Dow Chemical

Wal-Mart stayed on top as its sales crept closer to half-a-trillion dollars. Apple moved into the top five. And UnitedHealth Group continued its steady climb. 

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Dow Chemical (DOW): Company Profile, Stock Price, News, Rankings

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Dow Chemical | Fortune

Dow Chemical (DOW): Company Profile, Stock Price, News, Rankings | Fortune

Michael Regan, 16th Administrator, U.S. Environmental Protection Agency Moderator: Jeffrey Ball, Scholar-in-Residence, Steyer-Taylor Center for Energy Policy and Finance, Stanford University; Co-chair, Fortune Global Sustainability,  Andre Argenton, Chief Sustainability Officer and Vice President, Environment, Health and Safety, The Dow Chemical Company Jon Chorley, Chief Sustainability Officer, Oracle Kim Marotta, Global Vice President, Environmental Sustainability, Beam Suntory Moderator: Jeffrey Ball, Scholar-in-Residence, Steyer-Taylor Center for Energy Policy and Finance, Stanford University; Co-chair, Fortune Global Sustainability Forum, Vinod Khosla, Founder and Partner, Khosla Ventures Moderator: Molly Wood, Founder and CEO, Molly Wood Media; Co-chair, Fortune Global Sustainability Forum

Global Sustainability Forum 2023 

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Michael Regan, 16th Administrator, U.S. Environmental Protection Agency Moderator: Jeffrey Ball, Scholar-in-Residence, Steyer-Taylor Center for Energy Policy and Finance, Stanford University; Co-chair, Fortune Global Sustainability

What are the biggest business opportunities in the transition to clean energy? What are the short-and long-term bets companies should be making today? 

[MUSIC PLAYING] You run a petrochemical company. And I'm sure there's some people out in the audience who are saying, what the heck is he doing here? I thought petrochemicals were the problem, not part of the solution. How do you respond to that? Well, petrochemicals enable a lot of things that we do every day to be more energy efficient. So if you can imagine, the products that we make typically have two to three times the impact on greenhouse gas reduction then the materials we use to make them-- insulation materials, for example, light-weighting automobiles, making packaging lighter-weight and stronger-- eco-friendly products that you use every day. So there's a lot of what we do that really goes into a more sustainable economy. But you're seeing a reaction out there. We had an interesting story in the magazine about Ball Corporation, how well they've done in the last year. Because people are moving from plastic bottles to aluminum bottles. You're seeing a kind of anti-petrochemical mood in the public. Right. We see moves like this from time to time. The move that's been made over the last decades to plastics has been because it's the most sustainable and environmentally-friendly package that's out there. It's easy to say "shift back to aluminum" because you don't like the plastic waste issue. But aluminum requires 60% more energy and gives off 60% more greenhouse gas emissions to produce aluminum or recycle aluminum than plastics. If you go to steel or glass, it's even more. And so I think what you're dealing with is the emotional response to the plastic waste issue-- which we all agree is an issue that needs to be tackled-- versus the real response, which is if you want to get to circularity, let's get to circularity with these materials. And we can do it in a more efficient way. I want to get back to the plastic issue in a minute. But can you talk about some of the other things you're doing? You've taken this sustainability commitment very seriously. I read through your sustainability report. You have a lot of different projects going on that you think contribute. We have a tremendous number. If you look from a sustainability standpoint, the things that are very important to us-- obviously, climate change. We are a big user of energy. And so we do emit greenhouse gas. And so getting those emissions down and using new technology to do that is a big change for us. Putting circularity into the economy-- so, making sure that all the products that we do make have the potential to be recycled. And then working on the projects in the communities to help actually recycle them. Looking at eco-friendly products-- so, I'm not talking about everything being bio-based. But I'm talking about using chemistry that's cleaner to make some of the materials that you use everyday-- chemistry that's effective but maybe not as toxic as some of the historical chemistries that have been used. And then, obviously, dealing with the plastic waste issue and dealing with the infrastructure that's needed, really, to keep up with the consumption of this world plus the consumption that's going to come when we have another billion and a half people coming onto the planet. Do you ever get questions from your board of directors saying, hey, why are you spending 25% of your time on this recycling stuff? We don't make our money off of recycling. Actually, our board has spent more time this year on climate change and plastics recycling than just about anything else we've done. They believe that it's a purpose that we have to tackle. They have believed it for a long time. And so that sustainability report that you've got is not just the culmination of last year's work. This is our third decade of putting out these long-range sustainability goals. The first decade was really dealing with our operations footprint just inside the fenceline. The second decade started to deal with how our products perform. And the third decade is, how do we design a blueprint for a society that can be more sustainable and more circular? They're completely supportive of it. I would also say the financial market is changing as well. You start to see the importance of ESG financing, ESG reporting coming into play now. And that sustainability report you've got is not only aligned to the UN's sustainable development goals, it's GRI reporting methodology and it's third-party audited. So I think it's a best-in-class example of what ESG reporting can be. Do you ever see-- or does your board ever see-- any tension between pursuing that social purpose and pursuing profit? I don't think tension-- I think our view is you have to do both, right? You can't be a stock on the New York Stock Exchange and not pursue profit. But you have to challenge yourself to say, I have to do both. I have to pursue profit but I have to run a business that's long-term sustainable. And if that plastic waste issue is an existential threat, how do I tackle that and still maintain my business. Because that will get you in the long-run. And you have to change the business model. You have to change the types of materials. So for example, one of the first challenges I would give to my plastics business people is 100% of everything you make needs to be recyclable. That's a big goal. That doesn't necessarily mean it's going to get recycled. Now we've got to go work on what happens at the local level to make sure that it actually gets collected and gets recycled. And when you get into that mode, you're dealing with existing systems that are out there today-- sometimes that work against you. So sometimes when you're recycling gets collected curbside in the states or maybe in Europe, you think it's going to be recycled. But what you find out is the most expedient thing to do is to landfill it or to put it on a ship and ship it somewhere else. That isn't addressing the issue. So we have to step up and address the issue. And if we don't, who's going to help drive that? [THEME MUSIC] 

