DuPont is a science company. We use science and technology to solve problems that make life on our planet better and safer. DuPont coined the phrase "sustainable growth" as distinct from "sustainable development" to incorporate the notion that we must grow as a corporation, but do it in a way that demonstrates environmental excellence while we add shareholder value. A key route to achieving the promise of sustainable growth is technological innovation, which in turn, requires the integration of multiple scientific disciplines.
The objective of sustainable growth is to create value for society and our shareholders while minimizing the environmental foot print that our processes and products leave in the world. This is different from just minimizing the environmental impact of waste and emissions — although that remains a key task. Our approach is holistic and integrated, and that's why we can say we are engaged in building a smaller footprint. For sustainable growth to succeed, it requires that we optimize economic attractiveness and ecological viability. It has to be an intentional process. We have to do it not only in the way we manage our operations – but also, and maybe even more so – in the kinds of products we create for the future.
Our goal of sustainable growth did not emerge from a vacuum. DuPont has a clear set of core values that can be traced back to our founder E. I. du Pont, who started the company in 1802. The values are a commitment to safety, health and environmental protection; conducting business according to high ethical standards; and treating all people with dignity and respect. We talk about these values all the time, and our employees know that they guide our decisions. The idea of sustainable growth and building a smaller footprint emerged from these values.
Our values, like DuPont itself, have stood the test time. Our company is more than 200 years old and has undergone several transformations during two centuries of growth and development. The challenge for any company that endures over such a long period of time is how to transform itself. By the time its mainstay businesses and technology platforms have peaked and begun to decline in terms of competitive advantage and potential for growth and profit, the company must already be well along in the development of a new set of businesses and critical technology platforms.
DuPont has succeeded in these transformations for a number of reasons, but chief among them has been our inherent understanding that 1) science and technology are the way we create value in our company; and 2) fundamental transformations are inevitable over the long haul and they are to be pursued deliberately and energetically. As a consequence, we like to say that transformation is in the DNA of DuPont.
During the company's era as an explosives manufacturer, E. I. du Pont used technology he learned in France to revolutionize black powder manufacturing in America. Half a century after the company's founding, Lammot du Pont invented a new kind of blasting powder that used sodium nitrate instead of potassium nitrate. The company also moved into high explosives in the 1880s that laid the basis for its expansion into chemistry and chemical engineering in the 20th Century.
In the 20th Century, DuPont rapidly expanded in chemical lines. Chemical engineering went from an empirical art to a true technological discipline, in part because of the contributions of DuPont engineers. We also witnessed the most dramatic improvements in the material standard of living the world had ever known. Some of these were the result of DuPont discoveries in basic research – nylon being the most famous. The chemical industry grew in response to global demand for products. Industry development was accelerated using the ever-increasing knowledge base of science and technology.
By the end of the 20th Century, DuPont could look back on a long history of using science to contribute worthwhile products to the basic needs of people around the world in terms of housing, apparel, food, transportation, electronics and other fields. Of course, we were not alone, as similar progress had been achieved by many other companies in industries across the board.
However, this remarkable growth came at a price. It was achieved through increasing use of energy derived from fossil fuel and from the irreversible use of non-renewable raw materials. The ecological impact of the last century cannot be understated. The decades of the 1950s through the 1980s saw tremendous consumption of natural resources with almost no attention to the consequences of that consumption on the environment. Like other companies, DuPont viewed growth during that period in terms of volume of products. Revenues were directly tied to increased volume of product sold. To increase revenue, you increased use of energy and raw materials proportionally.
The result was the "Big Footprint" in terms of environmental impact of manufacturing. Industry, prompted by comprehensive government regulations in many countries around the world, eventually began to focus on developing the ability to reduce waste and emissions. Gradually more consideration was given to renewable resources and to recycle and reuse. We also began to design processes and products that had less impact on the environment.
In the late 1980s, DuPont set environmental performance stretch goals for curtailing waste and emissions and for minimizing use of energy, water, and maximizing use of renewable resources.
However, as we approached the 21st Century, we recognized that adjusting the prevailing model would not lead our company to sustainable growth. We had to find ways to grow our businesses while minimizing the pounds of products dependent on non-renewable raw materials. We had to find a way to limit the increase in energy consumption as we grew.
