Tuesday, August 31, 2010

Dow Chemicals CSR Report 2009

I recently reviewed the Dow Chemical Company CSR Report for 2009 for the CorporateRegister.com website. The most significant thing about this report, aside from it's content, is it's structure. Here is the first section of the  review as it appears in the CorporateRegister.com Expert Review section:

The Dow Chemical Company is a diversified chemicals manufacturer with specialist expertise in the electronics, coatings, plastics, health and agricultural sciences fields and more. The company operates at 214 sites in 37 countries around the globe, employing over 52,000 people and netting nearly US$45 billion in sales turnover. A veteran reporter, Dow published a first Environmental Report back in 1997 at a time when reporters were true pioneers. The uniqueness of Dow's reporting is that not only is it written in accordance with the GRI guidelines, it's actually named after the GRI framework and called a "Global Reporting Initiative Report", following the flow of GRI disclosures and indicators point by point and question by question (with the addition of a "GRI Read me first" section which provides highlights of Dow's sustainability activities during past years).

Aside from the GRI's own reports, I don’t recall seeing many others structured in this way. There are upsides and downsides to this approach. The upside is the absolute clarity and discipline with which the report is written, which adds much to its credibility. The downside is that Dow's overall predominant value contribution to global sustainability gets lost. Dow has apparently considered what issues are most material for the company and has translated these into Sustainability Goals to the year 2015, which, due to the structure of this report, are best reviewed as a group of goals on the Dow website. Exactly how these goals were developed, and whether they are the result of a structured materiality analysis, is unclear. In fairness however, Dow presents the most comprehensive set of quantified goals, described in plain language, that I have ever seen. They are grouped in three focus areas: Collaborate, Innovate and Elevate. The goals include: Local Protection of Human Health and the Environment, Contributing to Community Success, Product Safety Leadership, Sustainable Chemistry, Breakthroughs to World Challenges, Energy Efficiency and Conservation and Addressing Climate Change. I am just missing a goal related to the Dow workplace, but this is impressive nonetheless. However, in my view, what this report gains in credibility as a result of rigid tick-box style application of the GRI framework, it loses in terms of focus, resulting in a kind of fragmentation of the real Dow story. With an organization of this size, scope and diversity, the highlighting of some key material themes, with case studies and more in-depth exploration of impacts, would have brought a little life to this report.

This rigid structure, together with the impersonal nature of the report (only one photo of the Chairman and none of employees or any other stakeholders)  made me think of comparing the Dow report to a chemistry experiment - sterile laboratory conditions, detailed lab notes, exact measures of all materials, a process conducted in perfect sequence and an output which delivers a predictable result. A CSR Report is, after all, not just a report. It is a story. A story of how PEOPLE are doing sustainable business. Even chemistry labs need people.

However, my review concludes that:

Dow appears to have integrated a sustainability mindset into its core business, with product development driven with sustainability aspects at the fore, such as solar solutions and photovoltaics, water solutions for sustainable drinking water, a system to reduce usage of solvents and much more. The company seems to be doing great at sustainability. Now it's time to put the chemistry set back in the box and take a broader view of how the company's reporting can serve a wider range of stakeholders and truly assist Dow in leveraging its core sustainability strengths and key material issues.

If you want to read the full review, complete with my recommendations for The Dow Chemical Company's future reporting, go to CorporateRegister.com. But don't just take my word for it, take a look yourself  and send DOW your feedback :)

elaine cohen, CSR consultant, Sustainabilty Reporter, HR Professional, Ice Cream Addict, Author of CSR for HR: A necessary partnership for advancing reponsible business practices . Contact me via www.twitter.com/elainecohen  on Twitter or via my business website www.b-yond.biz/en  (BeyondBusiness, CSR consulting and Sustainability Reporting firm)


Lavinia Weissman said...

I am going to dig into this report myself tomorrow.

