Pioneering the road to sustainable business
Sustainability has been driving Solvay’s strategy for a long time, as the Group knows that more sustainable business not only means better business, but higher growth. The key is to truthfully evaluate a product’s sustainability…
Which is why Solvay has put together a unique tool to evaluate its products in terms of environmental, social and business sustainability. Sustainable Portfolio Management (SPM) is like a fact-based compass that is used to evaluate Solvay’s products from a holistic perspective based on three sets of criteria: environmental footprint, social impact and the way in which they answer market demand and challenges.
Because you can only claim that a product is “green” once you’ve looked at the whole picture, Solvay aims to match the actual sustainability needs of the marketplace by going beyond simply devising biodegradable or renewable-based ingredients, and rather coming up with more complex solutions that consume less energy, waste less resources, have a positive social impact, etc. “As far as manufacturing footprint is concerned, SPM compares the environmental impact of a product to its value for society at large. We estimate this value to society on the basis of the price that the market is willing to pay for the product”, explains Francois De Vos, Business Sustainability Advisor at Solvay’s Sustainable Development Function.
To make sure our products are aligned with increasingly demanding marketplaces, SPM relies on a qualitative assessment consisting in 60 straightforward questions. The assessment is appreciated at the product/application level (which product for what use in what business environment?). “We want Solvay decision makers to make better decisions. If the sustainability benefit is not real but just an exercise in greenwashing, it’s very unlikely we will enjoy higher business growth”, explains Dominique Debecker, Solvay’s Deputy Chief Sustainability Officer.
The outcome of SPM evaluation is the classification of products in terms of business risks stemming from their environmental footprint and sustainability-related market opportunities or challenges. This creates a “heatmap” on which products place themselves as Solutions, Neutral or Challenges. To be in the “Solutions” category, products must serve in an application that demonstrates a “direct, significant, and measurable social or environmental benefit to society”. As of 2016, 84% of Solvay’s total turnover has been analyzed in this way, and 43% of it consists in sustainable solutions (a hefty increase from 25% just three years ago).
Involving customers in focused decision-making
And this evaluation process goes beyond product classification. The idea is to guide decision-making with sustainability constantly in mind. “Our methodology is designed to help determine very quickly which ideas and opportunities are good and which ones aren’t. The primary objective is to make better business decisions, more often and faster than our competitors because sustainability has been taken into account”, adds Dominique Debecker.
Beyond the product evaluation phase, the SPM tool is there to help GBUs identify new growth opportunities in their business environment by making sure decision makers are informed in a thorough fashion. “We created a practical guide so that everyone, from manager to technician to sales teams, can understand what it means to create sustainable value.” At Group level, the SPM methodology is now a compulsory analytical tool to be applied before decisions are made in every domain, from marketing to acquisitions to strategy and innovation.
But the SPM methodology is also used to reach outside the company. Extending its sustainability concerns to its customers – and true to its tradition of working hand-in-hand with the outside world – Solvay understands that better solutions can be found by collaborating with them. Dominique Debecker: “Once we’ve carried out our evaluation, GBUs go and see their customers and ask them what's their view on it, to see what we can do together to co-develop solutions that will make everyone stand out from competition.”
Widely recognized leadership
Devised in-house in 2009 when no equivalent existed in any company, the SPM methodology has been constantly improved since then, its checklist supplemented. “We started working on this nearly 10 years ago, and it’s still a pioneering initiative. Not many companies are equipped with a tool that enables them to measure the impact of sustainability in business terms of every decision they make.”
It’s therefore no surprise it’s arousing widespread interest: customers, peers, but also companies in completely different sectors are approaching Solvay to learn more about it. “We’re perceived as leaders in this field, companies understand the added value of our process and want to know more.” The methodology has also been recognized as best-in-class by authoritative bodies such as the World Business Council for Sustainable Development or CSR Europe.
The course has been set, but the road is long. Creating a new way of envisioning how to conduct business is not done overnight. “It’s a huge change process. The methodology has proven itself, now we need to keep working to deploy it across the entire company.” For the coming years, Solvay’s strategic objectives are to raise the proportion of sustainable solutions to more than 50% of total group sales by 2025 - which goes hand in hand with the group’s other social and environmental objectives for 2025, such as reducing its greenhouse gas intensity by 40% or cutting occupational accidents by 50%. “The 50% objective for 2025 was set only two years ago, and back then we wondered if we could ever reach it, recounts Dominique Debecker. Now, with the progress already made, we could set an even more ambitious goal. In any case, we can be proud of what we’ve achieved so far.”
Sustainable Portfolio Management (SPM) tool
Integrated in the Solvay Way approach, Solvay uses the SPM tool to link together Strategy and Sustainability.