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USA: DuPont's Goal -- Change Nature of Its Business

by Harold BrubakerPhiladelphia Inquirer
September 2nd, 2001

Engineers at DuPont's Chambers Works last year found a way to make an ingredient in its bullet-proof Kevlar material using 15 percent less natural gas and generating 45 percent less waste.

Another group at the plant along the Delaware River in Salem County eliminated environmentally harmful solvents from Lycra manufacturing.

And at a small DuPont factory in Newark, Del., Edward J. Carney, a maintenance technician, made equipment adjustments that reduced energy costs by 54 percent over the last five years.

These are examples of a decade-long effort by DuPont Co. to shed its legacy as an industrial giant that gulps energy and natural resources to make products while discharging waste - often toxic - into the ground, air and water.

The Wilmington company says it is learning how to walk lightly on the earth by making more profitable products that have lower environmental costs - from raw material to recycling. Industry calls this "sustainable growth."

But DuPont, which in recent years veered into and out of pharmaceuticals and spun off its Conoco Inc. energy subsidiary, is early in this process, said its vice president of safety, health and environment, Paul Tebo.

"We are making a huge transition to a sustainable-growth company," Tebo said, "but we still have many elements of a cyclical company," which he described as having "large equipment, large energy needs, and large material needs."

Sustainable growth is the latest catchphrase used by industry to refer to successful business management that is also environmentally and socially responsible.

DuPont, with $28 billion in revenue last year, is prominent in the movement because Charles O. Holliday Jr., DuPont's chief executive officer since February 1998, is chairman of the World Council of Sustainable Development, a coalition of 150 large multinational corporations.

Reactions to DuPont's pursuit of sustainable growth range from moderate praise to deep suspicion.

The cost-cutting moves inherent in sustainable growth are a real plus, said Gene Pisasale, senior investment officer at Wilmington Trust Co., DuPont's largest shareholder. Pisasale also praised the company's moves in recent years away from energy-intensive and low-margin products, such as nylon and polyester.

DuPont's shares closed Friday at $40.97 and have traded for the last 15 months at a level last seen in 1996.

Unions representing DuPont factory workers in the United States say they worry that sustainable growth is just another way to talk about cutting jobs. Since 1998 the company has laid off 7,700 employees, the majority in the nylon and polyester divisions, reducing total employment to 90,000.

At Chambers Works, an 84-year-old plant that produces more than 500 products, including stain protectants used in Stainmaster carpets, the unionized workforce has fallen by nearly two-thirds since 1989, to 800 from 2,300.

Environmentalists view sustainable growth as imperative, but greet talk about it by the likes of DuPont, Ford Motor Co., and oil giant BP P.L.C. with skepticism.

"It seems to be the rage within the industry, but it's just a perennial process of public relations," said Rick Hind, legislative director for Greenpeace USA's toxics campaign.

Tebo nodded at a mention of environmentalists' skepticism, indicating that he has heard it a thousand times. "We learned a long time ago that the reward for being a good environmental citizen is good business results," he said.

"We've seen our end-of-the-pipe treatment cost come down from about $1 billion to between $500 million and $600 million" over the last decade, said the 57-year-old executive who started his career at Chambers Works in Deepwater.

Spurred by former chief executive officer Edgar S. Woolard in 1989, DuPont cut its hazardous waste in the United States by 43 percent from 1990 to 1999, while increasing production by 11 percent, the company said.

DuPont has been praised widely for its 60 percent reduction in greenhouse-gas emissions over the last decade. Greenhouse gases, mainly carbon dioxide, methane and ozone, are pollutants that tend to trap the sun's heat in the atmosphere. The gases have been blamed for causing global warming.

But Hind and Alan J. Muller, executive director of the environmental group Green Delaware, said that cutting waste was nothing more than good business. In addition to cutting hazardous waste and emissions, they said, industry should move more quickly to adopt a business model based on renewable resources.

In a speech in March, Holliday, DuPont's chief executive, agreed with environmentalists on the underlying problem of business today:

"For the past decade we have been acutely aware that the models on which we based our businesses and production in the past were not sustainable over the long haul. Essentially DuPont, like many other manufacturing companies, had grown by making more 'stuff.' "

One high-profile, if cosmetic, move was to switch its slogan in 1999 from the 65-year-old "Better Things for Better Living" to "Miracles of Science."

Hind is unmoved by Holliday's apparent embrace of what environmentalists have been arguing for decades.

"We remain skeptical until we see a bold plan to convert these polluting facilities. Instead, it's like they are fiddling around in their backyard," Hind said.

DuPont's transformation will be gradual, Tebo said. Just as its former business, explosives, paid for the development of diversified chemical operations in the first half of the 20th century, so will its current energy- and capital-intensive businesses have to supply the cash for what is to come.

A $300 million joint venture between Dow Chemical Co. and Cargill Inc. in Nebraska to make plastic out of corn is an example of sustainability, Hind said, because its feedstock is renewable and it will not generate hazardous waste. The plant is expected to begin operations in November.

DuPont already has products, such as Tyvek, that fit into the sustainability model, Tebo said. On an annual basis, houses wrapped with Tyvek save more than 10 times the amount of energy used in manufacturing the material, the company said.

Regardless of what DuPont will do in the future, the company's past as one of the biggest producers of chlorofluorocarbons and the gasoline additive tetraethyl lead looms large for Kenny Bruno, coauthor of a 1996 book, Greenwash: The Reality Behind Corporate Environmentalism, which had a chapter on DuPont.

"I believe [DuPont's] overall environmental record has improved, largely as a result of the worldwide phaseouts of lead gasoline additive and CFCs, two of the nastiest widespread products modern industrial chemistry has given us," Bruno said.

Those phaseouts happened because of government action, Bruno said, and the company has never accepted "responsibility for two of the worst cases of environmental contamination ever."

Tebo acknowledged that in the 1980s DuPont was considered an environmental laggard for its stance on CFCs. "Any resistance we had to phasing out CFCs was science-based," he said, adding the company believed that many of the proposed alternatives to chlorofluorocarbons were not safe.

Tetraethyl lead was the first product Tebo worked on at Chambers Works, in 1968. "In those days, you couldn't make enough TEL," which was added to gasoline to boost the octane level, Tebo said.

Studies have shown lead to be extremely toxic, particularly to children. Leaded gasoline was phased out in the United States from 1975 to 1986, but DuPont continued making TEL at Chambers Works for export until 1991.

Conditions at Chambers Works have changed dramatically in the last three decades.

In the early 1970s, the 1,500-acre site was crisscrossed with open ditches carrying chemical waste, said Robert Gurecki, a 28-year DuPont veteran who is safety and health chairman of PACE Local 2-943, which represents 812 Chambers Works employees.

"Some of the smells in that place, you couldn't even explain to anybody," Gurecki said.

Now all the waste runs through elevated pipes to the plant's 25-year-old wastewater treatment plant.

That plant treats 12 million to 15 million gallons of waste a day from DuPont and other companies. Before the water goes into the Delaware, it has to pass a fish test.

Minnows have to survive in a mixture of effluent and river water. Bradley S. Martin, Chambers Works' environmental manager, said he cannot recall finding a dead minnow in that tank in a long time.





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