Dow Chemical

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Dow Chemical Benelux
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Quick Facts
TypePublic
sectorChemical Industries
Headquarters (Benelux Organization)Terneuzen, Netherlands
Year of Origin1955
Emissions (All Scopes)108 Megatons of CO2 (2020) (Dow Inc.)
Total Revenue38.54 billion USD (2020)
Stock ExchangeNew York
Key PeopleAnton van Beek(President-director Benelux) Jim Fitterling(CEO & Chairman Dow Inc.)
Number of Employees4.000 (Benelux)
SubsidiariesDow Inc. consists of 400 subsidiaries[1]

Dow Inc (International)

Dow inc, was founded in 1897 by H.H Dow an electrochemical pioneer.[2] Dow Chemicals manufactures plastics, chemicals, and agricultural products.[3] The company has 36,500 employees and 109 manufacturing sites in 31 different countries.[4] The headquarters are located in Michigan, United States.[5] In 2020, Dow chemical reported a net income of 1,3 billion USD.[6]

Dow Chemical (Benelux)

Dow Chemical Benelux styled as Dow Chemical, is part of Dow Inc. Dow has been active in the Benelux since 1955.[7] In 1961 Dow purchased a manufacturing site in Terneuzen, The Netherlands.[8] Now Dow Chemical Benelux is located in eight major locations in the Netherlands (Terneuzen, Delfzijl and Dordrecht) and Belgium (Antwerp, Brussels, Tertre, Zwijndrecht and since 2016, Seneffe).[9] With 16 factories, Dow Terneuzen is Dow’s second largest manufacturing site in the world.[10] Besides this, Terneuzen is also the central point for supporting Dow services in Europe, the Middle East, Africa and India. Dow Benelux overall has approximately 4000 employees[11] , of which 3550 employees work at the location in Terneuzen.[12] The Value Park, located at the Terneuzen site, covers 140 hectares and is targeted at companies working in the chemical industries. The park is located at a convient location as it is directed to railroads, the road network, and international waterways.[13] Futhermore, the park is located to the Dow pipeline that extents from Terneuzen to Antwerp (220km).[14] This pipeline transports ethylene, naphtha and propylene.[15] The size and importance of Dow Benelux to Dow Inc. shows that they are a key player in their field.

Company Structure

Dow Inc. works with two boards, the leadership team and the board of directors. The leadership team is focused on the day-to-day business such as creating strong and balanced growth for their stakeholders.[16] The Board of Directors focuses on the broad corporate policy and the overall performance of the company through oversight of management and stewardship of the company.[17] The board appoints the company’s officers and assigns to them responsibility for the management of the company’s operations.[18]

There is no information available on the structure of the leadership at Dow Benelux. What is known is that Anton van Beek is the president-director of Dow Benelux[19] and that Neil Carr is the president of the operations in Europe.

Leadership Team

Dow Chemical Leadership Team of 2020[20]
Name Function Remuneration x1000USD
Jim Fitterling Chief Executive Officer & Chairman 22211,3
Howard Ungerleider President and CFO 8475,7
Jack Broodo President, Feedstocks & Energy Unkown
Neil Carr President, Europe, Middle East, Africa, and India Unkown
Karen S. Carter Chief HR and Chief Inclusion Officer Unkown
Diego Donoso President Packaging & Specialty Plastics Unkown
Mauro Gregorio President, Performance Materials & Coatings Unkown
Melanie Kalmar Corporate VP Chief Information Officer & Chief Digital Officer Unkown
Torsten Kraef Senior VP, Corporate Development Unkown
Jane Palmieri President, Industrial Intermediates & Infrastructures; Asia Pacific Oversight Unkown
John Sampson Senior VP, Operations, Manufacturing and Engineering Unkown
A.N. Sreeram Senior VP, Research & Development and Chief Technology Officer 5185,6
Amy E. Wilson General Counsel and Corporate Secretary 5729,9

