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CSR Case Study:DuPont Canada

Realizing Sustainable Growth

Final Draft

Prepared for: The Interdepartmental Working Group on

Corporate Social Responsibility (CSR)

Corporate Social Responsibility: Lessons Learned Final DuPont Case Study

1 Corporate Overview

DuPont Canada

DuPont Canada, established in 1877, is a diversified science company that produces a wide range of products including nylon, industrial yarn, synthetic fibers, polymer resins, packaging films, automotive finishes, crop protection products, and industrial chemicals. Headquartered in Mississauga, Ontario, DuPont Canada is actively living the directive of “Sustainable Growth”, under the care of Dave Colcleugh, DuPont Canada’s President and CEO. DuPont Canada currently employs approximately 4,000 employees and serves customers across Canada and in more than 40 other countries.1 The company serves global markets through a number of subsidiaries in Canada, the United States, Mexico, France, the United Kingdom and India

About 76 per cent of the common shares of DuPont Canada are owned by E.I. du Pont de Nemours and Company. The remaining shares are held principally by Canadian investors, including close to 2000 employee shareholders. E.I. du Pont de Nemours and Company operates in more than 70 countries worldwide (in North America, South America, Asia Pacific, Europe, the Middle East and Africa) and has approximately 135 manufacturing and processing facilities.

2 Business Context: The Global Chemicals Industry

The chemicals industry converts raw materials (oil, natural gas, air, water, metals, minerals) into more than 70 000 different products. Chemicals are used to make a wide variety of consumer goods, as well as thousands of products that are essential inputs to agriculture, manufacturing, construction and service industries. The industry’s linkages to a large number of sectors make it susceptible to the ups and downs of the overall economy. Globally, the chemicals industry is a $1.5 trillion enterprise, and in Canada, the chemicals and chemical products sector represents a $30 billion dollar industry.2 According to the Canadian Chemical Producers Association (CCPA), “Canada’s chemical industry is at the forefront of high technology in its manufacturing capability, workforce and adoption of innovative products and processes”. Investments in the latest and best emerging technologies have created the conditions for strong growth in Canada’s chemicals manufacturing industry, which is growing at an average annual rate of 4 percent. A significant proportion of the output of Canada’s chemicals industry is exported (roughly 55 percent).

The chemicals industry was one of the first sectors to develop a comprehensive and systematic approach to managing environment, health and safety issues. This is due in part to having come under greater and earlier public scrutiny than other industries. For example, public confidence in the sector came into question with the publication of Rachel Carson’s book Silent Spring, which focused on the potential ecological and human health effects of synthetic chemicals. Significant 1 DuPont Canada’s 2001 Sustainable Growth Report. Creating Value and Doing Good. 2 Hhttp://www.eia.doe.gov/emeu/mecs/iab/chemicals/H and Hhttp://www.ccpa.ca/english/position/concerns/index.htmlH

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public scrutiny was also drawn to the sector after the disastrous gas release of methyl isocyante at Union Carbide’s insecticide plant in Bhopal, India. These and other concerns about the potential ecological and human health impacts of chemicals brought the safety of the industry as a whole into the global spotlight and resulted in an erosion of public trust and confidence.

The chemicals industry responded to this erosion of public trust and confidence by establishing the Responsible Care program, which is founded on the principles of commitment, innovation and continuous improvement.3 This program, which was first developed by CCPA in Canada, has now become the international standard for stewardship in the chemical industry, and it is now practised in over 40 countries.4 Responsible Care integrates the management of environment, health and safety issues, and places a special emphasis on community awareness and emergency response. All member companies of CCPA are required to follow the Responsible Care standard into their day-to-day operations. Responsible Care utilizes a life cycle approach to managing chemicals, and consists of six management codes: 1) Community Awareness and Emergency Response (CAER); 2) Research and Development; 3) Manufacturing; 4) Transportation; 5) Distribution; and, 6) Hazardous Waste Management.

Public concerns over chemicals have also had a hand in the drive to establish right-to-know acts in some jurisdictions which established strict requirements for national, regional and local governments, and industry regarding emergency planning procedures and “community right to know” reporting on toxic chemicals used by companies. Right-to-know acts significantly increased public access to company information and have led to increased demands from the public and civic groups for information on the nature and quantities of industrial chemicals released into the environment. A number of mandatory reporting programs such as the Toxics Release Inventory (TRI) in the USA and the National Pollutant Release Inventory (NPRI) in Canada grew out of the right-to-know movement. These inventories, which are more generally known as pollutant release and transfer registries, are publicly accessible databases on toxic chemicals developed and maintained by the federal governments in both countries. A number of countries around the world maintain similar mandatory or voluntary pollutant release and transfer registries.

Responsible Care, right-to-know legislation and mandatory reporting requirements were significant drivers for the chemicals sector to become better corporate citizens. As a consequence, chemical and petrochemical companies, generally speaking, tend to be farther along the learning curve than some other sectors in terms of the environmental aspects of corporate social responsibility.

In its report5 to the World Summit on Sustainable Development, the International Council of Chemical Associations (ICCA) identified four major issues facing the sector today: 1)

3 Responsible Care: The Codes of Practice. Canadian Chemical Producers’Association. Hhttp://www.ccpa.ca/english/who/rc/H 4 Responsible Care: Who We Are. Canadian Chemical Producers’Association. Hhttp://www.ccpa.ca/english/who/rc/\H5 International Council of Chemical Associations. 2002. Industry as a Partner for Sustainable Development: Chemicals .United Nations Environment Programme. Hhttp://www.uneptie.org/outreach/wssd/contributions/ sector_reports/sectors/chemicals/chemicals.htmH

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globalization; 2) safety: process, products, people; 2) capacity building on chemical safety; and, 4) innovation.

With respect to globalization, key issues identified in the report include the need to maintain high standards on environmental, health and safety as the chemicals industry expands into global markets, the sound management of chemicals and trade and investment policies.

On the safety front, the report notes that the sector must continue its adoption of Responsible Care (it is now in 46 countries) and meet increasing demands for information on chemical substances.

