Insider Events
Businesses can play a role in fighting climate change.
In a live Insider event, a BASF exec said the company evaluates products’ sustainability profiles.
The CEO of Gist said measuring and tracking progress on sustainability goals is key.
Watch the full event here.
Work against the climate crisis is often most effective when it includes businesses, and not just government entities. And in the last few years, major companies like IBM and Citi have started focusing on developing sustainable business practices.
In a live editorial event, Insider’s future of business editor, Tim Paradis, spoke with Marcelo Lu, senior vice president, care chemicals North America, at BASF, and Pavan Sukhdev, founder and CEO of GIST Impact and goodwill ambassador at the United Nations Environment Programme, about how global organizations can engage consumers in climate activism. The event was part of Insider’s series Climate Heroes 2022: Working Toward Solutions, presented by BASF, which featured interviews with leaders across industries who are pioneering innovative climate solutions.
Companies should evaluate a product’s ‘whole life cycle’ in terms of sustainability
BASF, the world’s largest chemical company, manufactures products used in the personal care, pharmaceuticals, and electronics industries. BASF has made sustainability part of its organizational mission though the company, based in Germany, has also faced criticism for its environmental record. Some of the pushback relates to the company’s production, along with other chemical makers, of so-called forever chemicals that don’t readily break down once introduced into the environment.
BASF now uses the Sustainable Solution Steering method to evaluate its products’ contributions to environmental, economic, and social sustainability. BASF might achieve economic sustainability by saving customers money and social sustainability by making the product safer for customers to use, for example. The products are identified as accelerators, performers, transitioners, or challenged, depending on their relative contributions.
And through its Care 360 initiative, Lu said, BASF looks at a product’s “whole life cycle” in terms of sustainability, asking questions such as, “Is this sustainably sourced?” and “Is it sustainably used and discarded?”
Measuring and tracking progress toward sustainability goals is key
Tracking progress toward sustainability goals is critical, Sukhdev said. His company, GIST, uses data and analytics to help companies evaluate their contributions to sustainability, for example, by showing how their progress compares with their peers’. “Nowadays we really can measure,” Sukhdev added.
BASF is focusing on digitizing the supply chain, relying partly on blockchain solutions, Lu said, to create greater transparency around how products were sourced. A recent example of a BASF product whose supply chain was placed on the blockchain is palm oil, because oil palm plantations are a significant contributor to deforestation.
Partnerships between business and government organizations can drive progress
This focus on holistic sustainability appeals to the retailers BASF partners with, Lu said, who are interested in “telling the story” of a particular ingredient. “They want to use the story to brand their products,” he said, and they won’t consider using an ingredient that’s effective but has a damaging impact on the environment.
Companies, Lu said, “cannot do this alone.” He said they need stakeholders including governments, customers, and even competitor organizations.
Sukhdev cited potential challenges, including subsidy incentives. A 2021 report from the International Monetary Fund indicates that coal, oil, and natural gas received $5.9 million in subsidies in 2020.
“We are in a world with subsidies, taxes, and regulations that are pointing towards the past and not towards the future,” Sukhdev said. “We need that transition. We need that change.”