JOEL MAKOWER, WORLDCHANGING.COM, AUGUST 1, 2006
Dow Chemical announced last week that it would develop new technologies and solutions “for creating safer, more sustainable water supplies for communities around the world.”
The announcement, part of Dow’s 2015 Sustainability Goals, included a pledge to develop technologies focusing on desalination; chemistry and polymers for removing specific impurities; leak-reducing materials that increase the efficiency of community water systems; and lower-cost technologies and business models for managing municipal water supplies.
Sounds like yet another in a series of old-line polluters committing to a new, greener strategy in the footsteps of GE, Dupont, and BP, right?
Of course, it’s never that simple.
Dow, it seems, has a longer row to hoe than most big companies to be seen authentically as a convert to sustainability. And while the three companies mentioned above — and nearly all industrial companies, for that matter — have environmental legacies to deal with, Dow’s legacy may be tougher than most to overcome. The modern history of the 110-year-old company includes manufacturing the Vietnam-era defoliant Agent Orange, which made its way into the food chain and was linked to birth defects among Vietnamese people and U.S. soldiers. Dow also manufactured napalm, a mixture of petrol and a chemical thickner that produces a tough sticky gel that attaches itself to the skin. Its use by U.S. troops is associated with thousands of horrific deaths of Vietnamese.
The legacy also includes Dow’s ownership of Union Carbide, which it purchased in 2001, making it heir to that company’s toxic tragedy in Bhopal, India. A 1984 gas leak at a Union Carbide plant there released 27 tons of the deadly gas methyl isocyanate, leading to some 20,000 deaths and, according to some accounts, injuries to more than 100,000 others. (In 1989, Union Carbide paid a $470 million legal settlement to the government of India for the accident.)
Then there’s Dow’s production of a myriad of plastics, including vinyl chloride, which has been singled out as particularly toxic; and the pesticide Lorsban, which has been associated with death among wildlife that inhale its vapors. And, of course, the silicone breast implants that Dow Corning (co-owned by Dow) marketed in the 1970s, which caused health problems for some women after the devices began leaking. Dow ultimately paid more than $3 billion to cover claims associated with implants among 170,000 women.
Suffice to say, turning this legacy into a warm, fuzzy image is not for the faint of heart.
Not that Dow isn’t trying. In addition to its water announcement, the $46 billion (2005 sales) company recently launched a new corporate image campaign called “The Human Element.” Its goal, according to a Dow press release, is to “reintroduce the company and announce its vision of addressing some of the most pressing economic, social, and environmental concerns facing the global community in the coming decade.”
“This is more than an ad campaign to our company. It is a statement to the world and, more importantly, to ourselves about the future direction of our business,” said Patti Temple Rocks, Dow vice president of global communications and reputation. “It will be our calling card to people around the world who care about the future relationship between businesses, society, and the environment. It reflects our intention as a company to prioritize the things we do to advance innovation and focus the people and resources of Dow on solving human problems.”
The company says the campaign will run in U.S. broadcast, print, and online media through the end of 2006, with plans to extend the campaign to key international markets in 2007. So far, the campaign has been relatively low-key, compared to, say, GE’s Ecomagination rollout last year, or BP’s “Beyond Petroleum” campaign. Indeed, Dow’s name and logo flash only briefly at the end of its 30-second commercials.
Perhaps it’s better that way. The ads seem largely ineffective, in that their core message (We love chemicals + we care about chemicals = we care about you, the human element) seems vague and noncommittal, the impressive cinematography notwithstanding. It’s another in a long line of frustratingly nonspecific corporate image ads that I’ve railed against in the past. What specifically does Dow intend to do differently to address the “human element”? There’s no clue. (View images from the campaign here.)
It’s not that Dow hasn’t gotten the green corporate bug. Like many companies, it is investing in clean technologies. In June, for example, it acquired Zhejiang Omex Engineering Co. of China because, Dow said, the smaller company specializes in water-purification systems. Also in June, Dow purchased $1.25 million in stock of Millennium Cell, a fuel cell manufacturer, part of a “three-year, milestone-driven joint development program to collaborate on the development and commercialization of portable fuel cell systems for use in consumer electronics and military applications,” says Dow. The company also says it plans to look at plastics and other products to build modular homes for use in developing countries, according to news reports.