This stepped-up commitment to environmentally sound operations coincided with the period in the early 1990s when we began to examine how we were organized as a company and which of our businesses could be counted on to take us into the 21st Century.
We began to develop a worldclass capability in new scientific areas such as biotechnology and determined that our success would come from integrating new scientific capabilities with our existing strengths. We focused on which markets offered our combination of strengths the best opportunities for growth. We believed we could accomplish growth while becoming increasingly sustainable. We began the process of building a smaller footprint.
By the end of the 1990s, we had embarked on no less than another transformation of our company – the transformation we are currently undergoing. We are relying on integration of the new body of knowledge being developed in the biological and nano-sciences with our traditional chemical and materials science base. This integration will enable us to develop technology for products and services that will allow us to grow in the years ahead. However, this transformation differs from the transformations of the past because we are factoring into our transformation the requirement that our future growth must be sustainable growth. That has a profound impact on the technology platforms we are developing and the businesses we are building.
We created five growth platforms for the company's businesses. Several include businesses that have long been associated with DuPont, such as DuPont Coatings & Color Technologies, DuPont Performance Materials, and DuPont Electronic & Communication Technologies. With DuPont Agriculture & Nutrition we are also the largest seed company in the world. DuPont Safety & Protection includes one of our fastest-growing businesses which does not manufacture a product, but which instead markets our knowledge of safety.
These platforms are also significant for what they do not include. We have announced our intention to separate DuPont Textiles & Interiors from the company. This includes nylon, Dacron® polyester, Lycra® spandex and many other brands that for much of the 20th Century were the heart of the company. Given the dynamics of their markets, these businesses have the best chance of success separated from the company.
All of our platforms have the same template for achieving the objective of sustainable growth. We have three growth pathways: Integrated science, knowledge intensity and productivity. As I have already mentioned, one of our strengths is our ability to integrate various scientific disciplines and come up with new technologies and products.
Our second growth pathway is knowledge intensity. As a company our technical and market knowledge is unsurpassed in many areas. In the past, we offered this knowledge to many customers as a premium for doing business with DuPont. Now we think that the potential in this knowledge should be translated into tangible business value – getting paid for what we know.
Knowledge intensity is key to making progress in a sustainability metric we created called "shareholder value added per pound" which measures how well a business is creating value for each unit of material output. We are most interested in business that has a high SVA/lb. Unlike the chemicals and materials businesses of the past, where value generation was in direct proportion to raw material and energy throughput and pounds produced, our goal now is to have value creation inversely related to pounds of product manufactured.
Knowledge content either reflected in the design and performance of the product, as a brand, or as information that is part of the offering, is one way of getting more value for each unit of production.
Our third growth pathway is productivity. No company can afford not to be focused on productivity in today's marketplace. At DuPont, we have adopted Six Sigma methodology. It's making a difference. Another facet of our productivity is our global reach and scope. Our manufacturing facilities are world scale operations and they are located around the world. We have excellent distribution networks and technical and business partnerships around the globe.
Of course, each of these pathways also has a direct bearing on sustainability. Our efforts are paying off. We are building a smaller footprint, even though we readily acknowledge that we have a long way to go.
We have defined the term footprint to include raw materials, energy, emissions, and waste, but also injuries, illnesses and environmental incidents. We also made impressive reductions in air carcinogens and toxics, greenhouse gas emissions, hazardous waste generated and reduction in deepwell disposal.
Our progress is acknowledged outside the company as well. We ranked No.1 in our sector on the Innovest 2002 survey and on the 2002-2003 Dow Jones Sustainability Index. And all these efforts have also contributed to our economic viability. This work has led to over $1 billion in savings for DuPont.
Energy use is a powerful measure of sustainability. Over the past decade volume grew 35 percent but we kept energy consumption flat. We have ambitious energy goals for the current decade which were set in 2000. We set up a system to measure our progress vs. the 1990 baseline, and it has helped us to make remarkable progress.
Our businesses have incorporated environmental sustainability into their growth strategies as evidenced by our recent acquisitions and divestitures and our asset productivity drive that has led to our having achieved the greenhouse gas emissions goal already.
