3.7.1 Doing the Right Thing, 73

3.7.2 The Human Factor, 73

3.7.3 Implementation is a Weak Point, 74

3.7.4 Need to Look Offshore, 74

3.8 Economic Issues and Competitiveness, 75

Peter H Spitz (Chemical Advisory Partners)

References, 81

4 Planning for Sustainability 89

Beth Beloff (BRIDGES to Sustainability)

4.1 Planning Overview, 89

4.1.1 Planning Framework, 89

4.1.2 Corporate Sustainability Learning Curve, 92

4.2 GEMI's Approach to Sustainable Development Planning, 95

Elizabeth C Girardi Schoen (Pfizer, Inc.), Stephen Poltorzycki (The Boston Environmental Group)

4.2.1 Planning Framework, 96

4.2.2 Who Should Use SD PlannerTM?, 97

4.2.3 Company Experience with SD Planner TM, 103

4.2.4 Conclusion, 104

4.3 Environmental Management Systems (EMS) Frameworks for Sustainability, 105

4.3.1 Expansion of Environmental Management Systems to Address Sustainability, 105

Art Gillen (First Environment, Inc.)

4.3.2 The American Chemistry Council's Responsible Care® Management System, 108

Art Gillen (First Environment, Inc.)

4.3.3 EMAS versus ISO 14001, 110

Rainer Ochsenkuehn (First Environment, Inc.)

4.3.4 Occupational Health and Safety Assessment Series (OHSAS 18001:1999), 114

Art Gillen (First Environment, Inc.)

4.3.5 Using Six Sigma Management Initiatives, 116

Robert B Pojasek (Pojasek and Associates)

4.4 The Natural Step Framework: Backcasting from Principles of

Sustainability, 119

Karl-Henrik Robert (Blekinge Technical University and The Natural Step,

Stockholm), Sissel Waage (The Natural Step, USA) and Dicksen Tanzil

(BRIDGES to Sustainability)

4.4.1 "Backcasting" from Principles of Success: Introduction to The Natural Step Framework and Approach, 120

4.4.2 Understanding Complex Systems and Thinking Upstream: Rationale for the Principles of The Natural Step Framework, 121

4.4.3 Applying The Natural Step Framework: A Strategic Sustainable Development Decision-Making Process, 123

4.4.4 Integrating Sustainability Thinking into Action: The Dynamics of Dematerializations and Substitutions, 124

4.4.5 Industry Example: PVC Production at Hydro Polymers, 126

4.4.6 Discussion and Conclusion, 128

4.5 Natural Capitalism for the Chemical Industry, 130

Catherine Greener (Rocky Mountain Institute)

4.5.1 What is Natural Capitalism?, 130

4.5.2 Four Principles of Natural Capitalism, 131

4.5.3 The Natural Capitalism Framework, 132

4.5.4 Implementing Sustainability through Natural Capitalism, 139

4.6 Sustainable Value in the Chemical Industry, 140

Dave Sherman (Sustainable Value Partners)

4.6.1 The Chemical Industry's Challenge, 140

4.6.2 Who are Stakeholders?, 142

4.6.3 The Need for a New Approach, 143

4.6.4 A Disciplined Process, 146

4.6.5 Three Key Phases, 146

4.6.6 Conclusion, 149

4.7 CSR/SRI Reporting Complexity and the Future 500 CAP

Gap Audit™: An Opportunity for Improved Strategic

Business Planning and Stakeholder Alignment, 150

Cate Gable (Future500)

4.7.1 A Business Case Introduction, 150

4.7.2 The CSR/SRI Standards, the Future 500 CAP Gap Audit™, and Business Planning, 152

4.7.3 Conclusion, 158

References, 159 Suggested Reading, 161

5 Designing for Sustainability 163

5.1 Designing for Sustainability: Overview, 163

Dicksen Tanzil and Earl R Beaver (BRIDGES to Sustainability)

5.1.1 Designing for Sustainability: What It Means, 164

5.1.2 Design and Lifecycle Assessment, 166

5.1.3 Sustainable Design Strategies and Implementations, 168

5.2 Cradle-to-Cradle Material Assessment and Product Design, 179

Lauren Heine (GreenBlue)