But these are, at best, timid steps toward sustainability for a behemoth chemical company, and unlikely to move the masses to view Dow in a kinder, gentler light. Unlike GE and Dupont, which have made the introduction of sustainability-minded products a core business-development strategy, and BP, for which alternative energy is a natural extension of its existing energy business, Dow’s effort to paint a green self-portrait seems feeble — an almost obligatory gesture in an era in which companies are expected to be more proactive about the fate of the earth and its denizens.
In the end, an unapologetic chemical company’s low-key efforts to persuade the public that it wants to be a leader in clean water is bound to leave a bad taste in most people’s mouth.
Here’s another possibility.
Dow, as well as other major chemical companies, want to “own” the basic necessities of life – in keeping with the neocons’ goal to privative everything.
The chemical companies have genetically modified basic food, and seeds, then get a patent issued by the U.S. saying that the chemical companies “own” this particular seed. For example corn.
Farmers buy the seed. It blows into neighboring fields. Anyone who is found with any of the chemical company’s seed in their fields is sued by the chemical companies, and must pay money to the chemical companies for using “their” corn seed.
Of course, they spread their seed far and wide so that eventually all of the corn seed in the world is contaminated with their seed, and every farmer in the world must pay money to them every single year for every crop they grow.
I think they have the same idea in mind for water. They will put drops of their patented chemicals in some water supply, then assess charges against every municipality whose water tests positive for this specific chemical. After all, it’s “patented” and they own it.
Soon all the drinkable water in the world will be essentially “owned” by the chemical companies.
Thirsty? Get out your wallet.
By: NABNYC on August 01, 2006 at 12:30pm
Flag: [abusive] Small communities all down the Rio Grande Corridor depend on ground water “leaked” from unsealed canals.
By: qofdisks on August 02, 2006 at 01:57am
Flag: [abusive] Thanks for this very good article.
Wanted to correct one, widely spread fallacy.
Dow Corning has NOT paid but a small fraction of the hundreds of thousands of women harmed by their faulty products. Those that have been paid, received an average of a miniscule $10,000 per woman … barely enough to cover the cost of removing their failed implants.
The vast majority have received nothing, though their health problems and often disfigurement continue.
Dow did however, hire the JunkScience Propaganda Team to spread vast amounts of disinformation for well over a decade now, as well as help fund ‘studies’ that miss the damage done to these women.
Posted by: Ilena Rose at July 31, 2006 08:31 AM
First, full disclosure: I am former employee of Dow and a current shareholder of Dow. My household also holds a smaller amount of GE stock – my spouse wants it, I don’t. Believe me, I’d sell it in a heartbeat if he’d just say yes, and I’m going to keep hammering on him about it until he sells.
I am shareholder of Dow because the company is NOT the same company it was 10, 20, 30 years ago, and the people in its culture – some of them my close friends — are very conscious of their social responsibilities. They haven’t forgotten Agent Orange nor Bhopal, even though they may have joined the firm long after; these two millstones haunt their every business decision, and yet they manage to continue to innovate and achieve profitability (although not all the time, like many other businesses in their industries). It is because of these issues that Dow instituted a “triple bottom line” measurement on its performance every year, weighing economic prosperity, environmental stewardship and corporate social responsibility against previous performance and against its competitors.
I had a professor at a local university who was a former Dow employee; I remember him tearing up during a lecture, when he discussed with the class products Dow made during the Vietnam era. He was still greatly affected 20+ years later by the choices the business made at that time. A substantive number of the employees were and remain extremely concerned about the acquisition of Union Carbide (UCC) because of Bhopal; it was a soul-rending, massive “blot” on a corporate culture that was safety conscious to the extreme. (Employees know never, ever to cut a corner at Dow on safety, or they will be walking the pavement outside the plant gate in a hurry, sans employment.) Bhopal continues to weigh on the people of Dow because they did not have any control over UCC, and the people responsible were long gone by the time what remained of UCC was acquired. They are now saddled with the burden — emotional, psychic and otherwise — of a disaster whose precursors these people could not ever have tolerated on Dow property under Dow control.
