Name: Dow CEO on what it takes to hit Net Zero
Uploaded: 2022-12-07
Duration: 9 min 28 s
Description: Jim Fitterling says Dow’s diverse, innovative workforce is both motivated by and driving ESG success.

Jim Fitterling says Dow’s diverse, innovative workforce is both motivated by and driving ESG success.

Dow CEO on what it takes to hit Net Zero

Leadership

Jim thank you so much for joining us to talk about your company down incorporated. You've been recognized for your leadership on sustainability and for all the progress you've made on diversity inclusion. And I'd like to get your thoughts on both of them. Let's start with sustainability. You have set a goal of net zero by 2050. How would you describe your progress so far? Well, we made a 15% reduction in our scope. One and two emissions from 2005 to 2020 at the time that we grew the business 20% and we've got a target for another 15% by 2030. And we're well on our way, we're investing a little over a billion dollars a year and we're going through all of our core assets and making new investments to have lower C. 02 footprints. Taking sites completely to zero scope one and two emissions. And it's a range of technologies, hydrogen and carbon capture in the near term. As far as small modular nuclear reactors in the long term. Well, it sounds like you've made really a lot of progress, you know, we hear from so many fortune 500 companies that are setting targets and goals for 2050. But what will it realistically take to hit zero? That's 27 years away. What have you learned in this whole process? We have to have a very disciplined consistent investment in capital. It's all for us. We're an energy intensive industry. So it's all about capital and new technologies and behind our 2050 goal our projects at every site. So I can show you the curve and show you the projects that lead to those reductions. Um, so that I feel comfortable with. I think we will get there. We're working hard on scope three emissions scope three requires us to go upstream. Our raw material suppliers are logistics providers. Those are the biggest buckets of scope, three emissions and the good news is all of them have measurements and targets. I mean 90, of them have data and 80% of them have set a target. So we're I feel encouraged by that. I think we're gonna make real progress. We're gonna need good policies to support it. And in the United States on top of what we just did with the inflation reduction act to support those technologies. We need to get to a price on carbon not not attacks but a price on carbon that incentivizes that investment to go faster. So you find this inflation reduction act that was just passed recently. The so called climate change act is going to help you to get to net definitely I mean it will continue to grow the amount of alternative energy power that's out there both in the short term with wind and solar in the long term with advanced nuclear small modular reactors. Um it will also help build the hydrogen and carbon capture hubs that we need. It will build the fuel for those small modular reactors that we need to make that happen. And we have some sites in the United States where one small modular reactor could take the entire site to net zero. So I think they're they're really spot on. Well, half your businesses and plastics which depend on fossil fuels. So right there, that's a challenge for you at how do you balance the need to grow your business and make profits for dow and at the same time, do the right thing so that you have a positive impact on the environment. Sure. I think you have to look at two things on plastics. They've grown substantially because they're very sustainable product. So if you look at their carbon footprint versus paper, glass, aluminum, uh, any other metal, they're the lowest. And that's why they've grown so fast. They're lightweight. They're easy to transport. Now. We have to work on recyclable itty, which is both an an industry challenge as well as the government challenge on being able to collect more and recycle more. The good news is consumers want it. We make products today that have as much as 70% post consumer recycled material in them. And consumer goods forum across the board have targets of 30% post consumer recycled material by 2030. So there's demand there for recycled plastics, I think it will continue to grow. So I understand that you have a new program at doubts called transform the way to collect and recycle plastics? Like you've just been talking about? Do you think that this will solve the problem and get you pretty much there or are you going to have to come up with other technologies? I think we'll have to continue to do more. We set the first target at a million metric tons per year. We called it to stop the waste target. And that idea at the time was, you know, we need to take care of our fair share of the waste that's in the environment. We're very close to being able to meet that target. There's a lot of work that goes on in food packaging, on design. Being able to design it for recycle. There are some very great food packages out there that are very complex structures today that are hard to recycle. So one of our goals internally is that 100% of everything we sell packaging customer has the ability to be recycled. You've said that to get breakthroughs on these big issues, you need talent, diverse talent and you've done a lot to diversify the workforce. What's the most important thing? If you had a single one thing, what's the most important thing you did to get the changes that you wanted, having the goals and having the commitment to achieve these sustainability goals as a fantastic hiring tool, young people coming out of college or coming from any walk of life into our business really are motivated by the purpose that that gives the company and then when they come in they've got to go to work on those projects. They've got to be able to see, I'm working on something and I have the data to show that I'm making an impact. Secondarily, we've got to create the right environment to invite people into our company. This is a very male dominated and white male dominated industry for years. So creating a more inclusive environment, which is the main job of leaders, is Set the strategy, set the goals, create the right environment and then get out of people's way and let them do their work well. The numbers show the data show that you are making progress on this. 30% of the leadership team is women and us ethnic minorities, 70% of the Dow's independent directors on your board are women or minorities. And Dow has achieved gender pay equity, which is fantastic. How do you feel about your track record and what more do you want to do? I feel good where there's more work to do. We need better representation at all levels of the company. We need more women in manufacturing. And a goal of mine is most of us that went into the industry got an opportunity that became great for our families. You know, it allowed us to make a living, but not just that, you know, pass down wealth to the next generation. We're trying to do that for parts of the population that have never had that opportunity And if we can do that, I think that's gonna be a big contribution towards closing social inequities and having a more sustainable, not just workforce, but a more sustainable community gym you've been working at for 38 years, you started straight out of college to work for the company and it was a very different company back then culturally. How would you describe the impact of having a diverse workforce today compared to back then? And also what kind of impact does it have on the business? Yeah, it's been a big transformation that was always a very international company. We used to joke join Dallas see the world. Um and today some of that is still true, but we didn't reflect the communities that we were in and we didn't necessarily reflect our customers and the people we matched up with. And I would say today we're closer much closer to being able to do that. The basic premise behind it is happy, happy employees, happy customers. And we want the environment to be one where we have an easy time hiring, we give people a chance for advancement, which is good not only for them, but for their families. Uh we create a better environment in the community. We live our values and that translates into the market share at the customers, We get more business with certain customers and it translates into financial value. Our employees are as happy as they've ever been and satisfaction surveys with their experience And um our customer experience levels are as high as they've ever been. And our attrition rate in the last two years through the pandemic is 4%. So I think we've got the right recipe. We just need to continue to make progress on these, these metrics. So I understand dow is celebrating its 125th anniversary and for four of those years you've been the Ceo. So you're part of that history. When people look back at your chapter in the history, what do you want them to describe as your legacy to do? You know when I came in, I said to the board when I was in the process of interviewing for Ceo, we put together an ambition which was to be the most innovative customer centric, inclusive and sustainable material science company in the world. So I wanted to be best in class in all four of those areas and the best investment in the material space. And I think we're well on track to do that. I'd like to be able to look back and say we delivered that goal