Up to this point in my remarks, I have emphasized broad goals and overall strategies. Now I would like to offer some specific examples of how our businesses are actually accomplishing the goal of sustainable growth and successfully building a smaller footprint.
One example is our Tyvek® spunbonded products known for strong and durable mailing and courier envelopes. Tyvek® envelopes conserve natural resources by using 25 percent post consumer recycle content from used milk and water jugs, and the envelopes can be recycled in facilities across the U.S. Recycled water and milk jugs made of high density polyethylene into Tyvek® envelopes results in envelopes lighter than conventional Tyvek®. For courier companies and the postal service, this is an added benefit because lower weight cargo means lower fuel use and reduces emission of greenhouse gases.
Another application is Tyvek® HomeWrap™ and StuccoWrap which provide important water and weather protection while homes are under construction and, more importantly, improve the energy efficiency of homes after they are completed. A house wrapped with Tyvek® saves ten times the amount of energy used to make the Tyvek® – a 10-to-1 return on the energy investment in the first year.
The painting of automobiles results in volatile organic compound emissions, hazardous air pollutants, and odor emissions. DuPont took a major leap forward by introducing "super solids" coatings technology at the Daimler Benz plant in Delaware.
The customer needed a coating that had all the attributes listed here, which normally require significant tradeoffs. Our scientists discovered how to reduce the molecular weight of the polymer coating and increase the concentration of solids so that it behaves more like a low viscosity liquid. The industry standard is 50 percent solids. We introduced a 65 percent solids coating with several improved properties. This breakthrough enables formulation of product with less solvent than conventionally used for thinning and dispersing the product. Therefore, less VOCs.
Launched in the spring of 2002, this innovation immediately lowered VOC emissions on the clearcoat production line by more than 25 percent in addition to eliminating more than 80 percent of the Hazardous Air Pollutant emissions from the complete topcoat process. The technology also reduced odors from the painting process by 50 percent. These improvements helped the DaimlerChrysler facility meet new permit requirements one year early, therefore creating significant value.
In product lifecycle assessments, the new super solids product compares favorably with powder coatings with regard to energy usage and emissions. But "super solids" can be sprayed on using existing paint equipment and auto and assembly plants can save up to $20 million that would be needed to convert to a powder coating line. Early in March this year, this new DuPont technology received the U.S. Environmental Protection Agency's Clean Air Excellence Award.
Another area in which we are integrating our technological strengths to make a contribution to sustainability is fuel cells. We are focusing on proton exchange membrane (PEM) fuel cells used in portable, stationery and transportation applications. Fuel cells are a natural fit for DuPont technology. More than 50 percent of a PEM fuel cell stack – the real transactional center of a fuel cell – can be made from DuPont materials. Our advanced materials such as Nafion® perfluorinated membranes have been used in fuel cells for space travel for decades, along with components such as membrane electrode assemblies (MEAs). We are working on other components such as conductive plates and we are active in the development of hydrogen and direct methanol fuel cell technology.
We are currently working with Asia Pacific Fuel Cell Technologies to commercialize PEM fuel cells for the Taiwan electric scooter market to reduce dependence on oil and improve air quality and noise pollution.
DuPont Electronic Technologies has established a leadership position in the development, manufacture and sale of conductors in photovoltaic panels used for generating electricity from sunlight. Our Solamet family of P-silver conductor pastes enables our customers to improve panel efficiency. Panel efficiency is critical to driving opportunities for photovoltaics as a practical source of energy in remote villages that are off the grid in developing countries. It is also essential to increasing use of solar technology in developed countries that seek a clean, environmentally friendly energy source.
Our global sales of these products achieved double-digit growth in the past two years. Last year, photovoltaic panels made with DuPont conductors generated enough electricity to power the equivalent of 10,000 homes, with efficiency improvements translating to annual energy cost savings of more than $1 million.
We supply a wide variety of products as essential components of solar panels. Our Solamet® family of silver and aluminum pastes is used for metallization of solar cells. DuPont High Performance Materials supplies fluoropolymer film and sheets. Sold under the trade names of Tedlar® (for FEP and PFA films) and Tefzel® (for ETFE films), they are used as backing laminate in solar panels (Tedlar®) and as solar shingle cover sheet (Tefzel®). DuPont Packaging and Industrial Polymers supplies EVA resin sold under the trade name Elvax to make encapsulant front cover laminate in solar panels.