5.2.1 The Cradle-to-Cradle Model, 179

5.2.2 The Context for Cradle-to-Cradle, 180

5.2.3 The Cradle-to-Cradle Approach to Material Assessment and Product Design, 181

5.2.4 What the Chemical Industry Can Do, 186 Acknowledgment, 188

5.3 Principles of Sustainable Engineering, 188 Martin A Abraham (University of Toledo)

5.3.1 The Principles, 189

5.3.2 Discussion of the Principles, 189

5.3.3 Concluding Comments, 194

References, 194

6 Implementing Sustainable Development: Decision-Support

Approaches and Tools 199

6.1 Assessing Impacts: Indicators and Metrics, 199

6.1.1 Overview, 199

Dicksen Tanzil and Beth R Beloff (BRIDGES to Sustainability)

6.1.2 The GSK Approach to Metrics for Sustainability, 214

David J C Constable, Alan Curzons, Ailsa Duncan, Concepcion Jiménez-González and Virginia L Cunningham (GlaxoSmithKline, USA)

6.1.3 The Eco-Efficiency Analysis Developed by BASF, 220

Ernst Schwanhold (BASF Aktiengesellschaft)

6.2 Assessing Values: Costs and Benefits, 228

6.2.1 Overview, 228

Beth Beloff (BRIDGES to Sustainability)

6.2.2 Intangibles and Sustainability, 229

Karina Funk (Massachusetts Renewable Energy Trust), Pamela Cohen Kalafut and Jonathan Low (Predictiv)

6.2.3 Total Cost Assessment: Looking at All the Costs Involved with a Decision, 234

Lise Laurin (EarthShift), Greg Norris (Sylvatica)

6.2.4 Societal Costs, 238

Beth Beloff, Dicksen Tanzil and Matthew Retoske (BRIDGES to Sustainability)

6.2.5 Valuing Ecosystem Services, 249

Mitchell Mathis (Houton Advanced Research Centre [HARC])

6.3 Auditing Sustainability Performance, 256

6.3.1 Introduction, 256

Karen L Coyne (CoVeris, Inc.)

6.3.2 Sustainability Auditing, 257

Karen L Coyne (CoVeris, Inc.)

6.3.3 Corporate Responsibility Auditing: Assuring What Companies Say to the Public is Truthful, 272

Neil Smith and Paul Scarbrough (Smith OBrien)

6.3.4 Auditing Responsible Care® Worldwide, 277

Brad Verrico (Verrico Associates)

6.3.5 EHS Management System Audit Strategies for RCMS, RC14001, and ISO 14001, 278

Rainer Ochsenkuehn (First Environment, Inc.)

6.3.6 New Mexico's Green Zia Environmental Excellence Program: Third-Party EMS Performance Auditing, 280

Jeff Weinrach (New Mexico Environment Department)

6.4 Reporting Sustainability Performance: Latest Trends in Corporate Reporting, New Tools, and Practices, 287

Stephanie Meyer (Stratos Inc.)

6.4.1 Sustainability Reporting is Becoming a More Common Practice, 287

6.4.2 The Organizational Scope of Reporting Varies Substantially, 290

6.4.3 There are Sound Business Reasons Why Companies are Reporting, 290

6.4.4 This is a Time of Experimentation: To be Effective, Reports Should Evolve to Address a Number of Emerging Issues, 291

6.4.5 Moving Forward on Sustainability Reporting, 297

6.4.6 Sustainability Reporting Case Study: Conducting Today's Business with Tomorrow in Mind Thomas C Pasztor, (PotashCorp), 297

6.4.7 Tales from the Trenches, 298

6.5 Security and Sustainability, 299

Scott Berger (American Institute of Chemical Engineers [AIChE])

6.5.1 The Roots of Terrorism, 300

6.5.2 Terrorist Strategies and Tactics, 300

6.5.3 Security Vulnerability Analysis, 301

6.5.4 Security Countermeasures, 306

6.5.5 Long-Term Security Management, 306

6.5.6 Can Sustainability Prevent Terrorist Attacks?, 307

6.6 Building Corporate Social Responsibility, 307

Neil Smith and Joan Bigham (SmithOBrien)

