This interview is part of Greentown Labs’ Climatetech Leadership Series, which profiles C-level executives from our most committed and climate-oriented partners. Read on for insights into how corporations are taking climate action and underscoring their commitment to sustainability as the world navigates and emerges from the global pandemic.
Innovation and sustainability have to go hand-in-hand as society transitions to a cleaner, greener future. Whether it’s through partnerships with startups, internal R&D work, or academic collaborations, innovation is crucial for both corporates’ bottom lines and responsibilities to the public.
That’s why I was so pleased to sit down with Trish Malarkey, the chief innovation officer of our partner DSM. She gave me an inside look into how DSM is embedding innovation and climate stewardship in its overall strategy and KPIs.
DSM has demonstrated its commitments to cleantech and innovation to the Greentown Labs community as well. DSM has been a dedicated partner to Greentown since 2015 and has worked extensively with startups in two Greentown Launch partnerships accelerator programs, resulting in four investments and other forms of collaboration.
ER: The world has changed a lot since we spoke earlier this year. I hope you and your loved ones are staying healthy and well. How is DSM responding to the COVID-19 crisis, and how has this affected your company’s sustainability efforts?
TM: Thank you, yes, we are healthy and well, and I hope the same for you and all your readers. We were fortunate at DSM to have early insight into the COVID-19 pandemic because of our presence in China, so we were able to act very quickly. We heightened our strict health and safety protocols straight away to protect our people and began applying our scientific knowledge and resources to support the fight against the virus. Our employees are putting in tremendous efforts to produce disinfectants, testing kits, and personal protective equipment. We also launched UNITE4COVID.org, a digital platform to connect healthcare professionals with inventors and manufacturers around the world to speed up the procurement of crucial equipment.
Fighting COVID-19 has been vital, but so too has been keeping our manufacturing facilities open. We contribute to the food supply chain, produce immunity-optimizing supplements, and make components for medical devices so governments around the world recognize the importance of what we do. Thanks to our people, we’ve been able to keep operating and supplying our customers.
At the same time, we’re also planning for the next phase, when we start to return to normal—or a new normal, as it’s being called. At DSM, we’re lending our voice to initiatives that would encourage a green reboot to the global economy. I believe this crisis can also be a powerful opportunity to rethink our society, and to implement the technologies and solutions that address climate change in a substantial way. This challenge has not gone away because of COVID-19.
ER: Thank you for sharing that perspective—it’s impressive to hear how DSM was able to take action right away to help fight the virus.
Shifting focus to your efforts on sustainability, could you share how the UN’s Sustainable Development Goals inform DSM’s sustainability priorities?
TM: When we at DSM updated our strategy back in 2018, we had a conversation about where we have been in the past. We felt that through our previous initiatives we’d proven that you can do well by doing good and solving real-world problems. We’ve done that in a way where we’ve also grown the top line, we’ve grown profitability, and we’ve also returned shareholder value. So the thinking was we should really take this from a proof-of-concept, and scale it to be part of our business model.
At that point, we said if you think you want to solve real-world problems, then the United Nations Sustainability Goals are a plan, a strategy for the world. We decided to use five of them at the heart of our strategy. The first is zero hunger, which we felt was a goal we were compelled to work in. Another was the third goal, which was good health and well-being. Number seven is affordable and clean energy. Thirteen is climate action, and the twelfth one is responsible consumption and production. We took those five goals and turned them into a strategy that has three focus domains: we have health and nutrition as one domain, which covers zero hunger and health and well-being; we have climate and energy; and then we have resources and circularity.
ER: That tees us up nicely for my next question—how do you align sustainability goals with innovation goals within the company?
TM: One of the first measurements is whether our innovation strategy delivers a benefit in sales. We look to have 20 percent of our overall sales from innovation, and all new innovation is driven by the focus domains that I just talked about. The other measurement we have is what we call our Brighter Living Solutions—an internal metric to see how we are improving the lives of people. We consider how we source the materials, how we produce them, what happens to them at the end of their life, and the impact they have on people and the planet, and we compare them to the competitive incumbent. These metrics really tie back to the Sustainable Development Goals.
