Planet in 2016
DSM’s operating network spans more than 100 commercial production facilities in over 40 countries. We report on the environmental impact of these business operations, and commit to delivering improvements, solutions and innovations that contribute to protecting the planet. We aim to improve both our own and our supply chain’s environmental footprint, and to deliver environmental benefits to customers and end-users through our Brighter Living Solutions. In our value chain, our key Planet inputs are raw materials (including renewables), energy (including renewables) and water.
This chapter describes our approach toward environmental topics relating to natural capitals that appear in DSM’s materiality matrix – Climate change & renewable energy, Resource scarcity / Circular & bio-based economy, Water security, Biodiversity – as well as other relevant topics such as waste, emissions to air, and product stewardship. Our Planet approach directly influences some of the Sustainable Development Goals, such as SDG 7 (Affordable and Clean Energy), SDG 12 (Responsible Consumption and Production) and SDG 13 (Climate Action). The topic Sustainable food systems is addressed in Nutrition. The Planet performance elements are detailed in Sustainability statements − Planet. See also How DSM creates value for its stakeholders and Stakeholder engagement.
DSM Responsible Care Plan 2016-2020
DSM’s Responsible Care Plan 2016-2020 is an integral part of the company’s Strategy 2018:Driving Profitable Growth. This plan comprises ambitions, targets and actions in the field of safety, health, environment, sustainable value chains (Product Stewardship and sustainable products) and security.
DSM’s main environmental target is a further reduction of greenhouse-gas (GHG) emissions per unit of product, in other words, improving our GHG efficiency. Building on the 20% efficiency improvement achieved from 2008-2015, we raised the bar again last year when we set our current target, which aims for at least a further 25% GHG efficiency improvement for the period 2016-2025. This will bring the anticipated total GHG efficiency gains in the period 2008-2025 to 40-45%. DSM’s GHG reductions are being driven by improving our energy efficiency by 10% by 2025 compared to 2015, purchasing at least 50% of our electricity from renewable sources by 2025, and exploiting opportunities for heat and fuel from renewable sources.
DSM operates in some regions where concerns exist about water security and air pollution levels. Consequently, we have also defined targets relating to water and emissions to air. As part of our sustainability ambitions and the transition to a circular economy, a waste recycling target has been defined.
The year 2016 is the first year in which the acquisitions of the Dyneema site in Mesa (Arizona, USA) and the DSM Nutritional Products site in Jiangshan (China), as well as the activities of the new DSM Engineering Plastics NHU joint venture in Zhejiang (China) have been included in the environmental reporting.
The contribution of DSM Jiangshan is material to DSM's Planet reporting. The data of these new units are included in the reported totals but cannot be included in the efficiency improvement indicators yet, since there is no prior reference year available.
GHG efficiency improvement
Energy efficiency improvement
>1% annually (>10% in 2025, reference 2015)
Electricity purchased from renewable sources
50% in 2025
Reduction of emissions to air per unit of
product (VOC, NOx, SO2)
40% in 2020 (reference 2015)
80-90% recycled by 2020
Water risk assessments completed on 90% of selected sites by 2020
Climate change & renewable energy
It is widely accepted that certain gases (e.g. carbon dioxide, methane, nitrous oxide) contribute significantly to climate change. These gases, which are also emitted due to a wide range of human activities, intensify the planet’s natural greenhouse effect, causing global warming. DSM is deeply committed to combat climate change by reducing the impact of our own operations and in our supply chains, by enabling our customers through providing low-carbon products and solutions, and through advocating climate action.
To encourage investments in low-carbon or carbon-free technologies, DSM includes the financial impact of GHG emissions (scope 1 and 2) through internal carbon pricing in the valuations of large investment projects from 2016 onwards. For each large investment proposal at DSM, two business cases have to be presented - one with and one without an internal carbon price of €50/t CO2eq. See Stakeholder engagement to read more about DSM’s activities in climate advocacy with governments, collaborative platforms and business networks on topics including renewable energy and carbon pricing.