The remuneration is from 2020 and includes 1. Salary, 2. Stock Awards, 3. Option Awards, 4. Non-Equity Incentive Plan Compensation, 5. Change in pension value, 6. Other(Travel Expenses, Tax reimbursements, etc.)[21]

Board of Directors

Dow Chemical Board of Directors Team 2020[22]
Name Function Remuneration x1000USD
Jim Fitterling Chief Executive Officer & Chairman 22211,3
Jeff M. Fettig Lead Director Dow Inc. 418,8
Samuel R. Allen Former Chairman and CEO, Deere & Company 325
Ajay Banga Executive Chairman, Mastercard Inc. 310
Guardie Banister Jr. Former President and CEO, Aera Energy LLC 185,8
Jacqueline K. Barton John G. Kirkwood and Arthur A. Noyes Professor of Chemistry 330
James A. Bell Former Executive VP, Corporate President and CFO, The Boeing Company 342,3
Wesley G. Bush Former Chairman and CEO Northrop Grumman Corporation 310
Richard k. Davis President and CEO Make-A-Wish America 310
Jacquiline C. Hinman Former Chairman, President and CEO CH2M HILL 310
Jill S. Wyant Executive VP of Innovation and Transformation Ecolab Inc. 278,8
Daniel W. Yohannes Former U.S. Ambassador to the Organisation for Economic Co-operation and Development 310

The remuneration is of 2020 and includes; Fees earned and stock awards.[23]

Accountant

The independent Auditors of Dow Chemical are Deloitte & Touche LLP (Deloitte).[24] They have been the auditors since 1905.[25]

Main Activities

Dow Chemical is active in the Chemical sector with products like polystyrene, polyurethane, polyethylene, polypropylene.[26] These products are used in many different markets such as Agriculture, Healthcare, and Packaging.[27]

Government

Dow Chemical does not have royal status.[28] Dow Chemical has not received NOW support from the Dutch government.[29]

Paris Agreement to Today

Dow inc. accepts the scientific consensus that climate change caused by increasing greenhouse gas (GHG) emissions from human activity has serious consequences for the planet and society if left unaddressed.[30] Furthermore, Dow supports the Paris agreement and is committed to achieve the goal of keeping global temperature rise well below 2°C, and to pursue efforts to limit the increase to 1.5°C.[31]

Dow inc. created a set of sustainability goals to reach by 2025. In their latest ESG report, they provided an update on these goals in relation to their progress made by 2020.

Dow Chemical 2025 Goals and 2020 Progress [32]
2025 Goal 2020 Progress
Leading the Blueprint Created and shared Blueprint Thinking Toolkit
Delivering Breakthrough Innovations 48% of sales were from products that address world challenges
Advancing a Circular Economy external recognition of the circularity impact of six major projects
Valuing Nature $100 million in business value was used towards this goal
Safe Materials for a Sustainable Planet A sustainable alternative was announced, ECOSURF™ EH
Engagign for Impact the goal team refreshed the targets to ensure they are measurable and verifiable
World-Leading Operations Performance Increased total worker health index by 10 percentage points

Financial Results since 2015

Financial situation
Year Revenue Profit Dividend
2015[33] 48,778 billion USD 7,345 billion USD 1,913 billion USD
2016[34] 48,158 billion USD 3,978 billion USD 2,037 billion USD
2017[35] 62,484 billion USD 1,460 billion USD 3,394 billion USD
2018 XXX billion USD XXX billion USD XXX billion USD
2019 42,951 billion USD XXX billion USD XXX billion USD
2020 38,542 billion USD 1,4 billion USD XXX USD
2021 XXX billion USD XXX billion USD XXX billion USD

Scandals and controversies

Terneuzen

In 2014 the court in Middleburg gave Dow Benelux BV in Terneuzen a 1,8 million euro fine.[36] Originally 5 million euros were demanded of the company due to various environmental crimes between 2005 and 2008. The crimes were in relation to chemical leaks at the manufacturing sites in Terneuzen. The court could not conclude that there was a lack of safety protocols at Dow Benelux, but could say that the safety protocols were not enforced strictly enough. Therefore, the court demanded 1,8 million euros instead of 5 million.[37]