I will tell you from feedback I received from friends that they were aghast at how UCC was run once the acquisition was completed and Dow folks took over the operations; the business still operated as if it was in the 1950’s in many respects, scared the bejabbers out of many of these safety conscious people. They’ve worked damned hard to bring what remained of UCC up to contemporary safety and operational performance — while having to deal with the new and additional burdens of post-9/11 security issues at the same time. These are critical factors about which most outside observers, including the average shareholder, are in the dark about completely, that the acquisition increased safety exponentially to communities in which UCC plants existed, while saddling Dow employees and shareholders with an enormous burden.
Dow employees also had to deal with the issue of profitability; the acquisition was a drain at the same time that energy feedstocks began to escalate in price. Energy feedstocks like natural gas and petroleum are a substantial portion of chemical companies’ costs, and Dow is hardly an exception. Pressure for sustained profitability in spite of UCC and energy costs led to an upheaval at the level of CEO. (Fortunately for me, I left the firm as part of a spin-off deal not long after the acquisition of UCC but before this management change; the stress for those who remained was great.)
If I’ve been concerned about holding Dow stock, it was at this point; a former CEO, an old schooler who was far more concerned with the financial bottom line and making shareholders happy, returned to the business to whip it back into shape. Blossoming innovations were curtailed in order to save money; I can tell you that what I knew about innovations in the pipeline prior to UCC were breathtaking, the kind of transformative technology that could change the world as we know it. But unfortunately, if innovation is not making money in a short time frame under the kind of pressure that shareholders place on profitability, it’s gone – shelved and written off, or patents sold off to businesses that may or may not bring the innovation to market. I am absolutely certain that some of the transformative technologies I saw in incubation died on the pyre of profitability.
For all I know as an outsider, large-scale hydrogen fuel cell technology development may have suffered for profitability. Dow had joint ventures or agreements dating back a few years with at least two auto manufacturers to provide hydrogen (a waste product for Dow) to the auto makers for fuel cells, which in turn Dow would trial for plant electricity. Have you heard anything more about these particular efforts? Do tell – because I haven’t.
Right here is the crux of the matter: Dow is a publicly-held corporation that must respond to shareholders. If shareholders want double-digit returns and consistent dividends, then sacrifices must be made. What will maintain the financial yield shareholders saw last year – a new, untried environmentally-sound technology needing two more years investment, or a tried-and-true chemical product? Will paying for local environmental cleanup pay greater dividends than investing the money in more efficient production technology while fighting local cleanup? Will increasing investment in smoking cessation and on-site healthcare reduce healthcare insurance costs and improve profitability? The answers are a complex matrix – and the ultimate driver and beneficiary is the shareholder.
Don’t kid yourself for a moment that any of the other companies cited in this article are somehow better. They are under the very same pressures, have managers that are schooled just like those at Dow, may even share board members, consultants, investment firms, you name it. Jack Welch, for example, has been revered in business circles for his ability to grow and create profit, used as model of management prowess in business schools and by boards of directors around the world. However Welch did some dicey things as leader of GE; he used long-term funds to finance short-term debt, and chewed up/spat out employees like so much chaff. How is this socially responsible behavior? (Don’t even get me started on his personal relationship that surely cost GE shareholders.) Welch’s successors are compared to Welch by shareholders; will they be as profitable and ruthless as Welch? How does that shape an organization? Has GE and its shareholders learned anything from the Welch years and earlier, or are they doing business and investment as usual?
More importantly, are shareholders demanding more than increasing stock value and dividends? When are we going to hold shareholders accountable, ask them to do more than simply use industries’ own definition of sustainability as a benchmark for performance?
Ultimately, what sets Dow apart is not their current business practices, but past mistakes that are named and branded with one or two words – and whether the business and its shareholders learn constructively from them. What also sets Dow apart will be its inability to educate the larger public about what it has already accomplished.
Did you know that Dow has been providing half a million people with clean water through its technologies since 1999 in a suburb of Paris France at the Mery sur Oise filtration plant — the same kind of technologies mentioned in this WorldChanging article?
