Environmental value creation

Our sustainability objective is to create more value from fewer resources – right across the value chain – by making more effective use of natural resources in our own operations and through our products.

In the chemicals and coatings industries, we are dependent on the materials we use to manufacture our products. Raw materials extraction and production, energy supply, our own operations and the use and disposal of products used by our customers can all impact the environment. Our activities and products can also make a significant positive contribution.

Circular activity

We are using circular economy principles as we strive for radical resource efficiency:

• Renewable sources: We are not only aiming to source more renewable raw materials and energy, but also initiate or contribute to programs with a range of partners to accelerate production and adoption of these supplies. Examples include our bio-based materials partnerships and programs for wind energy and renewable steam. See Note 8.
• Circulating products, components and materials: Circulating our products can be a challenge because they end up as essential ingredients or offer protection that is integral to our customers’ products. We therefore seek out opportunities for our “waste” to become a secondary raw material and use other people’s “waste” as our secondary raw material. We currently have two main focus areas – products that do more with less, use less material and last longer; and initiating partnerships to re-use unwanted household paint through our ReColor program. See Notes 4 and 8.
• Designing out negative externalities: This is a core element of our work with suppliers, our own operations and the products/services we sell. Examples include operational eco-efficiency programs; investment assessments which incorporate carbon pricing; products/services that reduce energy use for our customers, or improve air or water quality compared with standard products. See Economic value creation and Notes 4, 7 and 9.

Lifecycle assessment

Lifecycle thinking is the basis for all our sustainability work. Our standard assessment method is eco-efficiency analysis (EEA), based on a combination of lifecycle assessments and lifecycle costing. Assessment work is carried out by business and company level specialists and is based on ISO 14040-44 and a company lifecycle assessment database.

Lifecycle assessment has been included in a range of processes for many years. As part of the current strategy, the company has developed a number of common processes – either at company or Business Area level – which include lifecycle assessment.

We are taking an active role in developing good practice and setting standards for the industry, working with the WBCSD and with CEPE on the EU PEF pilot. See Decorative Paints in the Business performance section and Note 3.

Carbon footprint assessment

We measure the carbon footprint of all our key value chains (487 in 2016) using a full cradle-to-grave lifecycle assessment. This is the basis of our carbon footprint key performance indicator.

Eco-premium solutions

AkzoNobel’s eco-premium solutions concept requires the assessment of sustainability aspects along the value chain. It encourages the development of more innovative, sustainable products. We continuously aim to reduce the environmental footprint of our product value chains. We are also developing environmental product declarations (EPDs) for some products as part of our marketing activity. See Note 4.

Other company processes

Lifecycle assessments are integrated into the company’s Innovation process and the assessment of our major investment processes, which also include a value on carbon. See Economic value creation.

Eco-systems and biodiversity

We recognize our dependence on eco-systems for resources, such as fresh water, for renewable materials and for the part they play in maintaining the quality of our air, water and soil and also the impact we have on these eco-systems.

According to the Millennium Ecosystem Assessment, the main drivers for biodiversity impact are habitat change (land use change), over-exploitation, invasive alien species, pollution and climate change. An assessment carried out in 2013 indicated that the main impacts were up and downstream of our operations, with the main drivers being land use/transformation and climate impact. Our current activity focus is through our resource efficiency programs:

• Reducing climate impact across the value chain
• Water use and discharge in water scarce areas
• Sourcing renewable raw materials
• Product assessments for our eco-premium solutions (which already include land use)

Operational eco-efficiency

The improvements in our own operations are coordinated through our operational eco-efficiency program. The focus of this agenda is to increase raw material efficiency, reduce energy consumption and decrease both emissions and the production of waste. Improvements include many small site contributions, such as upgrading existing processes, rationalization of the manufacturing footprint and application of best available technology for new investments.

COP21 Paris agreement and science-based targets

We recognize that climate change is one of the biggest challenges that will shape the way we do business now and in the decades to come. We support the Paris agreement reached at COP21 to keep the global average temperature increase well below 2°C above pre-industrial levels and limit the increase to 1.5°C. As such, we have committed to setting a science-based target. An initial assessment has shown that our current target – a 25 to 30 percent reduction (per ton of sales) in our product cradle-to-grave carbon footprint between 2012 and 2020 – is well below the trajectory as suggested by available science-based target methodologies. We will use these methodologies as input for our Planet Possible 2025 strategy update.

Avoided emissions

In addition to minimizing our negative impact in the environmental dimension, we also set out to scale up our positive impact – such as developing solutions that help customers avoid carbon emissions. One example is the Intersleek 1000SR, biocide-free fouling control coating we launched in 2013. The product reduces drag on vessels, resulting in up to 10 percent lower emissions and fuel consumption, leading to subsequent cost savings for our customers. Based on the total number of commercial vessels using Intersleek at year-end 2016, an estimated 8 million tons less CO₂ is being emitted than would have been the case if these vessels had been using traditional biocidal fouling control paints. This estimate is based on the Avoided Emissions guidelines that we developed together with ICCA (International Council of Chemical Associations) and the WBCSD.