No one can say that the chemical industry has not understood importance of sustainability - but which company was first? A good bet would be on Eastman Chemical Company, a company that has been working for years on improving its products and their impact on the environment, long before it became a trend. In other words - Eastman is the Karl Lagerfeld of the chemical industry. The company's foresightedness was recently rewarded when it was named as one of America's 100 greenest companies in Newsweek Magazine's 2009 Green Rankings. Brandi Schuster spoke with Eastman's executive vice president responsible for sustainability Mark Costa about his company's environmental efforts and the importance of customer input.

Were you surprised about the Newsweek ranking?
M. Costa: I wouldn't say I was surprised, but I was very pleased to see it. We've always been quite serious about sustainability. When you look at our product portfolio, we don't really have a lot of products that have issues as far as sustainability is concerned. Our products are often solutions to other people's concerns. We've known for a while that we are well-positioned on this trend, but it's always great to get recognition for the work we've been doing.

Were you happy with placing 95th or do you think Eastman should've been placed higher?
M. Costa: I was happy with it; of course, you always want to have a higher ranking, but when considering that we were only one of two chemical companies in the top 100, we can't really complain.

In Newsweek's remarks about Eastman in the 2009 Green Rankings, they wrote that your company "...unlike many of its peers, has largely avoided environmental controversies." How do you see the chemical industry landscape today and the impact it has on the environment?
M. Costa: Chemical companies obviously have an impact on the environment, and we at Eastman have understood for a long time the responsibility we have. If you look at the history of this industry and how it has managed energy efficiency and reduced greenhouse gas intensity over the last decade, we have a very compelling track record: Eastman has managed to cut greenhouse gas intensity by 25% over the last 10 years. It's from an economic standpoint, it's logical to improve energy efficiency, and of course it's also better for the environment. We've been very motivated to continue to improve that as well as managing any other kinds of emissions we have in order to go above and beyond what the Environmental Protection Agency stipulates.

It's nothing new for us, but it is certainly new for the consumers to be putting pressure on companies to be more environmentally aware, and the industry is responding to that by being much more open about the impact its products have on the environment. McKinsey recently conducted a carbon lifecycle analysis for the International Council of Chemical Associations, which examined the global chemical industry's impact on greenhouse gas emissions through the life cycle of chemical products and the difference they make in the applications they enable. It was found that for every pound of CO₂ we produce, we reduce three pounds of CO₂ through energy efficiency and other improvements to our processes. We are a critical enabler for people's goals for sustainability, and we have to make sure we continue to improve our products' environmental impact.

What level of responsibility for the environment does the chemical industry have?
M. Costa: We have a responsibility to improve year over year, and that includes our energy efficiency and our CO2 emissions per pound of product we produce. The chemical industry has to develop products that enable energy efficiency or have an improved environmental impact downstream. And we're not just talking about global warming here - it's much broader than that, and there are multiple dimensions to it. We continue to improve all the time; we try to come up with new products, enable recycling of the products so we get a more efficient use of the carbons we take out of the planet and reuse them as opposed to them ending up in landfills or being burned. The chemical industry makes these kinds of improvements and sustainable solutions possible.

Eastman has the Cradle to Cradle (C2C) Silver certification - which provides companies with a means to measure achievement in environmentally-intelligent design - for 10 products. How does the C2C concept fit in with your company's sustainability efforts?

M. Costa: One of the best ways to drive environmental stewardship is to reuse. Our polyester stream, for example, is extremely well-suited for recycling and reuse. We continue to develop opportunities and look for ways to work all the way through the value system.

How do you customers view such a certification?

M. Costa: Our customers are the ones driving a lot of the trends. The key sectors we serve - packagings, construction, automotive and medical - all have dedicated programs to improve their environmental impact. It's a key element for those industries, and we work very closely with them to understand how they define sustainability and what's important for them. The Silver Certification is one element that shows how committed to sustainability, and we have the products to prove it. We also do lifecycle analysis from a cradle-to-grave point of view on a number of key products to help consumers understand what the impact of our products is versus the other alternatives that are available. We are continuing to develop renewable products as well; we are approaching this on multiple dimensions.

How much of Eastman product development is driven by your customers versus internal R&D?
M. Costa: We don't really develop any products that don't connect to a deep understanding of what our customers want in terms of product performance requirements and sustainability. When we develop products, they must meet certain sustainability criteria to the best extent possible.
Up until about two or three years ago, sustainability was a part of most companies' Health, Safety and Environment (HSE) programs, meaning it was mostly a compliance effort. Back then, it mainly encompassed Responsible Care and how the company operated and impacted the environment. Most companies in our industry are pretty good stewards from that point of view and are trying to improve on that front.

But if you're really going to be a differentiating company on this trend, it isn't just about what your emissions are or how you operate in your communities. It about doing all that in a way that's meaningful plus developing products that have a sustainability advantage over other alternatives on the marketplace.

In light of this, we moved sustainability out of HSE and combined it with corporate innovation. This didn't change all the things we've been committed to throughout the years concerning how we operate, but this raises the profile and the company's emphasis that this is a core element of how we are going to grow and develop our products.

How?
M. Costa: We score every product we develop against a set of criteria to make sure that there is an advantage from a sustainability point of view. We're still working on finalizing our goals on what percentage of our products need to be an "eco-product" and should be ready with it by the second quarter of the year.

What does Eastman do to encourage creative thinking in regards to sustainability when developing new products?
M. Costa: The strongest demand for improving our sustainability in both our products and our operations comes from the younger generation in the company. There's a very strong groundswell of supporting this trend and how we operate, so it is not something we have to lead from the top down; we're just harnessing the energy in the company that already exists. That makes pursuing this trend a lot easier that it would be if it had to be lead from the top.

The challenge lies within the fact that product development is getting more and more difficult within the chemical industry. Since there are less new molecules to develop, we have to get a lot more creative in how we develop products. We are putting a lot of emphasis on open innovation, which covers how we collaborate not only with customers, but also with entrepreneurs, small companies, even other large companies working on similar types of opportunities to get more creativity and how we identify ideas and develop products. Open collaboration - which is not really something this industry has done much of in the past - is going to be a critical driver of success, especially if we want to be successful as far as bio-based products are concerned.

Will this be the trend that changes the industry?
M. Costa: It will be interesting to see how this trend impacts the evolution of the chemical industry. So far, people have been able to enjoy the benefit of cost savings as well as the improvement in sustainability. If we continue to take this further, the solutions are potentially going to become more expensive. The real test will be if the consumer is willing to pay a premium for products that have a better sustainability footprint. Ideally, we will see a breakthrough in innovation that will make a premium unnecessary. However, if that's not possible - and we want to continue to push this to the extreme of how we improve our environment - then we will see just how critical this trend is. I think consumers want to go there to some extent, but I don't know how far.