One of these incidents was in 2005 when a tank with benzene flooded. Another example was in 2006 when benzene was leaking from the pipelines for multiple days.[38] Even though Dow Benelux did hire companies to repair this leak they did not close down the manufacturing site, putting their employees at risk of explosion.[39]

Groningen

In 2011 at one of the daughter companies of Dow Chemicals, Farmsun in Groningen, a fault in loading Sodium off of a train wagon caused for a fire.[40] While off-loading the Sodium off the train wagon several hundred kilos of sodium fell on the ground and caught fire. After several explosions in the building next to the train, the fire department was able to put out the fire.[41] The fire caused for a lot of smoke in the surrounding neighborhoods, the fire department recommended that people keep their windows and doors closed, and to stay inside.[42]

Current Emissions

Total emissions 108 Megatonnes of CO2 (2020)
Scope 1 Scope 2 Scope 3
28,2 Megatonnes of CO2 (2020) 11,46 Megatonnes of CO2 (2020) 69,257 Megatonnes of CO2 (2020)

Scope 1 and 2

For the Dow inc. GHG emissions report, Scope 1 includes Kyoto Protocol greenhouse gases carbon dioxide (CO2), methane (CH4 ), nitrous oxide (N2 O), hydrofluorocarbons (HFCs), perfluorocarbons (PFCs), sulfur hexafluoride (SF6),and nitrogen trifluoride (NF3) as well as any non-Kyoto greenhouse gases emitted.[43] Scope 2 includes carbon dioxide (CO2), methane (CH4) and nitrous oxide (N2 O).[44] Reported Scope 1 and 2 GHG emissions showed little change from 2018.

GHG Emissions (megatons of CO2e) [45]
GHG Emissions 2018 2019 2020
Scope 1 GHG Emissions 28,4 27,2 28,2
Scope 2 GHG Emissions - Market-Based 6,66 6,07 6,56
Scope 2 GHG Emissions - Location-Based 7,6 5,2 4,9
Scope 1 + Scope 2 GHG Emissions 35,06 33,27 34,76

Scope 3

Scope 3 emissions are defined by the GHG Protocol as indirect emissions from value chain activities.[46] Estimates include all or a subset of Kyoto GHGs [carbon dioxide (CO2 ), methane (CH4 ), nitrous oxide (N2 O), hydrofluorocarbons (HFCs), perfluorocarbons (PFCs), sulfur hexafluoride (SF6 ), and nitrogen trifluoride (NF3 )] depending on the category and estimation methodology.[47]

GHG Emissions (Megatons of CO2e) [48]
GHG Emissions 2018 2019 2020
Scope 3 GHG Emissions - Total 69,163 93,943 69,257
Category 1: Purchased Goods & Services 42,841 60,053 38,166
Category 2: Capital Goods 2,590 2,776 1,760
Category 3: Fuel & Energy-Related Activities 0,863 8,270* 4,745
Category 4: Upstream Transportation & Distribution 2,158 N/A N/A

(*)Value adjusted to reflect correction of an error since reported in the 2018/2019 Sustainability Report

Climate Policy and Plans

Dow Inc.

In order to set clear sustainability goals for 2030 and 2050, Dow Inc. came up with three different focus areas that matched their company the best. the three focus areas are Climate Protection, Circular Economy, and Safer Materials.[49]

Climate Protection

Targets:

  • By 2030, Dow will reduce its net annual carbon emissions by 5 million metric tons vs. its 2019 baseline (15% reduction).
  • By 2050, Dow aspires to be carbon neutral (Scope 1 + 2 + 3 plus product benefits).[50]

Dow aims to reach these goals through their climate action plan, which includes: Optimizing their facilities and Processes, Increasing Renewables in their Purchased Power Mix, Evaluating Investments in Carbon Capture Usage and Storage, Developing Low-Carbon Technologies for Emissions Reductions, and Deploying Materials to Help Reduce Emissions fr Customers and Industries.[51]

Circular Economy

Targets:

  • By 2030, Dow will help “stop the waste” by enabling 1 million metric tons of plastic to be collected, reused, or recycled through direct actions and partnerships.
  • By 2035, Dow will “Close the loop” by enabling 100% of Dow products sold into packaging application to be reusable or recyclable.[52]

One step that Dow has taken to reach these goals is by becoming an active partner in Operation Clean Sweep.[53] Through these partnership Dow states that they will prevent pellet, flake and powder loss to the marine environment. Each of the Dow facilities has completed a gap assessment to identify and eliminate pellet loss, furthermore their sites are also in the process of upgrading procedures and assets to drive gap closure and eliminate pellet loss.[54] Lastly, they have the company has increased their transparency in reporting on incidents of any uncovered release of plastic from inside Dow facilities.

Safer Materials

Dow inc. does not have a clear goal for 2030 or 2050 when it comes to innovating safer materials.

The steps Dow has taken to produce safer materials are[55]:

  • Assess all products in an appropriate manner to see where they can be improved at each stage of the product life cycle
  • Characterize all human and environmental risks of all products using the Dow’s risk characterization process/tool. The risk tier determines the required actions and reviews needed for the product.
  • Utilize the Business Risk Review process to assess and minimize possible adverse impact on people, property, and environment as a result of business activity.

Dow Benelux

In 2020 Dow Chemicals Benelux initiated a joint development agreement with Shell to develop electrified cracking technology. This technology can be powered by clean energy. Ethylene steam crackers are one of the technologies used by Dow and Shell. This technology relies on fossil fuel combustion.[56] Using renewable electricity could help decarbonize the chemical industry. Currently projects from shell and Amsterdam and Dow in Terneuzen are working to design and scale “e-cracker” technologies.[57]

The overall sustainability statement of Dow Benelux is that they are in agreement with the goals set by Dow Inc but Dow Benelux does have its own sustainability Targets.

Targets[58]:

  • reduce CO2 emissions from Terneuzen operations by more than 40% by 2030
  • Achieve net CO2 neutrality by 2050

This roadmap makes Terneuzen one of the most important sites and a role model for the Company's global transition.[59]


Dow Benelux aims to reach these goals through a three-phase plan:

Phase 1

The Terneuzen sites wants to start the construction of a clean hydrogen plant where by-products from core production processes would be converted into hydrogen and CO2. The hydrogen would be used as a clean fuel in the production process. The CO2 would be captured and stored until alternative technologies develop, and Dow will also look for ways to enable usage of the CO2 in its processes rather than storing it.[60] This hydrogen plant is expected to startup in 2026 and could allow Dow Benelux to reduce their CO2 emissions by approximately 1,4 million tons per year.

Furthermore, phase 1 would include additional investments in site infrastructure for CO2 liquefaction, air separation, hydrogen distribution and CO2 transport. [61]

Phase 2

In the second phase, by 2030, Dow states that they will capture CO2 from its ethylene oxide plant and replace some gas turbines with electrical motor drives.[62] These two steps together could avoid another 300.000 tons of CO2 per year.

Phase 3

In the third phase Dow aims to develop and implement additional breakthrough technologies to replace fuel usage in the production processes.[63] An example of this is the collaboration with Shell to work on "E-Crackers" as mentioned earlier.

Due Diligence

Conclusion

Dow Chemicals is one of the biggest companies in their field. With 109 manufacturing sites in 31 different countries and employing around 36,500 employees, this company has a moral responsibility to be a leader in fighting climate change.

Dow Chemicals and Dow Benelux have both set clear goals for 2030 and 2050 but the way in which these goals will be achieved is less clear. The three-phase plan set by Dow Benelux makes them one of the most important sites and a role model for the Company's global transition. However, the three-phase plan lacks concrete ideas and the scope 3 emissions.

These limitations with the climate goals of 2030 and 2050 make it difficult to assess if it is enough to stay within the set limits of the Paris Agreement.