A few questions appeared for me

1. Where are they in finding substitutes for chemicals that are hazardous?

2. Given they are in the chemical business, what are they doing for occupational health to protect their employees?

3. More important for me right now, Dow acquired Union Carbide, which means they acquired a company that was responsible for the death of 15,000 people as a result of the Bhopal disaster. Given the BP Oil Spill and their acquisition of Union Carbide how are they approaching business to exercise precaution with regard for all stakeholders and the regions in which they manufacture?

Ben said...

I agree Lavinia, the key issue for me is Union Carbide and Bhopal. It needs to be addressed, specifically and at length, and until this happens their CSR reporting will for me ring hollow.

Lavinia Weissman said...


Thank you for commenting here. I would like to see a discussion ensue on measuring CEO and Director performance for exercising precaution.

The new Deloitte UNGC framework asserts that Leadership methodology cannot be the only focus in sustainability. I agree on that.

This is why I teach social network analysis as part of my coaching and organization methodology.

I do believe at this time the greatest gap in CSR continues to be the inability of Executive Officers to lead initiatives with an understanding of how the social network integrates sustainability as a market (not organization) strategy.

Yet CSR traditionally has viewed market skill from the perspective of PR and communications.

The United States as a country is culpable in my opinion for not demanding the resignation of the Union Carbide CEO, which was very different from our response to BP asking for Hayward's resignation from BP. This time the US was harmed directly, but the US and Union Carbide protected its CEO, Warren Anderson by supporting his escape out of Bhopal. The harm was not US territory.

And yes it was a different time and a different President.

That said, any country is culpable for not building a bridge between industry, government and local regions to exercise precaution.

You cannot exercise precaution for safe chemical practices without realigning conversations in the social network that are far more complex than how we now view "stakeholder engagement,"

The UNGC has been inspiring to me for how communities of practice are emerging to make these changes.

Personally, I see a high business benefit opportunity in forming safe chemical practices to exercise precaution that has to be addressed.

The less than satisfying response of "sweeping problems under the rug" will continue and translate to cover ups of responsibility through mergers and acquisitions.

Genzyme right now is preparing to deal with a possible hostile take over by Sanofi Aventis. Genzyme has been battling for years the gap of understanding of value of knowledge management as a practice of sustainability to build and invest in its human capital to broaden the success of their research and development agenda using strategies to track and share knowledge practices that they can easily harvest from documents they are required to complete for FDA, Sarbanes Oxley, and systems of compliance.

This is in part reflected in the decrease of their stock value and the fact that BioPharma overall is losing 50% of its $260+Billion profit margins due to the changing world.

In a triple bottom line scenario Genzyme could become the GE or the Walmart of Biopharm reorganizing itself into a sustainable economy by building initiatives core to its products, market and purpose that go beyond claiming "green" by building a new GREEN Building. The new agenda for sustainability for chemical and biopharm industry has to adopt a platform based on occupational, geography and patient health.

In my opinion, Dow needs to look at itself closely as well and tear apart a sustainable agenda that is not obvious to the eyes of consumers related to what dust they hid with merger acquisitions.

Elaine, again thanks for featuring this report. After reading the Danisco report that you consulted to, I have to say you and I are very aligned.

Just as you look to the "ingredients" of what makes a good report, I look to the ingredients of the social network and hidden history to make sense of a new agenda for sustainability that reflects and clearly presents a need for that agenda to be led by the Directors and CEO and translated as investment into the social network from an economic view.

Lavinia Weissman said...


Thank you for commenting here. I would like to see a discussion ensue on measuring CEO and Director performance for exercising precaution.

I have a much longer proposition and response to offer here, so I will set up my response at my blog and link it here.


elaine said...

hi lavinia and ben... actually, I confess to struggling with this a little. Dow bought UC 2 years after Bhopal. Does this mean they bought responsibility for Bhopal? Clearly, as a big player, exercise of precaution is critical and I agree, not everything will show up in CSR reports. However, there does appear to be a good degree of systematic approach to responsible practice in the Dow report.

Thanks both for reading and comenting, elaine

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