6.6.1 The Business Case for Corporate Social Responsibility, 308

6.6.2 Managing Responsibly, 310

6.6.3 Drivers of Corporate Social Responsibility, 311

6.6.4 Managing Supply Chains Responsibly, 315

6.6.5 Protecting and Contributing to the Community, 318

References, 321

7 Future Directions for the Chemical Industry 329

7.1 Sustainable Directions for the Chemical Industry: A Look to the Future, 329

Ken Geiser (Lowell Center for Sustainable Production, University of Massachusetts-Lowell)

7.1.1 Chemical Stewardship: Services, 330

7.1.2 Green Chemistry: Materials and Function, 331

7.1.3 A Look to the Future, 333

7.1.4 Moving Towards Sustainability, 334

7.2 Rethinking Products, 335

7.2.1 Safer Chemicals Within Reach, 335

Beverley Thorpe (Clean Production Action)

7.2.2 Addressing the Challenge of PBTs, 339

Joanna D Underwood (INFORM)

7.3 New Directions, 342

7.3.1 Biomimicry: How and Why R&D Should Be Driven By Nature's Design, 342

Mark Dorfman

7.3.2 Sustainability, Environment and Nanomaterials, 348

Mark R Wiesner (Environmental and Energy Systems Institute, Rice University)

7.3.3 Entrepreneurship and Innovation, 352

Andrea Larson (Darden Graduate School of Business Administration)

References, 357

8 The Business Case for Sustainable Development 361

8.1 Overview, 361

Beth Beloff (BRIDGES to Sustainability)

8.2 2004 Chemical Industry Sustainability Survey (Compiled by PricewaterhouseCoopers, LLP), 363

Andrew Savitz, Douglas Hileman and Michael Besly (PricewaterhouseCoopers, LLP)

8.2.1 Overview, 363

8.2.2 Introduction, 364

8.2.3 Survey Analysis and Follow-Up, 366

8.2.4 Focus Groups' Perspectives, 375

8.2.5 Comparison to Other Published Surveys, 378

8.2.6 Conclusions and Path Forward, 380

8.3 Sustainability and Performance: An Overview, 382

Karina Funk (Massachusetts Renewable Energy Trust)

8.3.1 Intangibles and Value Creation, 384

8.3.2 Sustainability in Practice, 385

8.3.3 Driving Innovation, 386

8.3.4 Communicating Transparency, Transparently, 387

8.3.5 Creating Differentiation, 388

8.3.6 Managing Risk, 388

8.3.7 Enhancing Growth and Expansion, 389

8.3.8 A Company-Level Sustainability Model, 390

8.4 DuPont: Growing Sustainably, 392

Dicksen Tanzil (BRIDGES to Sustainability), Dawn G Rittenhouse (DuPont), Beth R Beloff (BRIDGES to Sustainability)

8.4.1 Sustainability as a Growth Strategy, 392

8.4.2 DuPont's Journey, 395

8.4.3 Realizing the Transformation, 396

8.4.4 Managing Sustainable Growth, 397

8.4.5 Sustainable Growth in R&D, 397

8.4.6 Sustainable Growth in Operations, 398

8.4.7 Results and Challenges, 400

8.4.8 The Business Case, 401

8.5 Business Value from Sustainable Development at shell, 402

Mark Wade (Shell International Limited) and Joe Machado (Shell Chemical LP)

8.5.1 The Lessons of the 1990s, 403

8.5.2 Responding to the Challenge, 404

8.5.3 A Different Way of Doing Business, 405

8.5.4 The Business Case for Sustainable Development, 406

8.5.5 Embedding Sustainable Development into the Organization, 407

8.5.6 Measuring and Communicating Performance, 409

8.5.7 Engaging with Stakeholders, 410

8.5.8 Working with Others, 410

8.5.9 Contributing to Sustainable Development and the Use of Finite Resources, 411

8.5.10 Conclusion, 412

8.6 Sustainable Development: An Integral Part of BASF's Corporate Values, 413

Ernst Schwanhold (BASF Aktiengesellschaft)

