Circularity and Sustainability: One Company’s Paths to Progress

Young scientists study the brain

By Martin Vlak, SVP Sales & Market Development, Coatings & Adhesives at Covestro, North America

The earth’s ongoing environmental crisis continues to mount on all fronts, from rising energy expenditure and carbon footprint to pollution of the natural world and climate change.

Thankfully, an elevated consciousness is emerging around these issues in almost every sector of the economy, including in the materials industry. There is finally real business commitment behind the widespread desire to mitigate the worst effects of the crisis, while continuing to provide practical solutions for the ongoing realities of modern life, including increased urbanization and population growth.

At Covestro, we have spent the past decade taking a hard look at ways in which we can begin solving pressing environmental problems, aiming to mitigate them in the short term and eliminate them in the long term. We believe the key to achieving this is to adopt a business philosophy that begins and ends with circularity.

These goals will not be easy to achieve, but nothing worthwhile ever is. While there is much that will be revealed in the coming years, what has become undeniable is that we won’t solve this problem unless our environmental solutions take the economy and business concerns into account. We believe that cutting-edge science, combined with increased consumer demand for sustainable solutions, will drive the changes needed to take us to a brighter, more circular, and more sustainable future.

One of the hardest truths about the factors that brought us to this crisis is the business incentives that have driven it, which have skewed many industries toward wanton creation of waste, pollution, and inefficiency. For many years, corporate conventional wisdom favored boosting the short-term bottom line regardless of long-term consequences. Today, as we begin to understand the severity of the issues we are facing, these attitudes are changing
quickly, in many cases at the highest levels of today’s largest corporations.

As we have attempted to find effective paths to progress on sustainability, circularity, and finding ways to achieve them within a modern, successful business, we think about the problem within three primary domains: Research, Collaboration, and Commitment.

Historically, research has been Covestro’s strong suit. Since its inception, Covestro has focused on scientific discovery, creating novel and useful resins for coatings and adhesives with breakout qualities that improve product performance. Over the past few years, however, the focus of this research has been radically reconfigured.

Science is the study of constraints. The scientific method advances our understanding by constraining all variables but one and looking for differential effects. We navigate toward what we want to understand about the world by choosing which variables to hold steady and which to move. In earlier years, our research indexed toward optimizing performance and cost while pioneering new functionalities. Today, however, our goals have changed. Now our primary research goal is finding ways to keep performance and cost steady while decreasing energy usage and raw material inputs.

This change of focus is the most fundamental step we can take toward finding new sustainable, circular methods of material production that keep both the economy humming and the planet healthy. This new approach has already paid off on several fronts, steadily yielding new methods and materials that decrease energy usage while substituting recycled materials and plant-based alternatives in place of fossil-derived substances.

Covestro scientists recently released an isocyanate clearcoat hardener with a carbon content sourced 70% from biomass instead of fossil fuels, reducing its overall carbon footprint by 30%. Another example is a resin for flooring applications that is made with up to 52% plant-based materials. While biobased paints have long struggled to meet the intense demand of high-traffic flooring, our scientists were able to find a way to make one that wasn’t just planet-friendly but could stand up to the rigors of modern life.

Our internal work is only one part of the overall solution. Many innovative new materials and methods now come through collaboration with research partners in other parts of the industry. We recently worked with pioneering biotech company Genomatica to find ways to use biotechnology to replace fossil-based feedstocks with plant-based ones.

In the past year, we successfully produced significant volumes of a plant-based version of HMDA (hexamethylene diamine), a key precursor for several coatings and adhesives, as well as for a widely used type of nylon, nylon-66. This breakthrough shows that plant-based materials are not only possible, but also practical and economically feasible. Approximately 2 million tons of HMDA is used each year, but until now it has been manufactured exclusively from fossil feedstocks. Now that we can produce ton-quantities of plant-based HMDA, we can begin the process of transitioning materials for the automotive, construction, furniture, and textile industries into sustainable solutions.

This is an important breakthrough on its own, but the way it happened is almost as important. We believe that the days of the lone innovator—or lone innovative company—are over. The climate crisis is a species-level
phenomenon. Of course, our company still wants to compete in the marketplace, but we also understand that we are quite literally all in this together. Collaboration between whomever or whichever institutions are best suited to attack a given problem should become the norm as we move forward in this new era.

Collaboration doesn’t stop with research, however. Our industry partnerships and the consumers they serve are also part of this change in thinking. Realigning business and financial incentives won’t happen overnight. It requires solving the chicken-and-egg problem of consumer demand. Without demand from consumers, our partners have no desire to stock circular, sustainable materials that decrease pollution and energy usage. Without that, the research we are funding will be a losing investment and make the next round of investment difficult to justify to shareholders. The answer, of course, is increased awareness of the progress being made on sustainability, and we are working hard to make sure this information filters out to our partners and the public. The business end of the coatings industry is an ecosystem in which each part depends on all the others. Holistic change will happen when the entire ecosystem works in unison to create a sustainable future.

At Covestro, applying all of the above has required a commitment from the highest levels of the company. Adopting circular and sustainable methods in our manufacturing facilities as well as refocusing research on sustainable solutions is not something that happens automatically. As a result of many discussions over many years, we are now committed to a series of specific, actionable steps that will ladder to our ultimate goal of complete circularity of materials and processes that are 100% carbon neutral—both upstream and downstream—of what we do.

We have committed to achieving climate neutrality in our internal operations by 2035, with several milestones along the way to keep us on track with this goal. We break this down into three scopes. Scope One is our direct emissions. Scope Two is indirect emissions from the production of purchased electricity, steam, heat, and cooling. Scope Three is controlling indirect emissions of upstream and downstream processes in the value chain. By 2030, we want to reduce the CO2 footprint of our products by 25%.

While it may seem counterintuitive, between research, collaboration, and commitment, the last of these is by far the easiest to fulfill. This is because when we look at the path forward, the only rational choice we see is to double down on sustainability. Research is complex, branching in many different potential directions. Collaboration is complex and multidimensional, involving many parties that must be in alignment. Commitment, though? Commitment can happen today, within our company, within the industry, and within you. The question is not should we be more sustainable; it is, “How can we achieve it?” Over the coming months and years, we hope to spread this clarity to our customers and consumers at-large. As this change happens, and sustainability becomes a differentiator instead of a burden, the business case for circularity becomes more and more obvious.

In his role as head of Coatings and Adhesives for the North America region, Martin Vlak is responsible for regional strategy development and execution and the joint development of Covestro’s global coatings and adhesives strategy.