In the area of capacity building on chemical safety, the ICCA suggests that the sector must continue its dissemination of information and knowledge about chemicals and their safe use. The targets for this information are not only chemical companies but also joint venture partners, suppliers and customers.

Box 1: DuPont’s Global Commitment to Safety, Health and the Environment We will conduct our business with respect and care for the environment. We will implement those strategies that build successful businesses and achieve the greatest benefit for all our stakeholders without compromising the ability of future generations to meet their needs. We will continuously improve our practices in light of advances in technology and new knowledge in safety, health and environmental science. We will make consistent, measurable progress in implementing this commitment.

According to the ICCA report, technological and social innovation can do much to improve quality of life and address the depletion of resources and the build-up of pollution around the world. The report sees a key objective for the sector in developing new manufacturing processes that will reduce risks to human health and the environment, and in working with customers to meet demands for more sustainable products. They note that these innovations will require more investment in research and development.

3 DuPont’s Journey towards Sustainable Growth

Change is part of DuPont's culture

Evolving and adapting to meet changing societal expectations has been an important part of DuPont’s culture. Both the parent company and DuPont Canada have demonstrated an ability to adapt to changing circumstances, which can be attributed to the importance of science in the company’s business model, with its emphasis on discovery. The ability to transform and reinvent itself several times during its history is an important reason why DuPont continues to be a competitive global company two centuries after its founding.6 In 2002, the company celebrated its 200th anniversary and it has changed its business portfolio significantly since its inception in 1802. 6 The DuPont Story. Global DuPont Website. Hhttp://www.dupont.com/corp/overview/anniversary/story.htmlH

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DuPont’s first major product was explosives. Not surprisingly, safety has been a high priority for the company since its inception. According to Rhonda Carlin, DuPont Canada’s Business Sustainability Resource, the company would probably not be celebrating its 200th anniversary if it had not started out by emphasizing safety in the manufacture and use of its products, and by instilling safety early on as a core value of the company.7 DuPont and DuPont Canada have some of the best safety records in the world and are committed to evolving their business portfolios while staying true to their safety ethic and values. Over the years the company has transitioned from making explosives to manufacturing industrial chemicals and products, and is now striving for less material intensive, and more knowledge intensive, products and services.

Setting Aggressive Environmental Goals

Box 2: Environmental Goals of the 1990s

Reduce total discharges (excluding CO2) by 50% by year 2000 based on 1990 discharges to air, land and water. Eliminate or render harmless all toxic emissions to the environment by 1995. Reduce the energy intensity of our operations by 25% by year 2000 based on 1990 energy intensity. Re-established in 1996 to reduce an additional 15% by 2005. Improve our manufacturing operations by establishing robust audit processes. Reduce uncontrolled releases to the environment. Establish community dialogue processes at all of our manufacturing sites.

A major turning point for DuPont in its efforts to address its environmental footprint came in 1988 when Greenpeace named the company “Number One Corporate Polluter” in the USA. Greenpeace representatives scaled one of the company’s stacks at its New Jersey facility and hung a huge banner that read “DuPont Number One Polluter” to draw media and public attention to the company.8 At this point, DuPont asked itself a serious question, “Even though we comply with environmental laws, is this where we want the company to be?” And the answer was no. The company acknowledged that in spite of its compliance record, it was still a significant polluter and that something could be done. The event marked the beginning of an enormous effort to reduce the company’s pollution and reduce its overall environmental footprint. DuPont developed a Global Commitment to Safety, Health and the Environment (See Box 1) and laid out a number of actions that would help the company achieve its global commitment to reduce its environmental footprint.9 DuPont Canada also shares the same commitment to global health, safety and the environment. To fulfill this commitment to safety, health and the environment, the company states that it will:

• Adhere to the highest standards of performance and business excellence;

• Aim for the goal of zero injuries, illnesses and environmental incidents;

7 Personal Interview with Jennifer Hooper, Rhonda Carlin and Colleen Brydon. Dupont Canada Inc. July 18th, 2002. 8 Bonda, Penny S., “Follow the Leader”. HGreen@WorkH magazine. July/August 2002. 9 DuPont Canada. Studies in Sustainability: Report 2000, Safety, Health and the Environment. Global Commitment to SH&E taken from Inside Cover.

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• Drive toward zero emissions and zero waste generation;

• Excel in the efficient use of energy and natural resources, and manage lands to enhance wildlife habitat;

• Continuously improve processes, practices and products to reduce risk and impact throughout the product life cycle;

• Promote open and public discussion of environmental issues and build alliances to develop sound public policies and regulations; and,

• Educate, train and motivate employees and executives to comply with the environmental commitment, and provide accountability by reporting regularly to the public.10

DuPont Canada advanced its commitment to environmental improvement even further when it set a number of very ambitious environmental goals in 1990 that were to be achieved by the year 2000 (Box 2 reviews the environmental goals).11 The environmental goals were groundbreaking for the time, and many employees of the company were sceptical that they were achievable. Despite these early misgivings, the company not only met its targets, but in many cases, exceeded them. As an example, many employees of DuPont Canada felt in 1990 that reducing total emissions by 50% in 10 years would be difficult to achieve. However, DuPont Canada reached that goal, and by the year 2000, had achieved an 85% reduction in all emissions other than carbon dioxide.12

The success in meeting these environmental targets has been attributed, in part, to the problem-solving work environments at DuPont Canada.13 The company excels at envisioning where it wants to be as a company, and is not afraid to "think big" when it devises strategies to achieve its vision. This goal-setting approach is somewhat unique in the corporate world and with it comes some bold risks. When DuPont Canada publicly commits to meeting specific environmental, economic and social goals in its annual Sustainable Growth Reports, it opens itself up to scrutiny from all stakeholders.

