DSM stays in leader zone of Dow Jones sustainability index

22-Sep-2015 - Last updated on 23-Sep-2015 at 08:35 GMT

DSM has been named as one of its sector’s leaders in environmental prudence in the Dow Jones Sustainability World Index, but the company says it sees such lists as a means, not an end.

The Dutch firm was listed as a leader in the Materials category of the index, which measures companies’ self-reported performance against a number of criteria, from emissions and safety, and social impact criteria. The index has listed DSM as leader in its sector six times, and among the leaders on six other occasions, since 2004.

A way of keeping score

According to Fokko Wientjes, vice-president for sustainability and public-private partnerships at DSM, the company finds the index useful as a way of keeping track of its performance: “We see it as a balanced scorecard, so it doesn’t only look at our economic performance, but also gives us input factors such as how our innovation pipeline is compared to our competitors, how is the output of our innovation pipeline compared to our competitors, how we’re doing on things like human rights, on compliance, codes of conduct, that sort of thing.

“It gives you a quick measurement, it shows your strengths, your weaknesses, and helps to make sure you stay on top of things. But it’s a means – it’s not a goal in itself. The goal, of course, is to have business development that can contribute to people, to planet and to profit – that’s what a company like DSM is aiming for,” he added.

Wientjes said DSM has found it to be highly profitable to focus on becoming a sustainable business: “If I look at the profit of the portfolio we’ve set as Eco+, the profit there is higher than the rest of our portfolio, and the growth rates are higher – we had 34% of our portfolio as Eco+ in 2010, and right now it’s up to around 50%. That’s the sort of thing that proves this is the right business, going forward.”

The firm’s “Eco+” products are those it classes as having better ecological footprints than competing offerings. In the food sector, DSM lists products such as MaxiBright, a fungal alternative to bleach that is used to remove carotenoid compounds from whey, which the firm claims has a carbon footprint 80% lower than other solutions.

DSM has also begun to classify socially-conscious products, including some of its nutrition lines such as vitamin D3 or its OatWell supplement, under the “People+” banner.

Not a greenwash

Wientjes agrees that benchmarks such as the Dow Jones index have limitations, but rejects the notion that it and similar lists are just “greenwashing” exercises designed to make companies appear more environmentally friendly.

“My first response would be that I don’t care whether people call it a greenwashing exercise or not – for us, we believe they are looking at the right sort of things, and that’s why we consider it to be an interesting benchmark, and a benchmark for us to measure our performance. And yes, we of course publish it, so that we can share our performance and be transparent about it,” he said.

“But for us, the first purpose is: does it help us improve our activities? It’s such a broad questionnaire, with so many different topics, that it’s not only about green, it’s trying to capture the risks and opportunities that a typical analyst would be looking at in a company,” added Wientjes.