Insights: Dow Chemical CEO - Profitability & Sustainability Must Co-Exist

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Jim Fitterling believes petrochemicals are the solution.

Dow Chemical - Profitability & Sustainability Must Co-Exist

Jim Fitterling believes petrochemicals are part of the global climate solution. (September 2019)

you run a petrochemical company, and I'm sure there's some people out in the audience who are saying, What the heck is he doing here? I thought petro chemicals were the problem, not part of the solution. How do you respond to that? Well, petrochemicals enable a lot of things that we do every day to be more energy efficient. So if you can imagine the product that we make typically have 2 to 3 times the impact on greenhouse gas reduction, then the materials we used to make them insulation materials, for example, light waiting automobiles, making packaging, lighter weight and stronger eco friendly products that you use every day. So there's a lot of what we do that really goes into more sustainable economy. But you're seeing a reaction out there. We had a kn interesting story in the magazine about Ball corporation how well they've done in the last year, because people are moving from plastic bottles to aluminum bottles. You're seeing a kind of an anti petrochemical mood in the public, right? We've seen we see moves like this from time to time, so you know the move that's been made over the last decades to plastics has been because it's the most sustainable and environmentally friendly package that's out there. It's easy to say Shift back to aluminum because you don't like the plastic waste issue. But aluminum requires 60% more energy and six and gives off 60% more greenhouse gas emissions to produce aluminum or recycle aluminum, them plastics if you go to steal or glasses, even Maur. And so I think what you're dealing with is the emotional response to the plastic wishes to which we all agree is an issue that needs to be tackled versus the rial response, which is, if you want to get to circularity. Let's get the circularity with these materials and we can do it in a more efficient way. I want to get back to the plastic issue in a minute, But can you talk about some of the other things you're doing? You've taken this sustainability commitment very seriously. I read through your sustainability report. You have a lot of different projects going on that you think contribute. We have a tremendous number. Look, if you look from a sustainability standpoint, the things that were very important to us obviously climate change, we are a big user of energy, and so we do emit greenhouse gas. And so getting those emissions down and using new technology to do that is a big a big change for us, um, putting circularity into the economy. So making sure that all the products that we do make have the potential to be recycled in them, working on the projects in the community to help actually recycle them. Um, looking at eco friendly products. So I'm not talking about everything being bio based, but I'm talking about using chemistry That's cleaner, to make some of the materials that you use every day. Chemistry that's effective, but maybe not as toxic as some of the historical chemistries that have been used and then obviously dealing with the plastic waste issue and dealing with the infrastructure that needed really to keep up with the consumption of this world, plus the consumption that's going to come when we have another 1,000,000,000 1/2 people coming on the planet. You ever get questions from your board of directors saying, Hey, why are you spending 25% of your time on this recycling stuff? We don't make our money off of recycling. Actually, our board has spent more time this year on climate change and plastics recycling than just about anything else we've done. They believe that it's a purpose that we have to tackle. They have believed it for a long time. So that sustainability report that you've got is not just the culmination of last year's work. This is our third decade of putting out these long range sustainability goals. The first decade was really dealing with our operations footprint just inside the fence line. The second decade started to deal with how our products perform and the third decade is how do we design a blueprint for a society that could be more sustainable, more circular? They're completely supportive of it. I would also say the financial market is changing as well. You start to see the importance of E S G financing E SG reporting coming into play now, and that sustainability report you've got is not only a line to the U. N sustainable development goals, it's g r. I reporting methodology at third party audited. So I think it's the best in class example of what E. S d reporting can be. Do you ever see or does your board ever see any tension between pursuing social purpose and pursuing Prophet? I don't think tension. I think our view is they have to call. You have to do both, right? You can't be in. You can't be a stock on the New York Stock Exchange and not pursue profit. But you have to challenge yourself to say I have to do both. I have to pursue profit, but I have to run a business. It's long term, sustainable. And if that plastic waste issue is an existential threat, how doe I tackle that and still maintain my business because that will get you in the long run and you have to change the business model. You have to change the types of materials. So, for example, one of the first challenge is I would give to my plastics business. People is 100% of everything you make needs to be recyclable. That's that's a big goal. That doesn't necessarily mean it's going to get recycled. Now we've got to go work on what happens at the local level to make sure that it actually gets collected and gets recycled, and when you get into that mode. You're dealing with existing systems that are out there today. Sometimes that work against you. So sometimes when you're recycling gets collected curbside in states. Or maybe in Europe. Um, you think it's going to be recycled, But when you find out is the most expedient thing to do is the land, fill it or put it on a ship and ship it somewhere else. That isn't addressing the issue. So we have to step up and address the issue, and if we don't, who's gonna help drive that?