Today, Dupont Canada has committed itself publicly to achieving Sustainable Growth, which it defines as “increasing shareholder and societal value while decreasing the company's environmental footprint”.14 The company is committed to being a responsible corporate citizen and is recognized as a leader for its progressive environmental and social programs. The company is building upon its success in environmental performance and in 2000 developed new Sustainable Growth goals, pursuits and targets for 2010, which include goals related to economic prosperity,

10 DuPont Canada, Studies in Sustainability: Report 2000, Safety, Health and the Environment. Additional commitments taken from Inside Cover. 11 Presentation from Jennifer Hooper, Rhonda Carlin and Colleen Brydon. Dupont Canada Inc. July 18th, 2002. 12 Taken from the President's Message. DuPont Canada’s 2001 Sustainability Report. Creating Value and Doing Good. 13 Personal Interview with Jennifer Hooper, Rhonda Carlin and Colleen Brydon. Dupont Canada Inc. July 18th, 2002. 14 DuPont Overview. Sustainable Growth. Global DuPont website. Hhttp://www.dupont.com/corp/overview/glance/sus_growth.htmlH

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societal value and environmental responsibility. All major business units were involved in the exercise of setting the 2010 Sustainable Growth pursuits and metrics. DuPont Canada believes it is important to have as many employees as possible involved in the setting of sustainability targets, to ensure that employees are motivated and empowered to meet or exceed the targets that are set. The company is currently developing its own strategies to meet the new 2010 goals. These will be discussed in more detail in Section 4 below.

Senior level commitment to sustainability within the company has been a major factor in the company’s ability to advance its Sustainable Growth mission. Dave Colcleugh, DuPont Canada’s President and CEO, and Charles Holliday, CEO of the parent company, have been key supporters and vocal advocates for sustainable development in many arenas. DuPont Canada’s new President and CEO effective January 2003, Doug Muzyka, shares the same vision and commitment.

DuPont and the Global Compact

DuPont sees value in being a role model for sustainability and subscribes to and endorses a number of international codes of conduct or principles related to sustainability and corporate social responsibility. For example, the parent company has endorsed the United Nations Global Compact, citing that “DuPont's core values of innovation and discovery, safety and environmental stewardship, integrity and high ethical standards, and treating people fairly and with respect meet and in many respects exceed the goals embodied in the values set out in the Global Compact”.15

UN Secretary-General Kofi Annan launched the Global Compact on January 31st, 1999, to foster good corporate citizenship among global corporations. The Secretary-General recognized that corporate responsibility was an emerging business trend but believed there was no international framework to guide companies in the development of CSR strategies and values.16 The Global Compact is a voluntary initiative and is based on nine principles in the areas of human rights, labour and environment. The Compact asks companies to integrate these nine principles into core business practices and to demonstrate projects or activities that contribute to the principles on an annual basis.

On April 30, 2001, in a letter to Kofi Annan, DuPont endorsed the Global Compact. In his letter of endorsement, Chad Holliday stated, “As with other commitments at the principle level, we will develop implementation actions that are consistent with DuPont policies and practices. However, we also expect that our association with the UN and other Global Compact companies will provide the opportunity to learn and leverage the best practices of others”.17

15 Global DuPont Worldwide Website, Hhttp://www.dupont.com/corp/news/position/global_compact.htmlH16 About the Global Compact. www.unglobalcompact.org/ 17 Global DuPont Website, Hhttp://www.dupont.com/corp/news/position/global_compact.htmlH

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DuPont’s endorsement of the Global Compact is a good example of the company’s desire to be a leader. It chooses to align with leading organizations that are in front of the learning curve on CSR and sustainability. DuPont is taking an active role in addressing climate change and has partnered with the World Resources Institute, Environmental Defense, and the Pew Center for Global Climate Change.18 Chad Holliday, global DuPont’s CEO, is former chairman of the World Business Council for Sustainable Development and in this capacity, he co-chaired the WBCSD's study on Sustainability Through the Market with John Pepper, Chairman of Proctor and Gamble.19

4 DuPont Canada’s Vision of Sustainable Growth

DuPont Canada's Health and Safety, Environmental Excellence, and Sustainable Growth activities have often been recognized as best practices by the parent company in speeches and other public events. E.I. du Pont de Nemours & Company (the global DuPont company) has presented DuPont Canada with Sustainable Growth Awards each year since 2000 for various sustainability initiatives including greenhouse gas emission trading and various recycling programs at DuPont Canada’s Kingston facility. DuPont Canada has one of the best safety records of any Canadian industrial corporation and is the only member company to win the Excellence in Safety Awards from the Canadian Chemical Producer’s Association (CCPA) six consecutive years (1997-2002).20 DuPont Canada is proud of its individual commitments to sustainability and its vision for Sustainable Growth will be discussed in detail below.

Box 3: DuPont’s Canada’s Direction Statement

Safety, Health, Concern and Care for People, Protection of the Environment, and Personal and Corporate Integrity, are this company's highest values, and we will not compromise them.

We are committed to becoming a more Market-Driven, Customer-Oriented Organization of Diverse, Self-Managed People, Dedicated to Quality and Innovation and committed to achieving Continuous Improvement, as measured by our Relative Competitive Position.

DuPont Canada refers to its CSR activities as Sustainable Growth. DuPont Canada’s commitment to Sustainable Growth has its foundations in the company’s Direction Statement, which is reproduced in Box 3.21 This statement, which expresses the company’s commitment to the environment, health and safety, has served as a guide for the company for more than 15 years. To supplement its Direction Statement, DuPont Canada further articulates a philosophy on personal and corporate integrity, which states, “the company will conduct its affairs to the highest ethical

18 Sustainable Growth Strategies: Stakeholder Engagement. Global DuPont Website. Hhttp://www.dupont.com/corp/social/SHE/usa/us4.htmlH19 Speeches: Making Markets Work for All. Global DuPont website. Hhttp://www.dupont.com/corp/news/speeches/holliday_04_18_01.htmlH20 Awards and Recognition. DuPont Canada’s website. Hhttp://ca.dupont.com/NASApp/dupontglobal/ca/index.jsp?page=/content/CA/en_US/overview/awards/index.htmlH21 Direction Statement taken directly from DuPont Canada’s website. Hhttp://ca.dupont.com/NASApp/dupontglobal/ca/index.jsp?page=/content/CA/en_US/overview/glance/direction.htmlH

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standards and will work diligently to be a leading corporate citizen”.22 Employees are expected to do the following:

• Be fair and honest in all of our dealings on behalf of the company;

• Do what is right rather than what is expedient;

