Back in October, DSM North America joined 80 other companies in signing the American Business Act on Climate Pledge, which was unveiled by the Obama administration in July. In signing the pledge, DSM made a commitment to cut its carbon emissions and help the world move towards a low-carbon, clean energy future. It joined companies from across the United States, representing a wide range of industries. But DSM stood out: it was a 100-year-old former coal mining company which still went by the name Dutch State Mines. The company, now branded as Do Something Meaningful, has become a market leader in renewable energy and bio-based materials, and stands as an example of how fossil fuel companies can change to become sustainable, clean and responsible.
DSM's transition to clean energy began decades ago. It closed its last coal mine in the 1970s and became a chemical company. Since then, the company has embraced clean technology, pioneering sustainable solutions across the fields of health, nutrition and materials. In the 1990s, DSM sold almost all of its commodity chemical activities to become a life sciences (nutrition and pharma) and material sciences (performance materials) company. The company accelerated this shift in the early 2000s by divesting from non-core businesses that hindered its goals of lowering greenhouse gas (GHG) emissions, increasing energy efficiency, and tying executive compensation to sustainability targets. Today, up to 50 percent of DSM's executive bonuses are tied to greenhouse gas reduction targets. If the company meets its GHG reduction goals, its leaders receive a big bonus.
It was not until the late 2000s that DSM fully devoted itself to reducing its carbon footprint and creating more sustainable products. In 2010, DSM fully divested from fossil fuels, a three-year process it first announced in 2007 when it sold its Elastomers division, which produced a range of synthetic rubber polymers. DSM successfully weaned itself from fossil fuels with a combination of acquisitions, divestitures and investments.
In 2014, DSM undertook two big projects to advance its sustainability agenda. In a partnership with POET, DSM opened the United States' first commercial cellulosic ethanol plant in Iowa, which will convert 770 tons of biomass (corn cobs, leaves, husks, and stalks) to ethanol at a rate of 20 million gallons per year. In New Jersey, DSM partnered with GeoPeak and Marina Energy to create one of the world's largest solar installations at a supply chain site, generating over six megawatts per year—enough to supply 30-40 percent of the plant’s electricity needs at peak production. The company is also engaged in research to reduce bovine methane emissions by up to 30 percent. These ambitious projects have only reinforced DSM’s new brand as a clean energy and bio-based materials company.
DSM promises that it will continue to hold a leadership position in climate action. As part of its American Business Act on Climate Pledge, the company has set the following goals:
- Reduce greenhouse gas emissions by at least 25 percent by 2020 against a 2014 baseline.
- Improve energy efficiency 20 percent by 2020. DSM is engaged in an ongoing partnership with the Department of Energy to reduce energy consumption by 20 percent.
- Move all operations on six continents to 100 percent renewable energy, with an interim target of 50 percent by 2025. DSM is one of 39 companies to have joined RE100, a global initiative to engage, support and showcase influential companies committed to sourcing 100 percent renewable power.
- Maintain an internal carbon price of 50 euros (about $55) per ton for investment decisions.
- Continue to tie executive compensation to meeting sustainability targets.
As a large industrial manufacturer, DSM believes tackling climate change is not only a corporate responsibility but also a business opportunity. “There is both a business and moral imperative to do something now. We as a global community cannot afford the actions of some business leaders who continue to fight and oppose all efforts to move to a lower carbon, more sustainable planet and economy,” said Hugh Welsh, President of DSM North America. The private sector accounts for more than half of the world’s energy consumption and has the power to shift the world towards a cleaner energy path. Through its ongoing, cutting-edge advancements, DSM has shown that transitioning to a cleaner economy is both feasible and cost-effective today; it just takes action.
Author: Gabriela Zayas
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