 Andrew, not long ago, every CEO was talking about going global and all of the advantages of globalization. But nowadays, it's a completely different story, and we're hearing-- whether it's from the presidential candidates or from the American people-- that they are blaming it for losing jobs, for not getting paid enough. When you hear this, what do you say? What's happened today is the internet, automation, sensors. All the things that are creating new industries are not employing as many people as the old industries did. That's what's causing the job issue, not the trade agendas, not anything to do with labor costs. So the debate is actually off-center. And I think what America needs to do is return to the agenda of what made us great in the first place. Our innovation does drive the economy. Entrepreneurs do drive this economy. We are actually leaders in the technology space right now. Digitization has arrived. Companies like mine are becoming digital, as is GE and many others. That will create new sectors. But meanwhile, in this presidential race, they're not looking at it that way, and the presidential candidates are turning protectionist. So what does that mean for American businesses? Is this good or is this bad? I think what the presidential debates are showing us, what the presidential candidates are showing us is, populism has arrived. Because no one understands this topic at the level I've just described, people are blaming the usual suspects. And I think the presidential candidates are speaking to populism. They're going to do what it takes to get elected. When they get into office, I would hope sensibilities would arrive and would react to this intersection we just described. Business government public policy and citizenship and society needs to work out policies that will grow economies to employ people for the new economy, not the old economy. But Andrew, let's say that this anti-free trade really becomes the new reality. Our new mantra. Yeah, for whatever reasons. What do big multinational companies like Dow Chemical do? You've got factories and people all around the world. Yeah. We'll see how much legs it has. If policies take root around the world, if countries become isolationist protectionist and they start putting up trade barriers-- non-tariff trade barriers as well as tariff trade barriers-- you start allocating resources differently. That could cause you to exit countries over time. Although our assets are hard to exit because you put them in the ground. You're not going to exit them over time. But then you run them differently. And you start growing and not growing in different countries differently. If the trend is away from globalization, what would that mean for the US economy, for example? Slower growth. For the beginnings of this, probably not. You probably won't see much effect. That's why this populous agenda is so short-term-orientated. But what you'll see over time is that countries will be less willing to invest-- forward invest-- against the US economy growing because of its ability to sell goods overseas, or stop growing for a while. And this what I tell our factory workers. I say, do you realize, if you're voting for an anti-trade agenda, you're voting against your job. Well, and so that means that Dow Chemical wouldn't be hiring as much. A lot of people think that this is going to mean more jobs. You're saying less hiring. Inevitably, in the first many years of this, with all this capacity that now can't find a global market, it'll mean less jobs. It'll mean less growth inevitably. 

