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| The Interview: Chad Holliday, CEO, DuPont Issue 29 - Apr 2007 This month we met Chad Holliday, CEO of a company that is involved in all areas of the chemicals field and increasingly other products, to discuss the issues that matters to him. Besides running a multi-billion dollar business, Chad Holliday has championed environmental causes and written a book on how small, medium and large companies can improve their environmental awareness. He talks to us about the business case for environmental sustainability and the importance of accounting for and improving an organisation’s physical footprint. “It is easy to grab what we call the ‘low hanging fruit’" says Holliday, emphasising that there are certain environmentally friendly practices that any company could implement tomorrow and reduce their environmental impact right away. Not least in the areas of energy effi ciency – turning off computers when people leave the offi ce is a small but signifi cant step, for example. Many of these actions make an immediate difference but for Holliday a commitment to environmental sustainability makes business sense in its entirety. “We don’t know the effects of global warming, not even Al Gore knows” Holliday jokes, but even if it is only as bad as the most conservative of estimates, making the world a better place can only be a positive thing. Cleaner air and more green spaces are things everyone wants, he reasons. Holliday has authority to speak on the subject. After committing to reduce carbon emissions in the mid 1980’s, DuPont now boasts a 72 percent reduction. He plans to lose another 15 percent as part of DuPont’s 2015 targets. To be considered, each of the projects implemented under this scheme must earn at least the cost of capital, “so it has been good for our shareholders and good for the environment” says Holliday. He accepts that there are projects that could have recovered more than the cost of capital, and agrees that there may have been some projects that did not meet the mark, but stresses that for DuPont the green campaign makes very good business sense. Following their own success, DuPont are now helping their suppliers to reduce emissions and create positive environmental results. DuPont specify strongly that suppliers must work within the regulations for environment and safety, and even do their own policing. In the next 20 years, he expects this policy to have a higher impact on the companies down-stream than they will do within DuPont and their local suppliers, as many of these companies have already helped themselves. “A lot of it is education”, he says. For smaller companies there should not be hurdles, and organisations such as The World Business Council [www.wbcsd.org] freely shares information about its projects. Holliday is adamant that “Business is part of the solution, not just the problem”, these low hanging fruit have a payback for companies big and small, with operational effi ciencies being one of the main drivers for businesses. These initiatives are proven to work just as well here in Asia and, if technology exists to alleviate problems, it should be put into place. “This is important for our people, because how do I explain to our employees in China that I don’t care as much about them as I do about employees anywhere else…in my mind that is something that has changed the most in my experience travelling here in the last 15 years…when a citizen sees the air quality themselves and sees the water quality themselves they more insist on that.”  Problems such as greenhouse gas emissions and global warming are harder to conceptualise and understand, making them harder to communicate. Still “we are dealing with a serious problem”. “What we do know is that this universe is in equilibrium”, and he points out that the projected rise of six degrees is going to put it out of equilibrium. However, for people who are sceptical of global warming he continues, “Most of these steps are just smart things to do anyway…if we get there and fi nd out that it wasn’t a problem…we will not be in a worse off world, we are actually a better-off world”. the first steps Buildings create emissions and DuPont is “focussing a lot of our innovations on what it takes to make a building more effi cient, because we think that is going to be a bigger factor.” DuPont owns its plants and its offi ces are partly either leased or owned, and it has included them in its environmental projects. However, as a company it also emphasises environmental sustainability in its products with creations such as the heat-transferring construction material Innergain that reduced air-conditioning requirements by 30 percent in its US commercial trial. The payback period is five years, but “most buildings last far longer than that so with the right incentives it is worth installing.” Holliday notes other fundamental technologies such as smart-elevators developed by United Technologies, where energy gathered while the lift is going down is used to power the lift when going up, reducing energy consumption by 30 percent. “You just have to be smart about it…they wouldn’t have looked if they hadn’t been pushed a little bit but once they were pushed they found it….that is what we are fi nding too”. Part of the process should be to identify and unite the technology and the systems together and to “fi nd out which ones are based on real science.”
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 energy sources DuPont is currently working on a fl exible material for cars to reduce heat penetration and air-con load, which will achieve savings of “a couple of percent of mileage.” Incorporating the technology into the construction of buildings could work, due to design constraints he concedes the business case is “not quite justifi ed”, taking a strict economic analysis of solar versus grid power. However, in some locales where energy is expensive, wind and sun are becoming viable options. In terms of widespread use, Holliday says “we are still short of a major invention” in this area and maybe its going to take up to fi ve years. DuPont has one large solar installation where it has put all the metres, reports and dials in a central control station, which they then encourage scientists to visit. “We are looking for someone to have an idea”, says Holliday. After its facilities were hit by a couple of the large typhoons, DuPont found that renewable energy can also prove more reliable than grid power. Because the plant monitoring facilities around the perimeter of the plant were all mains powered, when the grid went down they no longer worked. Solar cells are now installed on all these devices as “there is a reliability of solar energy that you don’t get with others.” The future of energy is supply from multiple sources such wind, solar and more, while bio-fuel will also have a place, says Holliday. This is an important belief of DuPont, who are involved in initiatives to produce bio-ethanol from maize. Even coal has a place:“I believe that there is such an abundant supply of coal that it has to be part of the equation, we just have to fi nd a way to make it cleaner.” The fi rst step is to build new plants so that they can be easily converted. role of government For Holliday, providing incentives to innovate and reduce through taxes or credits can work as a concept everywhere in the world. Taxes can get very complicated so Holliday prefers a cap and trade system, however he acknowledges in countries with simple tax systems, like Hong Kong, a tax based incentive scheme might work. “Somehow a trading scheme has to be part of the process”, there are no easy answers “but it’s a great debate.” Governments should be doing more to establish baseline standards, including how to monitor and keep up with developments in the fi eld without creating a “gigantic bureaucracy”. While the EU is facing environmental issues, “The US is seen to be a laggard today” but if it were to become a leader Holliday believes that other countries are likely to follow suit. “It would be nice if every country had the same regulations” but he is committed to making sure that DuPont maintains best practices globally as well as working with governments and regulatory bodies to ensure both sides are informed of the other’s requirements. The phase-out of CFC gasses provides a good example of an area where industries came together, and Holliday feels the solutions required to combat the problem of climate change is a similar, only “orders of magnitude larger”. Ninety percent of experts agree that human activity is causing global warming, he says, and even if it is not, climate change is real and there is “no question” that human activity can help to reduce its negative effects. “Population of the planet has doubled in my lifetime and I’m not as old as I look”, he concludes. He urges companies to understand the strain we are putting on the earth’s systems and use technology to ease the pressure.” If I can make that elevator 30 percent more effi cient- why not do it?” it is just a matter of giving the right incentives to accelerate the process. And the model that DuPont has used seems to be working. RFP
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Key title: RFP magazine
Abbreviated key title: RFP mag.
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