• Conduct all of our dealings with suppliers, customers and others in a manner that excludes consideration of personal advantage;

• Respect the individual dignity and legitimate rights and interests of fellow employees;

• Be a good corporate citizen in each community in which we operate;

• Be concerned not only with what our action is, but also with what it appears to be; and

• Regularly monitor our actions to ensure that we are living up to the standards that we have established.23

In its 2001 Sustainable Growth Report, DuPont Canada’s President and CEO Dave Colcleugh reinforces the company’s commitment to corporate citizenship by saying:

Revenue and earnings have been the traditional measures of success of a company. But for DuPont Canada, that is simply not enough. How we create value is as important as the results we deliver. We believe that by serving the needs of all stakeholders – including employees, value chain partners, shareholders, our communities and the public at large – we can achieve financial success and create lasting benefits.24

This commitment is echoed in DuPont Canada’s Sustainable Growth Mission, which is “to create shareholder and societal value while decreasing its environmental footprint throughout the value chains”.25 To fulfill its mission, the company has established three goals for 2010, each with accompanying pursuits, and metrics for measuring improvement. DuPont Canada built upon the goals that were set by the parent company and added supplementary pursuits and metrics, which it felt, were important to live out its own Sustainable Growth mission. These Sustainable Growth goals and pursuits were developed in consultation with all of the company’s business units. Table 1 lists DuPont Canada’s three key goals and the detailed pursuits and metrics associated with those goals. Meeting these goals and metrics is the responsibility of all DuPont Canada employees.

22 Philosophy on personal and corporate integrity taken directly from DuPont Canada’s website. Hhttp://ca.dupont.com/NASApp/dupontglobal/ca/index.jsp?page=/content/CA/en_US/overview/glance/direction.htmlH23 Philosophy on personal and corporate integrity taken directly from DuPont Canada’s website. Hhttp://ca.dupont.com/NASApp/dupontglobal/ca/index.jsp?page=/content/CA/en_US/overview/glance/direction.htmlH24 Presidents Message. DuPont Canada’s 2001 Sustainable Growth Report. 25 Sustainable Growth Mission. Taken from DuPont Canada’s 2001 Sustainable Growth Report. Page 2. This is also Global DuPont’s Sustainable Growth Mission, taken from the corporate website: Hhttp://www.dupont.com/corp/overview/glance/sus_growth.htmlH.

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Table 1: DuPont Canada’s 2010 Sustainable Growth Goals 26

Goals Pursuits & Metrics

• Triple current earnings by 2010 as we lead the evolution of our value chains. Primary metrics: Current earnings and the percentage of current year

revenue derived from businesses, products and services introduced in the previous five years, with a goal of 33% by 2010. DuPont Canada has recognized that in order to meet this particular pursuit, it will need to evolve its product portfolio. The company is currently looking for new market opportunities where it can leverage its strengths. The company is working to develop new sustainable businesses to compliment its traditional businesses and expects its product portfolio to change significantly over the next ten years.27

• Derive 25% of revenue by 2010 from non-depletable resources (such as soy-based polymers, recycled materials, knowledge-based offerings, etc.). Primary metric: Percentage of current year revenue derived from

offerings using non-depletable resources, with a goal of 25% by 2010.

• Increase the value of our offerings while reducing the material intensity. Primary metric: Increase in earnings per unit of product.

DuPont Canada wants to continue increasing its total earnings while reducing the amount of kilograms of product sold (i.e. The company is striving for less material intensive products and services in favour of more knowledge intensive products and services).28

• Elevate the quality of life for more of the world’s population. Primary metric: Increasing percentage of the world’s population reached

by DuPont Canada products. DuPont Canada indicated that it is presently working on business strategies that will help the company meet this metric.

The parent company DuPont is currently undertaking a great deal of work in this area. Its CEO Chad Holliday expresses the company’s commitment to addressing this metric with the following statements. "There are currently 2.8 billion people around the world living on $2 a day or less," stated Chad Holliday. "This is a staggering figure. Such poverty means that half the world's population has little or no access to the market and little hope to improve their lives. We simply must address the needs of the developing world, or sustainability will be impossible. The market is the best way to do this."29

Goal # 1 We will evolve our portfolio of businesses in collaboration with all stakeholders.

• Raise stakeholder engagement to a new level. Primary metric: Increasing number of collaborative processes

undertaken. DuPont Canada is presently creating an External Advisory Council to help guide the company’s Sustainable Growth efforts.

26 Taken from DuPont Canada’s 2001 Sustainable Growth Report: Creating Value and Doing Good. 27 Follow up Interview with Rhonda Carlin, Corporate Business Sustainability Resource, DuPont Canada. Wednesday November 27th, 2002. 28 Follow up Interview with Rhonda Carlin, Corporate Business Sustainability Resource, DuPont Canada. Wednesday January 8th, 2003. 29 Excerpt taken from News Release on Global DuPont’s website. GLOBAL BUSINESS LEADERS INTRODUCE SEVEN KEYS FOR IMPROVING LIVES THROUGH THE MARKET. World Business Council for Sustainable Development, with DuPont and Procter & Gamble, outline the importance of the marketplace to improving the quality of life. Released April 18th, 2001.

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Table 1: DuPont Canada’s 2010 Sustainable Growth Goals 26

Goals Pursuits & Metrics

• Advance our core values within our company, our communities and our value chains. Primary metrics: The number of work-related injuries and illnesses,

environmental spills and ethics violations.

• Provide our employees with meaningful work and opportunities for personal and professional growth. Primary metrics: The percentage of employees with triple bottom line

accountability, the rate of absenteeism and employee turnover.

• Seek out, derive advantage from, and celebrate our diversity. Primary metric: Diversity in our workforce.

Goal # 2 We will help build vibrant, sustainable communities by developing interdependent relationships, based on our common pursuits.

• Break new ground in our relationships with communities. Primary metric: the number of community-based outcomes achieved

(e.g. Social Innovation Enterprise Program).

• Drive eco-efficiency throughout our value chains. Primary metrics: The percentage reduction in energy intensity and waste

intensity with a 15% reduction goal by 2010, and the reduction in total discharges to air, water and land.