If we think about our engineering plastics, for example, we supply products to the automotive industry that replace metals or other materials. Single-use plastics get an understandably bad rap at the moment, but our engineering materials actually have a benefit to the planet, if you consider the fact that they’re lightweight, they’re durable, they require less energy consumption to produce and it takes less energy to produce the vehicles that they’re used in. Some materials, such as our product EcoPaxx®, are made from renewable materials. EcoPaxx is made from the castor plant, which does not compete with the food chain. When we compare it to something like a metal, we can show that our solution is a better alternative.
DSM’s Niaga(R) is another example. This is a business that started with a concept for recyclable carpets. If you look at the current standard for carpets, the amount of carpet that goes into landfills is huge—and it’s not just carpets, it’s mattresses, it’s a lot of furnishings. At DSM, we’re looking at ways in which we can make these items truly recyclable—from the fibers, the glues, and everything—by designing out the waste.
ER: How do you build sustainability and innovation into DSM’s KPIs?
TM: We have set goals around greenhouse gas efficiency. We have already improved by 17 percent, versus our baseline in 2016. Fifty percent of our electricity is purchased from renewable sources—it was only 21 percent in 2017. We also have energy efficiency improvements of 2.3 percent in 2019 versus what we had in 2018.
You have to measure what you commit to. We’re quite vocal about commitments, and “commitments” is an important word, because it’s not optional. We state what we will do, we commit to doing them, and we tell people publicly how we’re progressing against those goals.
ER: Speaking of commitments, in October 2019 DSM committed to “introduce bio- and/or recycled-based alternatives for its entire engineering plastics portfolio.” How do you go about making a large shift like this?
TM: This is a journey. We’ve already introduced both bio- and recycled-based alternatives for some of our key products. We work really closely with our customers, our suppliers, and regulatory bodies to make sure that we are able to have our sustainable solutions adopted, because these are chemistries, they need regulatory approvals.
We use a lot of different technologies, in terms of fermentation, recycling, mechanical recycling, mass balance, things like that, so we really are looking to make a roadmap for the launch of virtually every bio-based or recycle-based material.
ER: Can you talk about how you’re working with others to drive climate action forward?
TM: We’re already involved in more than 80 academic partnerships all over the world. More than 30 of those are public-private partnerships, and that doesn’t include our venturing projects and our joint ventures with other small and large companies.
For example, we have a commitment to solar and bio-based energy. We’re founding partners in the MIT.nano facility and of course we have our great collaboration with Greentown Labs. We’re working closely with partners in the locations that we’re based to make sure that wherever we are, we’re part of the science and the innovation community.
Through DSM Venturing, we’ve already invested in over 75 startups, and we are working in the space of nutrition solutions and also sustainable living. So we cast our net fairly broadly. Being a life science company and a material science company, there’s a lot of potential applications for our expertise, but we have to bring it together with others.
ER: Is there anything else you’d like to add, to wrap up the conversation?
TM: A company like DSM has to continually ideate. To support the three domains of our strategy, we kicked off an ideation initiative last year where we looked at the ways in which we could bring our purpose-led strategy to life in the focus domains of nutrition and health, climate and energy, and resources and circularity.
For inspiration, we went to some of the megacities to get a lens on what are the key problems and challenges—and also opportunities. We went to Singapore, Jakarta, and Lagos. We also started a campaign within our own walls to get ideas and received some 300 ideas that we’ve sorted into 10 idea platforms that connect with our focus domains as well as our scientific competencies. We’re now at a stage where we’re going to sort these ideas into experiments or ventures or new businesses. This is an approach we’ve used in the past, and it’s resulted in innovations such as Bovaer®, an animal food ingredient that reduces the amount of methane that comes from cows.
Even when you commit, you have to show success. We would not be able to do this kind of work if our shareholders, the people who own the company, didn’t recognize its importance.
Emily Reichert is the CEO of Greentown Labs, the largest climatetech startup incubator in North America, on a mission to support entrepreneurs tackling the biggest climate and environmental challenges.