References

  1. ↑ https://s23.q4cdn.com/981382065/files/doc_financials/2020/ar/2020_Dow_Inc_Annual_Report.pdf P211-216
  2. ↑ https://corporate.dow.com/en-us/about/company/history/timeline/golden-age-of-inorganics.html
  3. ↑ https://nl.dow.com/en-us
  4. ↑ https://s23.q4cdn.com/981382065/files/doc_financials/2019/ar/874827_029_CL_WEB.pdf
  5. ↑ https://corporate.dow.com/en-us/locations.html
  6. ↑ https://s23.q4cdn.com/981382065/files/doc_financials/2020/ar/2020_Dow_Inc_Annual_Report.pdf P4
  7. ↑ https://nl.dow.com/en-us.html
  8. ↑ https://corporate.dow.com/en-us/about/company/history/timeline/going-global-first-era-commercialization.html
  9. ↑ https://nl.dow.com/en-us.html
  10. ↑ https://nl.dow.com/en-us/locations/terneuzen.html
  11. ↑ https://nl.dow.com/en-us.html
  12. ↑ https://nl.dow.com/en-us/locations/terneuzen.html
  13. ↑ https://nl.dow.com/en-us/locations/terneuzen.html
  14. ↑ https://nl.dow.com/en-us/locations/terneuzen.html
  15. ↑ https://nl.dow.com/en-us/locations/terneuzen.html
  16. ↑ https://s23.q4cdn.com/981382065/files/doc_financials/2020/ar/2020_Dow_Inc_Annual_Report.pdf p6
  17. ↑ https://s23.q4cdn.com/981382065/files/doc_financials/2020/ar/Dow_Inc_2021_Proxy_Statement.pdf p19
  18. ↑ https://s23.q4cdn.com/981382065/files/doc_financials/2020/ar/Dow_Inc_2021_Proxy_Statement.pdf p19
  19. ↑ https://www.ad.nl/zeeland/nieuw-hoofdkantoor-dow-zie-dit-als-de-bol-com-van-de-chemie~aed92043/
  20. ↑ https://s23.q4cdn.com/981382065/files/doc_financials/2020/ar/2020_Dow_Inc_Annual_Report.pdf P6
  21. ↑ https://s23.q4cdn.com/981382065/files/doc_financials/2020/ar/Dow_Inc_2021_Proxy_Statement.pdf P62
  22. ↑ https://s23.q4cdn.com/981382065/files/doc_financials/2020/ar/2020_Dow_Inc_Annual_Report.pdf P7
  23. ↑ https://s23.q4cdn.com/981382065/files/doc_financials/2020/ar/Dow_Inc_2021_Proxy_Statement.pdf P38
  24. ↑ https://s23.q4cdn.com/981382065/files/doc_financials/2020/ar/2020_Dow_Inc_Annual_Report.pdf P169
  25. ↑ https://s23.q4cdn.com/981382065/files/doc_financials/2020/ar/2020_Dow_Inc_Annual_Report.pdf P73
  26. ↑ https://nl.dow.com/en-us.html
  27. ↑ https://nl.dow.com/en-us.html
  28. ↑ https://www.koninklijkhuis.nl/onderwerpen/onderscheidingen/predicaat-koninklijk/overzicht-predicaat-koninklijk
  29. ↑ https://www.uwv.nl/overuwv/Images/uwv-register-now-vijfde-aanvraagperiode.pdf
  30. ↑ https://corporate.dow.com/documents/about/066-00338-01-2020-esg-report.pdf p35
  31. ↑ https://corporate.dow.com/documents/about/066-00338-01-2020-esg-report.pdf p35
  32. ↑ https://corporate.dow.com/documents/about/066-00338-01-2020-esg-report.pdf P53-59
  33. ↑ annualreports.com/HostedData/AnnualReportArchive/t/NYSE_DOW_2015.pdf
  34. ↑ https://www.annualreports.com/HostedData/AnnualReportArchive/t/NYSE_DOW_2016.pdf
  35. ↑ https://www.annualreports.com/HostedData/AnnualReportArchive/t/NYSE_DOW_2017.PDF
  36. ↑ https://www.nu.nl/economie/3734244/miljoenenboete-chemiebedrijf-dow-.html?_ga=2.138385145.893487642.1643714626-1201189375.1643036636