Greenhouse-gas (GHG) emissions
DSM has applied the Greenhouse Gas Protocol, developed by the World Resources Institute (WRI) and the World Business Council for Sustainable Development (WBCSD), to report GHG emissions (scope 1, 2 and 3) since 2008. In 2016, DSM further improved its GHG reporting by implementing the latest GHG Protocol scope 2 guidance (2015), updating all of its used emission factors and including all GHG emissions related to electricity and steam generated on-site that is exported to third parties. These improvements in the GHG reporting methodology contributed to an overall increase in our reported emissions.
By implementing the GHG Protocol scope 2 guidance, the scope 2 emissions from our purchased electricity are now also calculated using the so-called ‘market-based’ method, reflecting GHG emissions from electricity that DSM has purposefully chosen to contract, in addition to the ‘location-based’ method that reflects the average GHG emissions intensity of grids on which electricity consumption occurs.
Everyone needs to act if we are going to successfully tackle climate change and transition to a low fossil-carbon economy. We made good progress in 2016 in improving DSM’s environmental efficiency on a number of key measures, as well as taking a big step in renewable energy. Our innovative, sustainable solutions also enable customers to reduce their emissions in turn.
Feike Sijbesma, CEO/Chairman Managing Board
GHG emissions scope 1 & 2
In 2016, DSM emitted a total of 1.5 million tons of CO2eq (location-based), which is an increase of 0.4 million tons compared to 2015. The increase is mainly caused by the inclusion of recent acquisitions in DSM's environmental reporting (0.2 million tons CO2eq), the inclusion of emissions related to electricity and steam generated on-site that is exported to third parties (0.1 million tons CO2eq) and the improvements made to the reporting mentioned above. Our market-based scope 1 & 2 GHG emissions were 1.4 million tons.
GHG emissions related to on-site-generated electricity and steam exported to third parties made up 8% of total GHG emissions. The GHG emissions related to exported energy are excluded from the determination of DSM's own GHG efficiency improvement.
In 2016, DSM’s GHG efficiency improved by 4% versus 2015 (both years location-based). A new high efficiency separation technology at DSM Nutritional Products in Dalry (UK) combined with higher production volumes, especially of products with a lower specific energy usage, contributed significantly to this improvement. Additional significant contributions came from our site in Grenzach (Germany), which had a higher utilization rate of its combined on-site heat and power plant.
GHG emissions scope 3
The Greenhouse Gas Protocol, Corporate Value Chain Standard defines scope 3 emissions as all indirect emissions occurring in the value chain that are not included in scope 2, including both upstream and downstream emissions. As such, the reported scope 3 emissions cover many different aspects of the value chain and are therefore largely based on global averages, estimates, extrapolations and assumptions. DSM applies the WBCSD 'Guidance for Accounting & Reporting Corporate GHG emissions in the Chemical Sector Value Chain' to determine the scope 3 emissions per category.
In 2016, DSM determined its scope 3 emissions bottom-up and not by extrapolation as in 2015. DSM's scope 3 emissions in 2016 were slightly above 2015 levels. The increases in Purchased goods and services and End-of-life-treatment of sold products are mainly the result of higher production volumes. The Investments category went down due to fewer participations in 2016. Other changes are assumed to be relatively minor and within the limits of scope 3 reporting accuracy. It should be noted that DSM's scope 3 emissions for 2015 have been restated to correct for an omission following the deconsolidation of DSM Fibre Intermediates and Composite Resins last year.
DSM strives to achieve a sustained reduction of its carbon footprint across the value chain, for example through the DSM Supplier Sustainability Program (SSP). See also 'Stakeholder engagement − Suppliers to read more about our SSP strategy.
Avoided emissions are defined as the difference between the life cycle GHG emissions from the products and solutions of the reporting company, and comparable solutions (i.e. a conventional product or market average). We apply the WBCSD and International Council of Chemical Associations (ICCA) guidelines for accounting and reporting GHG emissions avoided along the value chain for the chemicals sector.