Did you know that Dow instituted that triple bottom-line measurement back in the mid-90’s, and a 12-point sustainable operating development plan in 2000? That fuel cell technology has been in the pipeline at Dow well before the UCC acquisition? Or that Dow invests in its local communities, or makes grants to countries like Tanzania to further sustainable development?
I didn’t think so. That’s a different and very long row for Dow to hoe. I’ll give up my Dow stock when I don’t hear about constructive and sustainable behavior by their management and employees.
P.S. in response to the previous comment, Dow Corning is a joint venture and a separate organization from Dow Chemical. The media and the public don’t seem to understand this any more than they understand that the word “Stryofoam” is a brand name and not a universal term for expanded styrene. It’s the same kind of blindness that helps people ignore their responsibilities in driving corporate decision making.
Posted by: Rayne at July 31, 2006 11:03 AM
Dow had a weird ad campaign recently where they talked about how companies need to consider the “human element” which was, RIDICULOUSLY, “Hu”: atomic number 6 or 8 or something. That means it’s either carbon or oxygen. I’d have laughed if it didn’t make me so angry. Nice idea, but piss-poor implementation.
Posted by: Automaton at July 31, 2006 12:08 PM
Adding to my above post, it looks like the human element is number 74 in your photo there, instead of whatever it is they had in their TV ad. But that’s Tungsten! It’s completely meaningless. Are they trying to say they don’t understand basic chemistry?
Posted by: Automaton at July 31, 2006 12:12 PM
Um, how is Dow going to survive after peak oil?
Anyone for $300 per barrel oil?
What is it going to use as a feedstock when oil doubles and triples in price? Just how much sugar cane or biomass can we grow to make “green chemistry” plastics? How much land will that take? How much ethanol/biodiesel growth will that displace? What happens if Dow goes belly up… how many employees will that be out of work? (Along with bankrupt car-manufacturers and airline employees.)
Where is the nano-tech revolution that is going to revolutionize materials construction all-together? We need it, now.
Peak oil is more than transport fuel. Yes it will affect the viability of the airline industry and car industries in their current format. No I don’t think there is a “silver bullet” in energy that can do the job oil does. But far more than “just” transport, the very feedstock of the entire petro-chemical and plastics industry is threatened.
With transport, plastics, chemicals, and even fertilizers (NPK are mined, transported and manufactured using oil and gas), oil really is the “lifeblood” of our civilization. Dow “going green” may just be a advertising stunt, but it’s too little too late. Unless some miracle of algae growth is initiated, I fully expect Dow to be bankrupt within the decade.
Posted by: Eclipse Now at July 31, 2006 05:17 PM
So what would Worldchanging suggest Dow does to stop being a typical liberal-communist greenwashing corporation?
As I understand it, Worldchanging is first and foremost a group of people who are striving towards social justice (the only worldchanging tool).
Is Worldchanging launching a campaign against this evil new activity of that terroristic company?
Posted by: Lorenzo at July 31, 2006 05:20 PM
On shareholders and long-term performance: long term initiatives tend to be riskier than business as usual, so it’s reasonable for the stock price to fall at least a little. But the idea that businesses don’t invest in longer term growth now shareholders bother to check the price of the asset their own is rather oversold. Australian supermarket Coles has just announced a AUD1.2 billion (~USD1 billion) investment in, um, signage.
“The consequence is a headline pause in profit while the underlying business performance continues to improve but the cost of these initiatives and the transformation means that headline [profit growth] will pause for 12 months,” Mr Fletcher said.
That long term attitude for business growth is of course in stark contrast to what they’re focusing on, branding. But is it such a stretch to imagine the same soundbite being used to explain initiatives in eg, energy efficiency?
Posted by: Adam Burke at July 31, 2006 07:51 PM
Until you have suffered twenty years from the horrible neurologic and respiratory damage from isocyante poisoning like I have, you cannot find a way to excuse those who perpetrate this crime and continue to do so. If an individual rather than a corporation would have done this to me, I would have been convicted of a crime. But a corporation can do this and get no more than court delays and minor sellouts. But judicial bribery became an issue in my case, that could never amount to any more than a civil issue. Lawyers and doctors got everything. Judges made out like bandits. I got nothing.
Posted by: Victors at July 31, 2006 08:35 PM