• Develop and adopt cleaner technologies and influence the technology choices of our value chain partners. Primary metrics: The percentage reduction in smog emissions with a

40% reduction goal by 2010 and the percentage increase in energy sourced from renewables to a 10% goal by 2010.

Goal # 3 We will eliminate waste from our processes and develop cleaner technologies and products.

• Equip consumers to make informed product choices - choices based on economic, environmental and social sustainability. Primary metric: The number of product risk/benefit assessments

performed and communicated.

DuPont Canada expects that the pursuits and metrics set out in Table 1 will evolve over the next 10 years. As the company advances in each area, it might recognize additional, or more appropriate metrics that will help the company more effectively address each Sustainable Growth goal.

DuPont Canada plans to communicate these 2010 goals, pursuits and metrics to its employees using a variety of channels such as the company’s internal newsletter, the annual CEO address, ongoing Sustainable Growth progress reports, and other methods. The company recognizes that it is not effective to simply present the goals, pursuits and metrics and expect employees to begin integrating them into their daily business routines and planning. It will take time to get the message through to all employees, to actually incorporate the Sustainable Growth goals in core business practices, and the company is working on strategies to achieve this.

To measure and track performance using the pursuits and metrics laid out in Table 1, DuPont Canada has developed a radar chart (Figure 1). Each performance metric is given equal weighting in the chart and the coloured lines signify the company’s accomplishments in 2000 and 2001

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towards the Sustainable Growth Goals (red being baseline in 2000, blue represents progress made in 2001). Each point around the outside of the radar chart represents the pursuits set out in Table 1. For example, as DuPont Canada is at a very early stage in developing plans to meet its Global Equity pursuit (Increasing the percentage of the world’s population reached by DuPont Canada products), the progress line indicates very little advancement in that particular area on the radar chart.

Figure 1: Measuring Rapid Sustainable Growth in Stakeholder Value

0.0

1.0

2.0

3.0

0.0

1.0

2.0

3.0

EarningsPortfolio

Non Depletables

Global Equity

Stakeholder Engagement

Work Evolution (Percentage Employees)

Core ValuesDiversity

Community Integration

Eco - efficiency

Clean Technology

Consumer Choice

Dematerialization

20002001

1.0: BELOW PLAN 2.0: AT PLAN 3.0: EXCEEDED PLAN

Last updated June 18, 2002

The above chart provides a framework for discussion at DuPont Canada business meetings, as a useful visualization or “snapshot” that shows how the company is doing holistically.

In his annual President’s Message in 2001, Dave Colcleugh noted that he expects DuPont Canada to make steady and measurable progress towards these new Sustainable Growth Goals. He continued by saying that he envisions that, by 2010, DuPont Canada will be a dramatically different company from the one it is today—with a significantly changed business portfolio, new and deeper relationships with communities and value chain partners, and innovative ways to preserve natural resources.30 This demonstrates forward-thinking and is another example of how change is an intrinsic part of DuPont Canada’s success as a company.

30 Presidents Message. DuPont Canada’s 2001 Sustainable Growth Report.

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5 DuPont Canada’s Sustainable Growth/CSR Program Areas

DuPont Canada’s determination to succeed with its environmental excellence programs in the 1990s was discussed earlier in Section 3. Environment has been an important part of the company’s CSR/Sustainable Growth Journey. Two additional CSR program areas that DuPont Canada highlights for best practice are Communities and Stakeholder Engagement (which have been combined as they are interrelated) and Sustainability Reporting.

5.1 Communities & Stakeholder Engagement

Historically, DuPont Canada has maintained relationships with its local communities. The company’s manufacturing facilities have a significant presence in communities, and from its early days, the company has had a significant corporate philanthropy program. In recent years, community involvement has become more strategic and has included more outreach. Responsible Care was an early driver that led DuPont to look outside communities to broader stakeholder groups. At the same time, public expectations began to change and have become more demanding of corporations in terms of more meaningful engagement. DuPont Canada has responded to these demands by developing a number of unique community and stakeholder engagement programs, in addition to the company’s traditional activities of corporate investing and charitable giving. The following are examples of DuPont Canada’s innovative community and stakeholder engagement programs.

Social Innovation Enterprise

DuPont Canada’s commitment to creating lasting value in communities is perhaps best illustrated by its groundbreaking Social Innovation Enterprise Program. The Social Innovation Enterprise is now a cornerstone of DuPont Canada’s community investment program and represents a significant paradigm shift from a focus on input (what the company gives) to a focus on output (what value it actually creates).31

Several years ago, some senior executives from DuPont Canada were reviewing the company’s community investment programs and began to ask whether the company’s financial contributions were having the impact the company desired. There was agreement among senior executives that their approach to community investment was not very strategic or as effective as it could be.

This type of self-questioning and desire for continual improvement is characteristic of DuPont Canada. The company strives to consider more than just the bottom line to contribute value to communities and society in general. This realization also represented a significant paradigm shift for the company’s approach to community investment. The company realized that it could have greater impacts by moving beyond just making financial contributions. They believed that its knowledge, skills and capabilities could be applied to make a positive contribution in the social 31 Presentation from Jennifer Hooper, Rhonda Carlin and Colleen Brydon. Dupont Canada Inc. July 18th, 2002.

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Box 4: “The Garage”

A team-based, collaborative prototyping challenge that aims to stretch or ignite the creativity of participants. An ‘experience space’ that will enable OSC visitors/participants to develop problem solving skills in a collaborative setting.