Dow Chemical CEO: 'If You're Voting For an Anti-Trade Agenda, You're Voting Against Your Job'

International

This is what Andrew Liveris tells Dow factory workers.

Dow Chemical CEO: Anti-Trade is Anti-Jobs

Andrew. Not long ago, every CEO was talking about going global and all of the advantages of globalization. But nowadays it's a completely different story, and we're hearing whether it's from the presidential candidates or from the American people, that they are blaming it for losing jobs for not getting paid enough. When you hear this, what do you say? What's happened? Today's the Internet automation sensors. All the things that are creating new T industries are not employing as many people as the old industries did. That's what's causing the job issue, not for trade agendas, not anything too late, because so the debate is actually off center. And I think what America needs to do is return to the agenda of what made us quit in the first place. Our innovation doesn't drive the economy. Entrepreneurs do drive this economy. We are actually leaders in the technology space. Right now. Digitization has arrived. Companies like mine are becoming digital as his G and many others that will create new sectors. But meanwhile, in this presidential race, they're not looking at it that way, and the presidential candidates are turning protectionist. So what does that mean for American businesses? is this good or bad? I think what the presidential debates is sharing us the presidential candidates is showing us is populism has arrived because no one understands this topic at the level of just described. People are blaming the usual suspects, and I think the presidential candidates are speaking to populism. That's going to do what they take to get elected when they get into office. I would hope sensibilities would arrive, and we back to this intersection We just described business. Government of public policy and citizenship in society needs to work at policies that will grow economies to employ people for the new economy, not the old economy. But Andrew. Let's say that this anti free trade really becomes the new reality for whatever. For whatever reasons, what do big multinational companies like Dow Chemical, too? You've got factories and people all around the world. We'll see how much legs it has. If policies take root around the world. If countries become isolationist, protectionist and they start putting up trade barriers, nontariff trade barriers is what tariff trade barriers you start. Adult killing resource is differently. That could cause you to exit countries over time, although our assets of heartaches, you know, because you put them in the ground, you know, connects them over time. But then you run them differently and you start growing and growing and growing in different countries differently. If the trend is away from globalization, what would that mean for the US economy, for example, slower growth, You know, for the beginnings of this, probably not. You probably won't see much effect. That's why this populist agenda is so short term orientated. But what you'll see over time is that countries will be less willing to invest forward, invest against the U. S. Economy growing because of its ability. Oh so goods overseas I'll stop growing for a while, okay? And you know, this is where I tell our factory workers. I say, You know, do you realize if you're very fun, any trade agenda, you're very against your job? Well, and so that means that Dow Chemical wouldn't be hiring which a lot of people think that this is going to mean more jobs. You're saying less hiring inevitably in the first many years of this, with all this capacity that now can't find out global market, it'll mean less jobs. It'll mean less growth. Inevitably