Another example of growing a business while reducing environmental footprint, are DuPont's lead-free defogger compositions for use in rear window defrosters. DuPont Microcircuit Materials has sold conductors for rear window defoggers for years. These compositions used lead to promote proper glass flow characteristics. Government legislatures all over the world have been discussing plans removal lead from automobiles by the end of the decade. The replacement of lead in defogger compositions required that the chemical and physical properties of lead be replicated with environmentally and inherently safe inorganic compounds. Two years ago DuPont introduced several lead-free compositions that demonstrated lead-free defogger compositions could perform well.
Our lead-free systems are growing at a rate of 20 percent annually, and this year will be used on approximately 8 million automobiles worldwide. Our lead-free compositions eliminate disposal concerns for automotive rear windows at the end of vehicle life. They also eliminate exposure to lead by individuals engaged in the recycling process.
My next example is a program we embarked on five years ago to demonstrate that we can use our technical innovation power, coupled with a partner's capability in engineering enzymes, to make bulk chemicals and fibers cost effectively. Our goal was to produce a specialty fiber, polypropylene terephthalate (3GT), which we branded as Sorona®.
Sorona® incorporates many of the properties of nylon, polyester and Lycra®, resulting in softness, vibrant color, UV and chlorine resistance, stain resistance, and stretch and recovery. Market tests show that consumers find this combination of functionalities very attractive. Our objective was to produce this material sustainably. To do that, we turned to biotechnology.
Chemical routes to 3GT fibers use chemicals such as ethylene oxide and carbon monoxide and are subject to the environmental problems of a typical chemical process. We wanted to start with a low-cost renewable resource – in this case, glucose, which is derived from maize through the corn wet milling process. So far, no one has discovered a single microorganism that can convert glucose to 1,3-propanediol. However, there are organisms that convert glucose to glycerol and other organisms that convert glycerol to 3G. Working with our research and development partner, Genencor International, we combined genes from two different organisms into one E. coli host. The result is an ability to make this key monomer in one step.
First attempts resulted in very low yield. Working with Genencor, we genetically modified an enzyme to obtain a 120X improvement in yield over five years. We scaled up the process and currently operate a pilot plant.
The biological route to 3G prompted the U.S. Department of Energy to grant $38 million over four years to DuPont, Diversa, National Renewable Energy Library, Deere and Michigan State University to use the bio-mass from our 3G process as fuel.
Our target is to demonstrate the concept of an integrated corn-based biorefinery (ICBR) that will convert corn and corn stover into fermentable sugars for parallel production of chemicals such as 3G and fuel ethanol. The ICBR encourages a new business model for sustainable production of chemicals. Evolving from current trends in the formation of cooperatives to produce ethanol, rural developments could greatly benefit from the success of an ICBR. The technology will be considered successful if we demonstrate lower capital investment, lower use of petroleum, a reduction of greenhouse gases, and a return on investment greater than 10 percent.
The future may see many such biorefineries using renewable resources to generate fuel and value-added chemicals. The familiar petroleum refineries we see in the world today require non-renewable raw materials, and generate emissions and waste. The biorefinery concept holds potential benefits for industry, the environment and rural communities, all in one sustainable technology.
As DuPont moves into the 21st Century, we expect a dynamically changing set of environmental issues. From a focus on pollution prevention, waste disposal and greenhouse gases, we know that our attention will eventually be drawn to biological threats, to toxic effects of nanoparticles, to security issues, and to other derailers of sustainability that we haven't encountered yet.
Regardless of the challenges, science and technology will be central to developing a sustainable world. There will be no technological "quick fix." Any new technology development that addresses an environmental issue must have attractive economics for it to take hold in society. It will take strong partnerships between government, industry and communities – and between innovative companies – to achieve the promise of sustainable growth.
With that, let me close. The challenge/provocation I leave with each of you is to consider what your science is contributing to the notion of Sustainable Growth – to building a smaller footprint.
04/27/03
John C. Hodgson