OSC/DuPont Innovation Project 2002

sector. DuPont Canada expresses this view as follows: “Corporate citizenship is a part of doing business, but we were not approaching it in a very business like fashion”.32

In response to DuPont Canada’s desire to create more value, the company met with leaders in the voluntary sector. These discussions led DuPont Canada to realize it could make an important contribution to innovation in the social sector. DuPont knew that innovation was extremely important to its business and decided that extending innovation to the social arena seemed natural. In DuPont Canada’s view, “social innovation can be considered the development of practices, processes and strategies that generate greater and better societal value than those that are currently being created through existing processes and systems”.33

DuPont Canada launched its new Social Innovation Enterprise Program as a means of applying its competency in innovation to the social sector and of collaborating with stakeholders. DuPont Canada is particularly interested in “working on advancing the processes that enable collaboration. It is a need in the social sector and it is also a need for us [DuPont]—that we hope to learn about and bring back in to improve our business innovation processes.”34 Product and service innovation at DuPont rely heavily on collaborative processes among multi-disciplinary employees. Bringing employees from different departments of the company together enables better solutions through more comprehensive decision-making. Collaboration with external stakeholders is also important for DuPont Canada to evolve and grow its business. For example, rapid technological change has, and will continue to, force the company to focus on core competencies and to rely more on external partnerships (i.e. with its value chain) for accessing additional cutting-edge technology and expertise.35 Aside from technological aspects, DuPont Canada also believes that collaborating with external stakeholders will help the company tap into and leverage new market opportunities.

As a first step for the Social Innovation Enterprise, DuPont Canada formed a collaborative partnership or demonstration project with Opportunities 2000, a poverty-reduction organization in Kitchener-Waterloo, Ontario. The company deliberately sought out an organization that was dissatisfied with the results of its current programs. An independent consultant helped DuPont identify Opportunities 2000 as a pilot test, by interviewing voluntary sector organizations in Southern Ontario. The partnership is now in its 2nd year of a 3-year

32 Linking Social Accountability Management and Organizational Innovation: A New Approach to Value Creation”. Prepared for Industry Canada by the Conference Board of Canada. June 2002. 33 Linking Social Accountability Management and Organizational Innovation: A New Approach to Value Creation”. Prepared for Industry Canada by the Conference Board of Canada. June 2002. 34 Quotation from Colleen Brydon. Manager Social Innovation Enterprise taken from Linking Social Accountability Management and Organizational Innovation: A New Approach to Value Creation”. Prepared for Industry Canada by the Conference Board of Canada. June 2002. 35 Linking Social Accountability Management and Organizational Innovation: A New Approach to Value Creation”. Prepared for Industry Canada by the Conference Board of Canada. June 2002.

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commitment, and thus far the feedback from the organization has been very positive. It is still early to see if the program is generating greater value for the pursuit taken, but there has nonetheless been a noticeable change in work practices as the Opportunities 2000 is taking a more holistic approach to its programs and overall strategy.

DuPont Canada is also working with the Ontario Science Centre (OSC) to study the relationship between innovation and collaboration. The project is specifically focusing on identifying tools and processes for organizations to provide the conditions that enable people to collaborate. Box 4 provides an example of one such a tool, “the Garage”.

This Social Innovation Enterprise program is an example that illustrates DuPont Canada’s commitment to raise stakeholder engagement to a new level. The company looks for win-win solutions that ensure the company is making a difference in local and global communities.

DuPont’s Advisory Council

Dupont believes that collaborating with external resources (NGOs, community groups, government, etc.) will help them better understand sustainability issues and stakeholder expectations of their company and is presently developing an External Advisory Council. The purpose of the Council is as follows:

The Advisory Council will bring understanding at depth to complex sustainability issues and will influence DuPont Canada’s implementation strategies for Sustainable Growth. Their divergent perspectives will enhance innovation and opportunity, improving the quality and integrity of outcomes associated with our 2010 Sustainable Growth goals”36

DuPont Canada has developed terms of reference for the Council and has retained an independent facilitator, highly skilled in the areas of stakeholder engagement and sustainability, to facilitate the process. DuPont Canada expects to hold its first Advisory Council meeting early in 2003.

The Council will consist of five external members and five internal Dupont members. The five external members will represent the company’s key stakeholder groups: community/civil society, special interest groups, academia, government and value chain partners. The five internal members will be senior DuPont Canada personnel, including the President of DuPont Canada, the Director of Safety Health and the Environment, the Vice President of Human Resources and two additional senior Business Leaders.37 The Council will meet twice a year, and may invite additional experts to participate if specific issues of concern arise that are beyond their area of expertise.

36 Follow up Interview with Rhonda Carlin, Corporate Business Sustainability Resource, DuPont Canada. Wednesday November 27th, 2002. 37 Follow up Interview with Rhonda Carlin, Corporate Business Sustainability Resource, DuPont Canada. Wednesday November 27th, 2002.

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Community Advisory Panels (CAPs)

In local communities where DuPont Canada conducts business, the company has organized Community Advisory Panels (CAP’s) to ensure there is effective communication of hazard and risk information to community members. The panels also provide opportunities for open, ongoing dialogue with community stakeholders. A manager at each site is responsible for developing an understanding of the unique community in which the facility operates, the products produced and the level of risk inherent in the manufacturing process. Managers also have responsibility to communicate these risks to community members effectively.

For example, one initiative, that is part of the overall CAP program at DuPont Canada’s Maitland site, sponsors a page in the local phone book describing the Community Alert Network telephone messaging system.38 This allows members of the community to get accurate and timely information on any emergency that may occur.

DuPont Canada’s Maitland Ontario site also recently conducted a comprehensive DuPont and community disaster test, where it integrated DuPont and community emergency response plans in a fully simulated off-site event. Results were highly successful for all parties involved and illustrated another effective way DuPont Canada communicates risk information to local communities and involves them in business operations.39

To fulfill expectations for local community engagement, DuPont Canada holds frequent public meetings in local communities where the company has operations. For example, recently at the company’s Ajax facility, the Performance Coatings Department hosted two Community Advisory Panel meetings—one for industrial neighbours and one for local residents. These panel meetings are part of the code of practice recommended by the Canadian Chemical Producers' Associations’ Responsible Care Program.

Attendees listened to presentations about:

• The performance coatings business presented by the site and technical manager;

• The site's environmental status presented by the facility’s environmental co-ordinator;

• The Ajax emergency response program presented by the emergency response co-ordinator; and

• The site's involvement in the community presented by the safety and security co-ordinator.40

38 Presentation from Jennifer Hooper, Rhonda Carlin and Colleen Brydon. Dupont Canada Inc. July 18th, 2002. 39 Follow up Interview with Rhonda Carlin, Corporate Business Sustainability Resource, DuPont Canada. Wednesday January 9th, 2003. 40 DuCan’s June 2002 newsletter, Hhttp://www.dupont.ca/English/news/ducan/2002/2002-06-13.htmlH

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At CAP meetings, attendees have opportunity to raise any questions or concerns that they may have about neighbouring DuPont facilities. CAP meetings also provide opportunity for relationship building between DuPont employees and local community members.

