Sustainability as a topic has been around for decades. It might have started as a ‘nice to have’ for companies, but through the years, it has become a ‘license to operate.’ Customers want more sustainable products, people want to work for companies that have a focus on sustainability, and investors are increasingly interested in the sustainability efforts of companies. Environmental, social, and governance (ESG) issues have gained more prominence among regulators, investors, board members, and other stakeholders. However, when it comes to sustainability there is no fast track or short cut. It is a long journey with challenges and difficult decisions. These are five important learnings from AkzoNobel’s journey to become an industry frontrunner in sustainability:  

1. Sustainability is a Long-Term Game 

Everything starts with a commitment and needs to become real practice. Therefore, it is significant to carefully consider if the commitment is feasible, and equally important, if it fits with the purpose of the company. Sustainability targets are not stand-alone targets. They influence the blueprint of your business model. These things take time, planning, and true commitment from all layers within the company.  

AkzoNobel has found ways to create sustainable products for our customers, saving water, using less raw materials, and focussing on renewable energy. We were one of the first in the paint and coatings industry to embed sustainability into our day-to-day activities, and the first in our industry with integrated reporting on the results – because we realized it would be essential to our own future, the future of our customers, and the world around us. However, the big change happened when we re-defined our view on sustainability a couple of years ago. We made the change from approaching sustainability as something we do because it is expected of us, to approaching it as a vital part of our business. Sustainability and profitability go hand in hand.

We have set a clear plan in place that will take us through to 2030 and decrease our CO₂ emissions by 50% (baseline 2018). Our vision and strategy for sustainability are aligned with the Paris Agreement and with the goal of becoming carbon neutral by 2050.

2. Your Sustainability Efforts Need to be Validated by Others 

Setting the right targets for your own company and getting the company organized to deliver on these targets are great steps, but a pitfall is keeping this process internal. To really test your targets and plans, it is helpful to get it validated by internationally recognized initiatives. Not only will help clarify targets, but it makes your sustainability approach more transparent and reliable for external stakeholders.

AkzoNobel’s science-based sustainability targets are officially validated by the Science Based Targets initiative (SBTi), a partnership between CDP Worldwide, the United Nations Global Compact, the World Resources Institute, and the World-Wide Fund for Nature. In addition, we are at the forefront of the paint and coatings industry based on ratings from these agencies/benchmarks: Sustainalytics, MSCI ESG Ratings, FTSE4Good, EcoVadis and Moody’s ESG Solutions. 

We have also received the Terra Carta Seal, an award recognizing global companies that are driving innovation and showing commitment to creating genuinely sustainable markets.

 3. Sustainability Initiatives Should Fit the Company, Support Targets and Be Measurable 

There are many initiatives that a company can get involved in when embracing sustainability. AkzoNobel has committed to a 50% reduction in its own CO₂ emissions by 2030 and becoming climate neutral in 2050 (baseline 2018). By 2030, we also aim to reduce the carbon emissions in our value chain by 50%, tap 100% renewable electricity in our operations, as well as 100% circular use of materials.

An example of supporting these targets is our initiative in Southeast Asia where we have been transitioning to renewable electricity – mainly solar energy – at several of our manufacturing sites. Over 7,800 units of solar panels were installed at our Malaysia and Thailand plants, as well as around 8,000 solar panels at our Shanghai and Guangzhou sites in China. Our Australian and Pakistan sites, too, boast solar panels. A number of our plants are also recycling wastewater back into our processes, while waste recycling initiatives are underway at our Vietnam and India sites (i.e., sludge is being used to produce bricks for use by the local community). 

Our drive towards 100% circular use of materials and reduced carbon emissions has also been validated via our best-ever assessment by Sustainalytics, a key sustainability rating agency.

4. Create a Sustainability Culture

A company should ensure that the agenda of sustainability is prioritized by the board and embraced by employees at every level. Make sure all personnel are engaged and motivated by inculcating an effective and dynamic sustainability culture. 

Our employees play a part in creating an engaging place to work and contribute to the company's sustainability success. 

We actively and systematically assess (potential) human rights impacts and take action where needed. We also expect all our business partners to respect human rights and apply equivalent principles, and we seek to support them actively in their implementation where needed. In 2016, we accelerated our human rights program, starting with the appointment of an AkzoNobel Human Rights Committee and in 2017, further studied possible impacts on people’s human rights across our value chain.

We also contribute to the communities we operate in by revitalizing neighborhoods, help companies recruit and train local painters, and we partner with SOS Children’s Villages and the Education Fund with Plan International.

 5. Ensure Sustainability Efforts Have a Wide Impact, Seek Collaboration at Every Level

The responsibility of a company’s sustainability efforts is not limited to only their own operations. The Paris Agreement includes a clear call to action for taking responsibility for scope 3, the emissions upstream and downstream. We must engage with stakeholders to achieve our targets. A company cannot drive its sustainability agenda by itself, as it will have limited scope, nor can key challenges be tackled in isolation. That is why collaboration is so important and plays a key role in making change happen and finds solutions, quicker. By engaging with its key stakeholders, a company can gain momentum on key initiatives in an accelerated manner.

To be successful and make the necessary impact, AkzoNobel is committed to working closely with our whole value chain, including suppliers, customers, and other partners. Our most recent initiative, the Paint the Future Collaborative Sustainability Challenge, saw us inviting key partners to take part in developing a shared approach to tackle climate change in the areas of energy transition, process efficiency, solvent emissions, and circular solutions. Participants then went on to form exploration teams to help accelerate the reduction of carbon emissions in the paint and coatings industry. We continue to look for new ways to drive sustainable innovation that bring tangible benefits, while delivering a positive social and environmental impact. 

Sustainability is a long-term journey and requires the commitment, cooperation, and confidence of all stakeholders. AkzoNobel has been on this journey for many years, and it will be a continued effort. It is important to recognize that it is not a race, it is collaborative effort. These five learnings hopefully can help other companies on their own journey towards a sustainable future.

If you would like to learn more about sustainability at AkzoNobel, please feel free to contact our communications team via email at diana.ang@akzonobel.com.