DSM is actively involved in the latest review and update of these guidelines. Their principles are applied as part of DSM’s Brighter Living Solutions program, whereby one of the drivers is to have measurably lower GHG emissions along the life cycle. Applicable DSM products and solutions for which avoided GHG emissions may be evaluated include proprietary enzymes and cultures for use within the food and beverage industry, animal feed additives, and lightweight cargo nets made from Dyneema® fiber.
A further example where DSM helps its customers avoid emissions is the application of Uralac® Ultra powder coatings for heat-sensitive substrates such as wood, which can result in a reduction of up to 80% in the carbon footprint of the applied coating when compared to conventional technologies. With DSM’s strategic focus on Brighter Living Solutions, we aim to continue increasing the number of innovations and sales in products and solutions that contribute to avoided GHG emissions.
The longer we take to move to a low fossil-carbon economy, the higher the costs for future generations and for those already at risk today. Effective and inclusive carbon pricing can facilitate and speed up this transition. At DSM, we apply an internal price of €50 per ton CO2eq.
I am pleased to see that a rapidly growing movement of organizations, including thousands of companies, also sees climate action as both an inevitable opportunity and a moral responsibility.
Feike Sijbesma, Co-Chair Carbon Pricing Leadership Coalition
DSM’s energy transition
DSM’s total annual energy consumption increased from 20.9 to 22.6 petajoules in 2016. The increase is related to the inclusion of recent acquisitions in DSM's reported figures in 2016.
Improving energy efficiency is the most cost-effective way to reduce GHG emissions in our operations. DSM’s energy roadmap prioritizes investments in energy-efficient technologies and practices that reduce emissions and costs. In 2016, DSM’s energy efficiency improved by 2% compared to 2015. A multi-year energy efficiency improvement program is in place to obtain an annual improvement of at least 1%.
In 2016, DSM implemented various energy efficiency improvement projects and initiated new studies and projects that will deliver energy reductions in the years to come. These investments in 2016 amounted to €8.7 million and when fully implemented are expected to deliver around 1.5% in structural energy efficiency improvements, as well as an annual cost saving of approximately €2.3 million. The projects include both smaller operational and maintenance improvements, as well as the replacement of less efficient process equipment. The main energy efficiency improvements were achieved at two DSM Nutritional Products sites where older cooling equipment was replaced by state-of-the-art equipment, as well as by a process improvement project to replace a single-stage unit with a two-stage distillation unit at our hydrocolloids site in China.
DSM is committed to the responsible, efficient use of electricity. We are a signatory to the Climate Group’s RE100, which brings together the world’s leading companies committed to sourcing 100% of their electricity from renewable sources at the earliest possible opportunity.
Our intermediate target for 2025 is for 50% of DSM’s purchased electricity to be obtained from renewable resources. We do this by engaging in purchase power agreements, securing Renewable Electricity Certificates and increasing the amount of renewable electricity generated on-site. However, DSM is dependent on the availability of renewable electricity from the grid or through local electricity production. Regulations and policies on renewable energy vary from country to country, affecting our ability to scale up our procurement of electricity from renewable sources. Consequently we actively collaborate with authorities and other companies to jointly scale up the supply of electricity from renewable sources on the grid (also referred to as ‘additionality’). In 2016, 8% of purchased electricity came from renewable sources. We took a big step in the year with DSM's participation in Windpark Krammer.
Companies have scale to help transition to renewables
In the Netherlands, DSM has joined forces with AkzoNobel, Google and Philips in undertaking a long-term agreement to source power from local renewable energy projects. The first project the consortium has engaged in is a unique ‘bottom-up’ initiative – Windpark Krammer – in which local citizens have come together in cooperatives to drive the development of a wind farm in partnership with the four companies. This is the first time in the Netherlands that a group of multinational companies has teamed up with local citizens to create what is effectively a consumer-to-business energy partnership; the consortium’s participation is crucial to the project’s funding.
This bottom-up approach is an interesting, win-win model, because highly engaged individuals, industrial-scale users, windfarm developers and the achievement of the national Dutch renewable energy target all benefit.