Emergency Assistance Plan

In recognition of the company's social, moral and legal responsibilities with respect to dangerous goods and other materials handled, DuPont Canada’s Emergency Assistance Plan (DEAP) has been established to provide a uniform corporate procedure for handling emergencies involving DuPont material through to consumption, whether it be customer, medical, product or transportation. The goal of this plan is to provide rapid response assistance from the company to customers, medical personnel, the general public and carriers. DuPont Canada's role in any emergency is to advise and assist any members of these groups.41

For example, DuPont Canada has a Corporate Chemical Emergency Response Team (CERTeam) located at its Maitland facility. The CERTeam has been fully equipped and trained to handle transportation emergencies involving DuPont products. This group's charter is to work in conjunction with Business Units and be available for incidents involving DuPont materials anywhere in Canada. The CERTeam is drawn from the Emergency Response Coordinators at Maitland.42 The basis for these Emergency Assistance Plans is to ensure that DuPont Canada employees and the local communities in which it operates are protected.

Business benefits from engaging stakeholders

DuPont Canada believes there are significant business benefits for developing and maintaining effective stakeholder engagement programs. Being open and transparent, engaging stakeholders in meaningful dialogue, and investing in local communities all ensure that DuPont will have a license to operate in the future. The company invests a great deal of time and money to foster effective two-way communication mechanisms that help it earn the trust of its communities. The company believes that proactive work will set it apart from competitors and ensure its success in the future. Practising sustainability simply makes good business sense.

Challenges to engaging stakeholders

According to Jennifer Hooper, DuPont Canada’s Director of Corporate Safety, Health & Environment, there are a number of general challenges the company encounters in its work with communities and stakeholder engagement. One is the current challenging business climate — one that sometimes promotes short-term decision-making based primarily on the economic bottom line. DuPont’s community programs including the Social Innovation Enterprise, the DuPont Advisory Council and the Community Advisory Panels, are all long-term programs that require a

41 Presentation from Jennifer Hooper, Rhonda Carlin and Colleen Brydon. Dupont Canada Inc. July 18th, 2002. 42 Presentation from Jennifer Hooper, Rhonda Carlin and Colleen Brydon. Dupont Canada Inc. July 18th, 2002.

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longer-term, strategic vision to realize their benefits. It is sometimes necessary to defend their existence in the traditional short-term language of the markets. The company is also learning about balancing competitive risks versus the need for more transparency. Once a company discloses a little information, stakeholders tend to want more. This is a delicate balance that will continually need to be evaluated on a case-by-case basis.

5.2 Sustainable Growth Reporting

DuPont Canada began publishing its Sustainable Growth Progress Reports in 1999. The report contains the company’s values and commitments, its sustainable growth goals and progress made towards those goals. The report does not follow the Global Reporting Initiative’s (GRI) Sustainability Reporting Guidelines directly but it does incorporate many of its requirements.

As is the case with many other companies who produce sustainability reports, the original purpose for publishing its Sustainable Growth Report was to increase the company’s transparency with its stakeholders. What DuPont Canada does differently, however, is it does not write it specifically to suit a governmental and non-governmental organization audience like many companies do. An additional goal of the report is to generate business interest along the company’s value chain. The report is therefore written in business language that appeals to senior business leaders along the value chain as well as other stakeholders. Ms. Hooper indicated that it has been a challenge to produce a report that speaks to all stakeholders and this is something the company intends to improve upon in each subsequent report. DuPont Canada’s business case approach to corporate sustainability reporting has been highlighted as quite unique among sustainability reports. DuPont Canada has received very positive feedback on its reporting style and recently secured two consulting opportunities for other companies based on its Sustainable Growth Reports.43

6 Key Drivers and Benefits for DuPont Canada

DuPont Canada’s 2010 Sustainable Growth Goals bring economic, societal and environmental pursuits together as the driving force of the company’s business strategy. DuPont Canada believes intrinsically that by serving the needs of all stakeholders—including employees, value chain partners, shareholders, communities and the public at large—it can achieve outstanding financial success and create lasting benefits for society.44 DuPont Canada identified several other benefits and drivers from its Sustainable Growth Strategy and Programs.

DuPont Canada believes that by being open and transparent, engaging stakeholders and keeping them informed of any health, safety and environment risks, and investing in local communities ensures a license to operate for the company in the future.

43 Personal Interview with Jennifer Hooper, Rhonda Carlin and Colleen Brydon. Dupont Canada Inc. July 18th, 2002. 44 Follow up Interview with Rhonda Carlin, Corporate Business Sustainability Resource, DuPont Canada. Wednesday November 27th, 2002.

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DuPont Canada believes its Sustainable Growth work will identify new market opportunities and that a strong Sustainable Growth company attracts the best employees in the workforce and enhances a company’s ability to retain good employees. Employees who are motivated and challenged in their work, and who also feel proud of their employer’s contribution to society, are more likely to stay.

Employee morale and satisfaction are also linked to innovation. Employees who are proud of the companies they work for are likely to give more of themselves to the company in terms of energy and commitment. By setting aggressive targets, DuPont encourages employees to “think outside the box” and to work in collaboration with others to find solutions to problems. Innovation also results from work with NGOs and other stakeholders, an area DuPont has committed to becoming more involved in, as it recognizes the business benefits of working with other stakeholders.

Better quality solutions is also a business benefit DuPont Canada has noticed in its work with a broader range of stakeholders. DuPont Canada also anticipates this will be a benefit achieved through the work of its Advisory Council.

DuPont Canada has also realized financial benefits through waste and energy intensity reductions. For example, a partnership between DuPont Canada and Collins and Aikman, an important customer for DuPont Canada, resulted in the establishment of recycle “loops” for “fluff” type waste. The project team conducted a comprehensive environmental assessment that alerted the team to an opportunity to divert 9 tonnes of “fluff” waste through recycling, annually. Costs reductions total approximately $15,000 annually.45

7 Organizational Success Factors and Challenges for DuPont Canada

DuPont Canada identified several challenges it faces and will continue to face as it proceeds with implementation of its Sustainable Growth goals, pursuits and metrics.

