ADVOCACY: Sustainability is business

Cities across the world face new, interlinked sustainability challenges that are redefining the role of private sector business. AkzoNobel shares its progress in cleansing urban environments and supporting international collaboration on pressing environmental issues. By Pamela Phua, general director of Vietnam, decorative paints South Asia, AkzoNobel

According to the United Nations Chronicle, energy consumption and air pollution are two of the most critical issues for the 3.5 billion people who live in urban communities.

The World Health Organization calculates that nine out of 10 people around the world currently breathe unhealthy air, leading to pollution-related diseases that cause seven million deaths every year.

When it comes to energy – most of which is still generated from non-renewable sources – our cities are using more than ever before, with urban demand accounting for as much as 80% of global production.

At AkzoNobel, sustainability is business and business is sustainability.

We take our responsibility to depollute the paints and coatings in our urban environment seriously, and we are committed to applying these lessons throughout the supply chain to address both energy use and air quality.

We have made an ongoing commitment to invest in sustainability, innovation and society, as part of our vision for a cleaner and healthier world. The foundations of our work are built on a review of the risks and opportunities within the context of our key market segments to 2050.

This has demonstrated to us the need to leverage the latest knowledge across science and society, identify and mitigate our challenges, and develop strategies to make the future better.

For example, South East and South Asia is a market experiencing robust economic and population growth – this demands high levels of construction to meet the needs of a new middle class and rapid urbanisation.

However, as our research has identified, this also means that there is vast opportunity to pioneer new solutions.

A STRATEGY FOR CLEANER AIR

In all industries, environmental impact occurs throughout the manufacturing process, from R&D to the ultimate application of products.

When you look at the total carbon emissions in the supply chain, it becomes clear that the key to reducing our environmental impact is to work collaboratively.

To lead the change, we have assembled a cohort of 4,000 scientists who will work closely with our global customer base to push for new, suitable and sustainable solutions. Further, we are undertaking trials of our depolluting paint for launch in three megacities in India and Indonesia that struggle with severe pollution issues.

In our work to depollute air, we can now use photocatalysis to trigger chemical reactions. In this process, photoactive titanium dioxide absorbs sunlight and reacts with oxygen and moisture to generate highly reactive free radicals, which in turn can contribute to the abatement of noxious emissions from motor vehicles, and decompose harmful gases like nitrogen oxide, sulphur dioxide and VOCs.

Some impacts occur beyond the scope of our processes, with our suppliers and customers. For example, in paints and coatings more than 98% of our carbon footprint comes from upstream (supplier) and downstream (customer) activities.
Upstream, we know that the emissions from raw materials such as pigments, resins and solvents are our greatest impact, so we have joined forces with suppliers to drive the use of bio-based materials, recycled content, or raw materials produced with renewable energy.

We closely monitor the cradle to grave lifecycle of our raw materials and finished products to reduce Volatile Organic Compounds, the impact of transportation and other environmental fallout.

CREATING BETTER ENERGY

Energy is one of our single biggest expenditures – in some products it accounts for as much as 80% of our variable cost – and such overheads directly affect our bottom line.

Our renewable energy supply strategy has three focus areas: to protect our current renewable share; support cost-effective, large energy ventures; and explore commercially feasible on-site renewable energy generation.
By investing in these areas, we are securing profitability in the long term. However, in finding cost-effective solutions, we need to identify those that can withstand the test of time.

We have leveraged the power of energy to support our sustainability programme and renewables now power 45% of our requirements, meeting our 2020 target ahead of schedule. We found that in doing this we have created direct benefits for our business by lowering costs and risk, and creating new value chains.

We draw power from solar, wind, natural gas and biomass, through multiple suppliers, meaning we can depend on an extremely reliable supply with low risk exposure to power shortages, rising oil prices or changes in carbon pricing.
For example, we are sourcing power direct from newly developed wind farms, together with Google, Philips and DSM in the Netherlands.

Adding renewables to our profile also improves the sustainability of our products, helping us retain and acquire customers and find new ways of creating value for them.

In cases of oversupply, we can use existing facilities to turn electricity into green hydrogen, which can be sold to produce chemicals or as a new product. The Dutch city of Groningen is already running a pilot with two hydrogen buses, supplied by AkzoNobel.

Renewable energy is characterised by variation in supply. As we connect more wind parks and solar panels to our national grids, these swings will only become more severe and occur more often. Companies like AkzoNobel can play an important role in balancing these swings, and can even use them to create mutual benefits.

INVESTED IN TOMORROW

Sustainability is not an afterthought, it is our way of doing business. It is woven into our DNA and is a powerful means of attracting customers.

To achieve carbon neutrality by 2050, economic, environmental and social factors are accounted for in our daily work with customers; throughout the product development lifecycle and across our operations and we have three specific targets in place.

More than half our products provide sustainability benefits to those who use them, but often we must also engage in leading work beyond our own organisation.

We have allocated significant sums to the paints and coatings open innovation platform and a small yet innovative manufacturing acquisition in the UK. To drive the next wave of sustainable solutions, we will make a further investment in our innovation activities before the end of the current decade.

By 2020, we are targeting 20% of revenue from products that are more sustainable than those of our competitors, and up to 30% more efficient in resource and energy use across the entire value chain. We also aim to maintain eco-premium solutions at a sustainable 20% of revenue through 2020.

These investments are key to long-term sustainable value creation.

We know that our in-house innovation can achieve higher efficiency at lower impact, in line with our philosophy of delivering more with less.

ADDING COLOUR FOR THE NEXT GENERATION

To ensure the best ideas are developed for the benefit of future generations, we must seek out and promote diversity of thought – and that can only be done by collaborating with diverse teams.

To drive the paints and coatings industry through its next phase of modernisation, we at AkzoNobel have created a new ecosystem for innovation by launching Paint the Future; an innovation challenge with an open invitation to collaborate and turn exciting potential into brilliant reality.

This year, we will combine our global reach with the agility of thought present across the global start-up and scale-up environment, to push the boundaries of what our industry can achieve.

The aim is to connect disruptive technologies to accelerate the dynamic world of paints and coatings, based on five pillars: smart application, enhanced functionality, circular solutions, life science infusion and predictable performance.
In the first round, 1,150 members submitted 158 ideas: from turning waste into bio-oils and minerals, to using bio-based methods to capture and convert the carbon dioxide from steelworks. Other ideas used renewable and long-lasting dyes from biomass, as well as self-cleaning and air-purifying coatings.

Twenty-one outstanding start-ups were selected for the accelerator programme.

Now concluded, SAS Nanotechnologies (from the US), QLayers (Netherlands), Interface Polymers (UK), Apellix (US) and Alucha Recycling Technologies (Netherlands) were rewarded by AkzoNobel, while Octo (the Netherlands) took home the KPMG Scale-up Award.

We are committed to continued work with the recipients of these prizes, to pursue sustainable business opportunities through joint collaboration agreements.

In March this year, we launched AkzoNobel Cares, an amalgamation of our social programmes including the community programme Let’s Colour, with many repainting projects, and the Education Fund, as well as smaller, local activities.
Throughout this work, we aim to deliver shared value by helping communities, strengthening our reputation and building the pride our team members hold in the company.