When Windpark Krammer comes online in 2018, around 5% of its output will be used to provide local homes and small businesses with renewable power, while the remaining 95% will be used by the consortium’s four industrial partners. Once at full capacity, Windpark Krammer will supply DSM with 90GWh of renewable electricity annually – nearly 10% of the total amount of electricity DSM purchased in 2016.
Windpark Krammer is the largest citizen’s initiative in the Netherlands. The more than 4,000 members of the cooperatives and Zeeuwind and Deltawind have taken the initiative to develop the wind farm on and around the Krammersluizen in the Dutch province of Zeeland. The consortium partners have agreed to source a total of 350GWh a year of green electricity from the windpark, equivalent to the total annual consumption of 100,000 households.
Water and waste water
Water is essential for life. Global water demand has risen sharply during recent decades, while the availability of water resources is changing due to multiple factors. As a result, more and more regions face water stress, including regions in which DSM operates. Our water program focuses on identifying and mitigating water risks in these regions. DSM sites that are either located in areas with short- or long-term water scarcity risks or have waste water discharge levels above Best Available Techniques have to perform a water risk assessment and implement appropriate measures to mitigate adverse effects on water quality and availability. At the end of 2016, 67% of DSM's applicable sites had a valid water risk assessment in place as well as plans to execute the measures defined.
From 2016 onwards, DSM reports water consumption in addition to water use. Our water use includes water used for ‘once-through cooling’ that is returned to the original water source after use. Water consumption is the portion of water used that is not returned to the original water source after being withdrawn and as such is a better indicator with which to manage DSM's impact on water availability. Compared to 2015, water use was up 3% to 104 million m3, the increase being almost entirely driven by a higher city water consumption due to the inclusion of new acquisitions in the reporting. DSM's water consumption was 22 million m3 in 2016.
DSM’s water pollution reduction programs aim to reduce total water pollution, mainly through reductions in Chemical Oxygen Demand. Performance on this measure improved by 4% compared to 2015, largely as a result of improvements at our sites in Sisseln (Switzerland), Delft (Netherlands) and Wilmington (Massachusetts, USA).
As part of our ambitions to move toward a circular economy, we aim to reduce the amount of waste produced at DSM. The waste that is produced is preferably recycled; our recycling target helps us drive this. Landfilling waste is the least preferred alternative. Our definition for waste recycled is the percentage of total waste related to normal operations that is recycled, or, if that is not possible, incinerated off site with heat recovery. In 2016, this applied to 83% of DSM's waste, providing a good basis to reach the upper end of the targeted range by 2020.
Other emissions to air
Other emissions to air include VOC, NOx and SO2. While absolute emissions increased due to the inclusion of recent acquisitions in the scope for Planet reporting as stated above, DSM further reduced its other emissions to air per unit of product in 2016, thereby improving our efficiency in this regard. This came to a 25% reduction by the end of 2016, which is firmly on track toward our target of a 40% reduction by 2020. The main contribution to this improvement came from a DSM Dyneema site in China: 2016 was the first full year in which a new emission abatement system was operational. An overview of the absolute emissions can be found in the Sustainability statements − Planet.
DSM identifies and monitors protected areas in the vicinity of its sites and our impact on them. Sixty percent of our sites have been identified as being located in or adjacent to areas of high biodiversity value. In all cases, production sites are operating within applicable limits, as defined by local authorities. See also Stakeholder engagement and DSM’s position paper on Biodiversity on the company website.
Resource scarcity / Circular & bio-based economy
The world’s growing population and expanding middle class are increasing the demand for food, materials, and energy. DSM is dedicated to securing the future availability of natural resources, and to unlocking more value from the limited resources that are available. In this regard, we support the inevitable transition the world must make toward a circular and bio-based economy, which requires a different way of thinking compared to linear value chains.
The Ellen MacArthur Foundation defines the circular economy as one which is "restorative and regenerative by design, and aims to keep products, components, and materials at their highest utility and value at all times." It is a continuous positive development cycle that preserves and enhances natural capital, optimizes resource yields, and minimizes system risks by managing finite stocks and renewable flows.