8.6.1 Values and Principles, 414

8.6.2 Our Commitment to the Global Compact, 414

8.6.3 Management Structures, 414

8.6.4 Examples for the Implementation of Sustainable Development within BASF, 415

8.6.5 The Eco-Efficiency Analysis, 418

8.6.6 Dialog: An Important Part of Sustainability, 420

8.6.7 Financial Markets Honor Sustainable Development, 421

8.6.8 Conclusions, 422

8.7 The GSK Approach to Sustainable Development, 422

David J C Constable, Alan Curzons, Ailsa Duncan, Concepcion Jiménez-González and Virginia L Cunningham (GlaxoSmithKline, USA)

8.7.1 Introduction, 422

8.7.2 Sustainability Strategy, 424

8.7.3 Designing Products for Environmental Sustainability, 427

8.7.4 Green Chemistry Guide, 428

8.7.5 FLASC®: Fast Lifecycle Assessment for Synthetic Chemistry, 429

8.7.6 Materials Guides, 430

8.7.7 Conclusions, 434

8.7.8 Acknowledgments, 434

8.8 Moving 3M Toward Sustainability: The Business Case for Sustainable Development, 435

Keith J Miller (3M)

8.8.1 Transition to Sustainability, 436

8.8.2 Organizing the Move Toward Sustainability, 437

8.8.3 Sustainability and Growth, 438

8.8.4 Sustainability and Risk Management, 440

8.8.5 Benefits/Opportunities, 441

8.8.6 Challenges, 442

8.8.7 The Business Case for Sustainability: The Bottom Line, 443

8.9 Achieving Business Value: The Investment Community Perspective on the Importance of Including Environmental and Social Aspects in Valuations, 444

Don Reed (ECOS Corporation)

8.9.1 Introduction, 444

8.9.2 Environmental and Social Issues as Business Issues, 444

8.9.3 "Value at Stake": Environmental and Social Issues in the Chemical Industry, 446

8.9.4 Examples of How Sustainability Leaders in the Chemical Industry View Value, 447

8.9.5 The Prevailing View of Mainstream Investors on Sustainability in the Chemical Industry, 450

8.9.6 Sustainability Research, Ratings, and Indexes, 451

8.9.7 Key Issues for Analysts of the Chemical Industry Now and in the Future, 453

8.9.8 What the Future May Hold for Investors, 453

8.9.9 What Could Be Next for Chemical Companies, 454

8.10 Investment Analysis: Dow and Bhopal, India, 455

Marc Brammer (Innovest Strategic Value Advisors)

8.10.1 The Meaning of Bhopal for Investors, 456

8.10.2 The Bhopal Disaster, 459

8.10.3 History of the Bhopal Case, 460

8.10.4 After the Dow Chemical Acquisition of Union Carbide, 462

8.10.5 Union Carbide's Pending Criminal Charges in Bhopal, 462

8.10.6 Toxic Wastes and Contaminated Groundwater, 463

8.10.7 Impact on Dow Chemical's Reputation, 466

8.11 Scientific, Political, and Investor Drivers of Chemical Industry Sustainability: An NGO Perspective, 468

Richard Liroff (WWF)

8.11.1 New Scientific Understanding of Chemicals' Health Effects, 469

8.11.2 Increased Biomonitoring Programs, 469

8.11.3 Media and Public Attention to Chemical Exposures and Disease Incidence, 470

8.11.4 Changing Demand From "Chemical Choosers," a/k/a Consumer Goods Companies, 470

8.11.5 Convergence of Nonprofit Groups' Environmental and Public Health Agendas, 471

8.11.6 Tightening Regulations in Europe and at the State and Local Level in the United States, 472

8.11.7 Increasing Investor Concern, 472

8.11.8 Insurer and Reinsurer Concern, 473

8.12 The Role of Leadership and Corporate Governance, 474

David Robert Taschler (Air Products & Chemicals, Inc.)

8.12.1 The Case for Leadership Commitment, 474

8.12.2 Identifying the Leaders, 475

8.12.3 The Role of Champion, 475

8.12.4 Engaging the Board, 476

8.12.5 Experience Necessary, 476

8.12.6 Affiliation with Other DJSI Companies and Sustainability Initiatives, 477

8.12.7 Communicating the Commitment, 478

8.12.8 Walking the Talk, 479

8.12.9 The Call to Action, 480

References, 481

Appendix 1 Responsible Care® Global Charter 487

Appendix 2 Directory of Standards and CSR-Related Organizations 492

Appendix 3 Author Biographies 502

Index 513

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