  37. ↑ https://www.nu.nl/economie/3734244/miljoenenboete-chemiebedrijf-dow-.html?_ga=2.138385145.893487642.1643714626-1201189375.1643036636
  38. ↑ https://www.nu.nl/economie/3734244/miljoenenboete-chemiebedrijf-dow-.html?_ga=2.138385145.893487642.1643714626-1201189375.1643036636
  39. ↑ https://www.nu.nl/economie/3734244/miljoenenboete-chemiebedrijf-dow-.html?_ga=2.138385145.893487642.1643714626-1201189375.1643036636
  40. ↑ https://nos.nl/artikel/310870-brand-in-natriumfabriek-onder-controle
  41. ↑ https://nos.nl/artikel/310870-brand-in-natriumfabriek-onder-controle
  42. ↑ https://nos.nl/artikel/310870-brand-in-natriumfabriek-onder-controle
  43. ↑ https://corporate.dow.com/documents/about/066-00338-01-2020-esg-report.pdf P65
  44. ↑ https://corporate.dow.com/documents/about/066-00338-01-2020-esg-report.pdf P65
  45. ↑ https://corporate.dow.com/documents/about/066-00338-01-2020-esg-report.pdf P180
  46. ↑ https://corporate.dow.com/documents/about/066-00338-01-2020-esg-report.pdf P66
  47. ↑ https://corporate.dow.com/documents/about/066-00338-01-2020-esg-report.pdf P66
  48. ↑ https://corporate.dow.com/documents/about/066-00338-01-2020-esg-report.pdf P180
  49. ↑ https://corporate.dow.com/documents/about/066-00338-01-2020-esg-report.pdf P33
  50. ↑ https://corporate.dow.com/documents/about/066-00338-01-2020-esg-report.pdf P34
  51. ↑ https://corporate.dow.com/documents/about/066-00338-01-2020-esg-report.pdf P36
  52. ↑ https://corporate.dow.com/documents/about/066-00338-01-2020-esg-report.pdf P44
  53. ↑ https://corporate.dow.com/documents/about/066-00338-01-2020-esg-report.pdf P47
  54. ↑ https://corporate.dow.com/documents/about/066-00338-01-2020-esg-report.pdf P47
  55. ↑ https://corporate.dow.com/documents/about/066-00338-01-2020-esg-report.pdf P48
  56. ↑ https://corporate.dow.com/en-us/esg/report/environmental-performance/climate-protection.html
  57. ↑ https://corporate.dow.com/en-us/esg/report/environmental-performance/climate-protection.html
  58. ↑ https://investors.dow.com/en/news/news-details/2021/Dow-Benelux-outlines-roadmap-to-support-Dutch-Climate-Agreement-achieve-CO2-emissions-neutrality/default.aspx
  59. ↑ https://investors.dow.com/en/news/news-details/2021/Dow-Benelux-outlines-roadmap-to-support-Dutch-Climate-Agreement-achieve-CO2-emissions-neutrality/default.aspx
  60. ↑ https://investors.dow.com/en/news/news-details/2021/Dow-Benelux-outlines-roadmap-to-support-Dutch-Climate-Agreement-achieve-CO2-emissions-neutrality/default.aspx
  61. ↑ https://investors.dow.com/en/news/news-details/2021/Dow-Benelux-outlines-roadmap-to-support-Dutch-Climate-Agreement-achieve-CO2-emissions-neutrality/default.aspx
  62. ↑ https://investors.dow.com/en/news/news-details/2021/Dow-Benelux-outlines-roadmap-to-support-Dutch-Climate-Agreement-achieve-CO2-emissions-neutrality/default.aspx
  63. ↑ https://investors.dow.com/en/news/news-details/2021/Dow-Benelux-outlines-roadmap-to-support-Dutch-Climate-Agreement-achieve-CO2-emissions-neutrality/default.aspx
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