DSM adopts a multi-faceted approach to the circular and bio-based economy. We are focused on exploring ways to:
- Reduce the use of critical resources
- Enable recycling and redesign with smart materials
- Advocate the circular and bio-based economy
We also consider the sharing economy as part of the circular economy. In this regard, we are looking into new business models and opportunities for our Materials businesses. The concept of increased joint ownership of products such as cars may lead to a reduced demand for such products in the future; this could present an opportunity for DSM’s high-quality, longer-lasting solutions, as well as forming a risk for parts of our current product portfolio.
In 2016, DSM continued to pursue new circular and bio-based opportunities within its businesses in the framework of its Brighter Living Solutions program, as well as in DSM Bio-based Products & Services, and new ventures such as DSM-Niaga. See also Stakeholder engagement, Materials and Innovation Center.
Renewable raw materials
DSM views the use of renewable resources as an essential step in securing future resource availability. In addition to energy from renewable sources, DSM is looking toward opportunities in renewable raw materials. Our memberships of the Ellen MacArthur Foundation CE100 and the Low Carbon Technology Partnership, led by the WBCSD, provide insight into new ways in which DSM can incorporate renewable raw materials into its processes. These collaborations also help position the role of waste streams and low carbon-intensive fuels as viable alternatives. Our Niaga collaboration and POET-DSM partnership continue to demonstrate this.
DSM selects renewable raw material suppliers where feasible. Renewable raw materials used by DSM include waste from the agricultural industry, yeasts and enzymes, carbohydrates, and natural oils and acids. In 2016, DSM’s spend on raw materials relating to renewable raw materials rose to 16.5% (2015: 16%) due to increased demand for our nutrition and health products. See also DSM’s position paper on sustainable biomass on the company website.
DSM’s sustainability strategy is supported by Product Stewardship, whereby we provide transparency and clarity on substances and their safe production, processing, use and disposal. DSM recognizes both the impact and the benefit of a Product Stewardship strategy as part of our own responsibility in the full value chain, in line with the principles of Responsible Care.
Last year, DSM raised its ambitions in Product Stewardship to address societal and external opportunities, requirements and expectations, in line with our sustainability programs. Our vision for Product Stewardship is for it to be part of ‘our way of working’. In 2016, the following progress was made in this area:
- A global competence plan based on a SWOT analysis was prepared in order to give direction and provide context on the role of Product Stewardship.
- We initiated a continuous improvement program to control Substances of Very High Concern (SVHC) in DSM products and within the supply chain.
- A ‘Product Stewardship Network’ was established at central level, coordinating the efforts of the Product Stewardship groups within our business groups.
- Our efforts were recognized by Chemical Watch in their special report 'Business Guide to Safer Chemicals'.
Regarding the control of SVHCs, DSM assesses all substances of which more than 1 ton per year is used in its processes so as to identify and monitor long-term human and environmental hazards. This assessment will be completed by the end of 2020. Identified SVHCs need to be reported in a DSM Priority Substance List and their use challenged in an internal justification process involving a multidisciplinary team.
The final goal is the phase-out of toxic substances, not only from DSM’s own portfolio but from the full life cycle of its products, in line with the company's commitment to bring more sustainable alternatives to the market. Where substitution is not currently possible, a risk assessment is performed following standard industry procedures. If safe use cannot be shown, the SVHC is prohibited from further use or production within DSM.
DSM is working to meet the 2018 deadline of the EU regulation on REACH, by registering all substances of which between 1 and 100 metric tons per year is produced. At the same time, we continuously update existing dossiers and support EU member states in evaluating an increasing number of substances. We also engage with our raw materials suppliers to guarantee sustainable business through REACH compliance along the value chain.
DSM supports the UN initiative to implement a Globally Harmonized System of classification and labeling of chemicals, for which an internal e-learning has been developed. We closely follow developments on health exposure scenarios for mixtures that need to be implemented in the industry’s product safety systems.