 Andrew, let's get an update on this historic merger between Dow Chemical and Dupont. So you've already gotten shareholder approval. So that's great. And the next step is getting approval from the regulators, both in Europe and the United States. What are you expecting? Well, we still expect to see the merger to close by year end. And that's US and Europe, of course, are key jurisdictions, as is China and a few other countries around the world. But so far, so good. And the shareholder vote being so positive from both companies is a great step forward, as you said. But what's the chances that you don't get the OK from regulators? After all, this $130 billion deal, it's big and regulators have been getting tougher and tougher on these big mergers because they're worried they're anti-competitive. Yeah, embedded in your question is the answer. It's not a $130 billion status quo. It's $130 billion that'll split into three. So you go into the regulator with remedy, if you like. So it's not got that big monolithic, oligopolistic look to it that other deals might have. And I'm still pretty confident that it's not risk free. Nothing is. But this deal will close. You do the big merger, and then shortly after that, you're going to split into three separate companies. What are the benefits of that? The synergies of coming together, a powerful $3 billion a year, the ability to actually rearrange these assets without any tax leakage, and to do all this with no premium. When you buy a company, you're paying a big premium normally. We're not doing any of that. So the shareholder benefits, win-win-win. And then the employees, they benefit by being in three growth companies. As you know, Dow and Dupont are famous for all the innovations they've done in this past century. So is there a risk that as you divide up into these separate companies, that you're not going to have that innovative edge? Absolutely totally not. In fact, growth is the driver here. The ag company will grow, the materials company will grow, the specialty company will grow. And actually, the ability to allocate resources to a few key markets, like the ones I just mentioned to grow, is one of the premises of the deal. So the innovation engine should become better, faster, more agile, more adaptive. And the culture should be synonymous with the growth industry that these are aligned to. But one could say that in this time where every company is talking about being disrupted or being a disruptor, that you want to pour all your money in as much as you can into your research and development, rather than cutting it back and dividing it up between separate companies. Actually, that's what tech startups do. They start in a niche and scale. OK? Think of us as new startups. We're actually becoming more agile, more entrepreneurial in fewer spaces by going deeper. Because we're bigger, we can scale up. You have said that this deal is going to be revolutionary for your industry. What's the most revolutionary thing that's going to come out of it? It's revolutionary because the chemical industry has over the last 20, 30 years been commoditized and actually been bought and sold many times because it's not doing R&D. We're remaking the entire sector by saying agriculture is over here. The specialty is over here. The materials are over here. It's a rebuilding of the sector, if you like, almost a reinvention of the sector. 

 Dow Chemical's CEO Is 'Pretty Confident' the DuPont Deal Will Happen

Finance

Andrew Liveris explains the future of Dow DuPont.

Dow Chemical CEO 'Pretty Confident' About DuPont Deal

and you. Let's get an update on this historic merger between Dow Chemical and DuPont. So you've already gotten shareholder approval, so that's great. And the next step is getting approval from the regulators, both in Europe and the United States. What are you expecting? We still expect to see the much too close by year end. And that U. S. And Europe, of course, the tea jurisdictions, as is China and a few other countries around the world. But so far so good in the shareholder vote. Being so positive from both companies is a great step forward, as you said. But what's the chances that you don't get the OK from regulators? After all this $130 billion deal? It's big, and regulators have been getting tougher and tougher on these big mergers because they're worried they're anti competitive. Yeah, embedded in your question is the answer. It's not a 1 30 billion status quo. It's 1 30 billion that'll split into three. So you're going to the regulator with remedy if you like. So it's not got that big, monolithic call a go ballistic look to it that other deals might have, and I'm still pretty confident that it's not risk free. Nothing is. But this deal will close. You do the big merger, and then shortly after that, you're gonna split into three separate companies. What are the benefits of that? The synergies of coming together. A powerful $3 billion a year, the ability to actually rearranged these assets without any tax leakage. And to do all this with no premium. When you buy a company, you paying a big premium. Normally we're not doing any of that. So the shareholder benefits win, win win, and then the employees they benefit by being in three growth companies, you know, Dow DuPont are famous for all the innovations have done in this past century. Is there a risk that, as you divide up into these separate companies, that you're not gonna have that innovative edge? Absolutely, Totally not. In fact, growth is the driver here. The ad company will grow, materials company will grow, especially company will grow. And actually the ability to allocate resources to a few key markets like the ones I just mentioned to grow is one of the premises of the deal. So the innovation engine should become better, faster more agile, more adaptive. And the culture should be synonymous with the growth industry of these airline to. But one could say that in this time where every company is talking about being disrupted or being a disrupter, that you want to pour all your money and as much as you can into your research and development rather than cutting it back and dividing it up between separate companies. Actually, that's what tech start ups, too. They started a knish and scale. OK, think of us as new startups. We're actually ah, becoming more agile, more entrepreneurial, in fewer spaces, but going deeper. But this were bigger. We can scale up. You have said that this deal is going to be revolutionary for your industry. What's the most revolutionary thing that's gonna come out? It's revolutionary because the chemical industry has, over the last 2030 years being commoditized and actually being bought and sold many times because it's not doing R and D. We're remaking the entire sector by saying agriculture is over. Here, specialises over here. Materials are over here. It's a rebuilding of the sector. If you like almost a reinvention of the sector

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