Developing a Formal Business Case. It is very difficult to measure in formal, quantitative terms, the success of its Sustainable Growth Programs. DuPont uses a radar chart to measure Sustainable Growth in stakeholder value, tracking metrics for all its Sustainable Growth pursuits. At this early stage, the graph reflects a qualitative assessment in some cases, however it does provide an overall picture of work the company has undertaken to date. As additional tracking and assessment systems are put in place, progress will be measured in an increasingly quantitative manner.

Shifting Corporate Mindset. Traditional economic business models are based on volume of product sold which in itself is not sustainable. DuPont Canada has spent 200 years measuring

45 Compliance Through Partnership: Environmental Management Systems. Taken from DuPont Canada’s Studies in Sustainability: Report 2000.

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success in terms of “tons of products sold”. It is understandable that DuPont Canada finds it challenging to rethink the way the company views success. The company has committed in its 2010 pursuits to “increasing the value of its offerings while reducing material intensity”. This requires a significant shift in mindset to move an entire company, primarily focused on delivering value and volume, to a new focus on delivering value with less volume. This is already occurring as is demonstrated by the case at Ford Canada where DuPont’s business is based on the number of cars painted, not the volume of paint sold.46

Maintaining a Long-Term View. According to Jennifer Hooper, Director, Corporate Safety, Health & Environment for DuPont Canada, a major challenge for the company has been advancing a longer-term vision of Sustainable Growth within the company and within the industry. The concept of Sustainable Growth can conflict with the stock market’s short-term preoccupation with quarterly growth and financial results. It is a continuous effort to maintain the business case for a long-term commitment to sustainability, when external markets are creating pressures for short-term results. CEO commitment has therefore been crucial for advancing the case for sustainability.

Developing Accountabilities for CSR. DuPont Canada has had past experience integrating its Environmental Excellence pursuits and metrics into existing business processes and knows that incorporating the new 2010 Sustainable Growth pursuits and metrics will be very challenging. Work is currently underway to integrate the 2010 pursuits and metrics into core business practices / performance reviews etc. and to develop accountability measures for senior executives. Measuring the success of societal aspects of its Sustainable Growth program is much more qualitative at this point, but DuPont Canada is working to develop quantitative as well as qualitative measures. For example, the percentage of positions in DuPont Canada with triple bottom line accountability will be one of the measures of success in achieving the 2010 Sustainable Growth goals.47

Learning to Collaborate With the Value Chain. The aggressive environmental targets the company set in 1990 were primarily internal and specific to manufacturing. The new goals and pursuits set out for 2010 are more holistic and require the participation of the company’s entire value chain in order to be successful.

Management Style. Successful integration of Sustainable Growth into corporate culture is supported by the management style at DuPont. Employees are moved through several different roles before they are eligible for management positions. It is a critical part of the career development program at DuPont to ensure that employees are exposed to, and made accountable for, more than one role in the business before they become senior managers. The term “holistic business person” is an accepted and well-used term inside DuPont, another unique characteristic of the company. Also many business managers attend business schools for higher education that

46 Taken from DuPont Canada’s 2001 Sustainable Growth Report: Creating Value and Doing Good. Page 4. 47 Taken from DuPont Canada’s 2001 Sustainable Growth Report: Creating Value and Doing Good. Page 6.

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have built in some elements of sustainability into the curriculum. This helps to increase awareness of CSR and Sustainable Growth business issues.

8 Role of Government

Ideas and Suggestions from DuPont Canada

DuPont Canada identified several potential roles that the Canadian government could play to assist and support companies with the implementation of Sustainable Growth/CSR.

DuPont Canada feels that government could provide some assistance in clarifying the various, and often overlapping, terms for corporate responsibility. There are several terms being used on the international stage—corporate social responsibility, social responsibility, sustainable development, sustainability, etc—almost interchangeably. DuPont has elected to use Sustainable Growth to describe activities in the area, but still refers to these broader terms when communicating its Sustainable Growth strategy to others.

As well, to support the implementation of CSR practices within companies, there is opportunity for the federal government to recognize those companies that demonstrate high levels of performance and consistently go beyond compliance. DuPont Canada believes that positive feedback and recognition go a long way in terms of employee morale, and it also creates an environment where employees want to continue looking for ways to be better corporate citizens.

Along the same lines as recognition, providing incentives for companies to advance CSR is also a very important role for government. For example, DuPont Canada raised the question of whether there are any incentives for companies (large or SME) to develop a resource-intensive environment or sustainability-reporting program? DuPont Canada recommends that the government consider incentives before moving ahead and legislating mandatory reporting.

If government is going to develop regulations, getting those regulations right is critical. DuPont Canada agrees that regulations may be needed in some cases, however enforcement is critical to ensure competition for all.

More specifically, DuPont Canada feels that the federal government could play a role in streamlining legislative requirements for innovation in Canada (e.g., New Substance Notification, CEPA). For example, if companies could use global risk management data companies would be relieved of having to conduct their own studies for every substance in Canada and would lead to greater efficiency.

DuPont Canada has attended many CSR events in the past hosted by the Conference Board of Canada and other industry associations that are attended by the same group of 25 or so leading companies. DuPont Canada feels it is important to start spreading good news about what other companies, especially SMEs, are doing to advance their CSR strategies and programs. This is

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another area where government could support the widespread adoption of CSR. The federal government could help disseminate good news stories from SMEs or provide assistance to those that are doing very little or perhaps nothing. SMEs may lack the resources, knowledge and capacity to get involved in CSR programs. The government could help by providing assistance in this manner and could begin by specifically asking SMEs what would help them advance CSR, and then work to support them in those ways.

Finally, DuPont Canada believes that chemical and petrochemical companies are ahead of other companies in terms of CSR due to Responsible Care membership. The federal government might want to focus on bringing other sectors that may be behind in the learning curve up to speed with CSR.

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