government &
policy
ENVIRONMENT AND THE BOTTOM LINE Rand study of four leading companies shows environmental concerns are being joined to overall corporate planning Jeff Johnson C&EN Washington
O
ver the past decade, environmental policy wonks have increasingly talked up a dream in which corporate America firmly integrates environmental thinking into industrial life— from reducing pollution to influencing overall R&D spending to developing new industrial and consumer products. Well, if s slowly happening, says a new report by the Rand Science & Technology Policy Institute, Washington, D.C. At least ifs moving along smartly at four large corporations that are also big R&D spenders—DuPont, Intel, Monsanto, and Xerox—which were surveyed by Rand. The report notes that officials at these companies also have some sharp recommendations for federal R&D policy changes that will encourage this transformation to continue, many of which depend in large part on changes in federal aid to universities and federal laboratories. However, the report notes that government-supported environmental research is only a drop in a large bucket, because industry spends twice what government does for R&D. Consequently, corporate spending is likely to dictate the future direction of environmental research, and any nexus between environmental needs and industry R&D will be what determines the direction of environmental advances. Government's role, therefore, may be more important in creating a climate to encourage environmental R&D, rather than forking over more money. Generally, the 145-page Rand investigation report, titled 'Technology Forces at Work," finds that DuPont, Intel, Monsanto, and Xerox are most likely to invest in environmental technologies that are, in fact, more than simply environmental. For instance, favored technologies are those that meet consumer prod-
Resetar: a predictable environment
uct requirements, create environmentally benign products, increase process efficiency, and also accomplish traditional environmental ends such as reducing air emissions. The companies surveyed were least interested in spending for remediation or for pollution monitoring and control technologies. Jn these areas, the report says companies will spend only if they must in order to meet some enforceable regulation. The companies were somewhat interested in the highly touted "public-private partnerships" that are so much a part of the Clinton Administration. But the report finds that the companies each had very different objectives in using this federal support, which limits the government's ability to influence corporate behavior. According to author Susan A Resetar, Rand operations research specialist, the companies want the government to provide leadership in developing a national consensus on environmental priorities. "They want a predictable environ-
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ment. Companies don't want to spend money on, say, water conservation and then find out the government really only cares about air pollution," she says. The companies in this study, she notes, are working on environmental concerns far "upstream" in the production process—toward fundamental science. They are not looking at new pollution controls. This focus, she adds, makes it difficult to tease out what exactly is environmental spending. "Everything they do will have some sort of environmental impact. It is not a piece of equipment anymore." Recommendations by the companies reflect this broad view. For instance, these corporations call for more federal spending to develop the scientific infrastructure for university-based environmental research to develop new technologies for products and processes as well as for training a scientific workforce. Also recommended is science funding to develop sustainable products, such as economic ways to collect, sort, clean, and disassemble materials—at the molecular level—to make and encourage recycling. In addition, they want more research in cheap energy and green manufacturing processes. The companies seek better scientific information and leadership from the federal government to move beyond regulatory requirements. They want federal help in translating abstract environmental goals and terms such as "sustainable" into real products and services. Furthermore, they want government help in developing markets for new environmental products. This could take the form of "ecolabels" for environmentally preferable products or providing market pull through government purchase of environmental products. Also mentioned is the value of rewarding companies that improve their environmental performance. The report notes that industry worries as well about taking the first step in the environmental arena, where wrong guesses may result in irreparable damage to human health, communities, and natural resources in addition to huge costs. Consequently, the firms interviewed say they want solid science to be used in the development of public policy decisions. Several companies urge that funding be increased to the Environmental Protection Agency, Food & Drug Administration, and other federal regulatory bodies to improve their ability to attract JUNE 21,1999 C&EN
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government &
policy
Four companies, four paths for environmental R&D A Rand report, 'Technology Forces at Work," describes the way four major manufacturers in the U.S. are incorpo rating environmental factors into their R&D programs.
corn starch and enzymes. The company estimates that 15% of R&D spending is exclusively environmental, 65% has a large environmental aspect, and nearly all research has some environmental component
DuPont executives say they are moving from a perspective of spending to con tain environmental costs to one of mak ing R&D environmental investments for "market-driven opportunities. ,, As an example, DuPont is working to sell chemical products that provide "solu tions" to customers' environmental needs. The company, for instance, ad vises buyers of its hazardous chemi cals on ways to best handle the chemi cals; it may provide the chemicals in limited quantities and "just in time" to cut customer inventory of hazardous materials, or it may make the chemi cals at the customer's plant. DuPont also may make the industrial compo nent that uses the hazardous chemi cals for the customer, allowing the cus tomer to avoid the hazardous material altogether. In addition, DuPont is investing in de veloping sustainable or environmentally benign products, such as making polyes ter intermediates using glucose from
Monsanto funds R&D projects with strong environmental implications, yet they may not be classified as environ mental. Because of the company's shift to biotechnology and agriculture, much of its product research is driven in large part by environmental concerns—be they engineered crops that will survive its herbicides or crops that will not be attacked by a particular pest Indeed, the company seeks to take advantage of markets that may be created from fu ture environmental problems, such as natural resource shortages in water or energy. The company also attempts to create products that have less environ mental impact because they serve mul tiple purposes, such as plants that bear fruit and provide biomass as a feed stock for plastics.
and maintain a high-quality staff to en sure public confidence in the regulatory process and ease introduction of new science discoveries into environmental concerns and regulations. According to the report, environmen tal technologies will not in themselves
Intel has a motto, "quick or dead," that Rand researchers say when de scribing the company's constant need for incremental product improvements
bring economic growth or improved quality of life. But these betterments are more likely to occur along with the tech nological applications. Rand's report notes that federal policy makers appear to have failed to adequate ly emphasize technological innovation as
in its computer chips and micropro cessors. Every two years, its product lines are completely retooled—hence, the company's strong R&D emphasis on ways to avoid complicated reappli cation for new environmental permits each time a product line is trans formed. Consequently, Intel invests heavily in pollution prevention R&D to keep emissions below levels that trig ger environmental permits. The com pany is an active participant in federal pollution prevention experimental pro grams and invests strongly in water conservation and reuse programs, par ticularly at its new Arizona facility. Xerox estimates that it saves hundreds of millions of dollars a year from envi ronmental initiatives—in particular, programs to reuse and recycle copiers and copying components. Xerox has de veloped a comprehensive system to track environmental costs and to better understand their implications and in corporate them into the company's ac counting system. Xerox also has a glo bal tracking system for consumer and regulatory trends, and its research cen ters, product development teams, and manufacturing units integrate this infor mation, much of which is environmen tal, into its corporate R&D planning.
a means to achieve better environmental performance at lower cost. They also have fallen short of understanding—and adjusting their policies to reflect—how industry is changing to include environ mental research and technology innova tion in their products and processes.^
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