André Veneman of AkzoNobel says achieving a high ranking is less important than the process of continually improving corporate sustainability performance
There is not long to go before the rankings are announced for the 2014 Dow Jones Sustainability Index (DJSI). That may mean little or nothing to some people, but for AkzoNobel, it's a big deal.
The DJSI ranking is based on research by RobecoSAM, a renowned investment group based in Switzerland. They annually assess the sustainability performance of around 90 publicly listed global companies in the chemicals and coatings industries.
This involves carrying out detailed analysis of various criteria that relate to standard management practices and performance measures. We are measured against 86 chemicals companies, of which the top nine are included in the DJSI World Index. I'm proud to say we've been ranked number one in our sector for the last two years. But it's not necessarily about finishing first.
Let me explain. The DJSI is the most respected independent sustainability ranking system. It benchmarks our performance across the industry and enables us to assess what progress we are making in terms of achieving our strategic sustainability goals. And this is crucial, because achieving a high ranking is not an end in itself. The fundamental value of the DJSI is as a management tool, which helps to continuously improve the sustainability performance of our business.
Being ranked first means you are doing a lot of things right of course, but more importantly, the assessment also highlights areas for improvement. And you need to take action, because if you don't make progress and adopt a continuous improvement mindset, you'll drop down the list or fall off it altogether. For example, in 2013, operational eco-efficiency and talent attraction and retention were identified as areas where we could do better. So since last September, we've been working hard to improve in these areas.
In fact, we attach so much importance to a strong performance on the DJSI that our ranking is tied to remuneration packages for our top 600 executives. That's a clear indication of how sustainability is driving our business, and how our business is driving sustainability.
We have a clear vision for what we want to achieve and our DJSI performance is a barometer for measuring the level of our success. We are committed to delivering more value from fewer resources and have adopted a Planet Possible strategy built on three key pillars:
- Improve resource efficiency across the full value chain
- Reduce our carbon emissions across the value chain by 25 to 30 per cent per ton by 2020 (2012 base)
- Increase revenue from downstream eco-premium solutions to 20 per cent of our revenues by 2020
When this year's DJSI rankings are announced in early September, we will know if our ongoing efforts to intensify our sustainability initiatives are continuing to move us in the right direction. It's a process which actually began several years ago, because we've featured in the top three for each of the last eight years.
What this demonstrates is that sustainability has become an integral part of our business activities and our company culture. But it also shows that we haven't stood still. We've made improvements each year and used the assessment to critically identify areas that need attention.
Everyone likes to win, but the thing about the DJSI is that even if you aren't ranked first, what you learn is invaluable. So you congratulate whoever finished number one and set about making the necessary improvements to put you in contention next time. In some ways, everyone's a winner.
André Veneman is corporate director sustainability and HSE at AkzoNobel