Document vpoLXrZ6Jb52eqR5M0aLZYjm

TO: Distribution TfGSr jk: MSffc; ajq; RF XF: - Interoffice Communication FROM: DATE: SUBJ : T. G. Grumbles September 13, 1989 VISTA RECENT DUPONT STATEMENTS ON "CORPORATE ENVIRONMENTALISM" For those of you who haven't seen them, a copy of an article from the CMA News and the chairman's page from Dupont's 2nd quarter report is attached. Key points in the article include: 1. The real environmental challenge is not in responding to the next regulatory proposal but to achieve better environmental performance. Compliance may not be a benchmark of good performance. 2. Corporate Environmentalism is defined as an attitude and a performance commitment that place corporate environmental "stewardship" in line with public desires and expectations. 3. The most powerful environmentalist group in society today is the general public. Environmentalism is the "mainstream". 4. Industry must restore credibility and that can only be done by performance. 5. In the future, decisions cannot be made on a technical or scientific basis only. The points made in the article are not new, but further emphasize the profile these issues are beginning to have in chemical companies we compete with and do business with. A continued commitment to implementing our newly adopted environmental policy and subsequent actions taken should allow us to improve our performance and maintain a viable business in the future. As we enter a period of restricted financial flexibility we must keep the environmental expenditures and programs in a proper perspective and assure the long term needs and benefits are considered as well as immediate compliance needs. A 6 "v--------------------- T. G. Grumbles dlj .827 Attachment vvv 0000139^7 HIGHLIGHTS (Dollars m millions, exceoi per share! Earnings Per Snare o' Common Stock. Dividends Per Share o'Common Stock . . yc-'^s E^cea j_ne3C 1989 1988 S9.276 S 714 S 3.02 S 1.05 S8 342 S 639 S 2 67 S .95 S * Montr-s E^aec o--e30 1989 1988 S17.952 $ 1,450 s 6.10 s 2.10 S16.200 S T 229 S 5 12 S i.80 TO DUPOXT STOCKHOLDERS As reported on the next page, we had a strong second quarter. The increase in earnings reflected continued strength m worldwide demand in a broad range of the company's businesses, with particularly good results for industrial products and petroleum. . Dunnp the gtiariftr.wiaatsnfnriisftii anew nn the . role of Du Pont as a corporate environmental steward. I stressed this responsibility during a recent speech to the American Chamber of Commerce (U.K.) in London. Public awareness and concern over the environment have been building worldwide during the past two decades. During much of that time, however, many in business looked at environmentalism as a kind of fringe activity outside the political and cultural mainstream Consequently, industry too often remained insensitive to public opinion in environmental matters, and when we dealt with the issues, we frequently did so from a strictly technical or scientific viewpoint--as if public concerns were somehow less important. Now environmentalism is the mainstream, so compames that lack credibility in the environmental affairs arena must work hard to change that perception and earn the public'strust. Du Pont has had its share of environmental problems: we still do. But some key actions, such as our CFC phaseout and replacement program and our eftorts to come to grips with the plastic waste issue, demonstrate the course we've charted for the future. At Du Pont, we won t be content to be part of the problem. We intend to be part of the solution. For example, during the 1980s we reduced the amount of waste generated at our plants by nearly 35 percent. We re going to at least duplicate that level of progress during the next decade. Du Pont wiii also expand its existing wildlife habitat enhancement pro gram to include at least 1.000 square miles of land managed to support wildlife. And we'll be stressing community involvement at plant sites to make sure that our neighbors are fully informed and understand company activities that relate to public health or the environment. I call these and other things we re doing corporate environmentalism. bv which I mean an attitude and a performance commitment that.olac&corporate environ-, mental stewardship fully in line with public desires and -exnpctarinns. Jn the future, the companies that succeed m increasing their value fo customers, shareholders, employees, and society will be those that have made the commitment to operate m an environmentally sound manner. We intend Du Pont to be among them. Eagar S Woolard Jr Chairman 2 VVV 000013948 CMANEWS September 1989 Toward corporate environmentalism When E. S. Woolard recently became chairman of the Du Pont Company, he also became the company's "chief envi ronmentalist. " His remarks are adapted from a speech before the American Chamber of Commerce in London. As I begin my tenure as Du Pont's chair man and look ahead to the challenges Du Pont faces in the next decade and beyond. I see one of our chief concerns being environmental stewardship. Mr. Woohrd The environmental issues that indus try faces around the world are at this point pretty clear cut. The Valdez spill did not fundamentally change the issues, rather it demonstrated again that avoiding environmental incidents remains the single greatest imperative facing industry today. This realization has been too slow in coming, including to mv own company. The real environmental challenge is not one of responding to the next regulatory proposal. Nor is it making the environ mentalists see things our way. Nor is it educating the public to appreciate the 10 benefit of our products and thus tolerate their environmental impact and that of Let me state plainly the fundamental environmental challenge to companies like Du Pont: Our continued existence as a leading manufacturer requires that we excel in environmental performance and that we enjoy the nonobjection-- indeed even the support--of the people and governments in the societies w here we operate around the world. What's at stake is the ability of much of our present manufacturing industry to continue to sene well the growing needs of society. Environmentalism is now a mode of operation for every sector of society-- industry included. We in industry have to develop a stronger awareness of our selves as environmentalists, I am person ally aware that as Du Pont's chief executive. I'm also Du Pont's chief environmentalist, I will probably never be in agreement with all that Greenpeace or the Green Party believes. And I don't think for a minute that by adopting a more proac tive emironmental attitude we're going to see the criticism of industry by acti vists disappear. In fact, it is probable that as industry becomes more proactive, emironmental groups may become more extreme in their positions in order to maintain their identity. In any case, there will continue to be numerous cases of controversy and many situations in which reasonable people can disagree. But at the same time there are points where our interests are the same, and we in industry in no way onmprnmisg. nur responsibility to shareholders when we admit it. We should seek out those opportunities to align ourselves with the emironmental community and demon strate where environmental and indus trial goals are compatible. In other words. I'm calling for cor porate environmentalism--which L define as an attitude and a performance commitment that place corporate envi ronmental stewardship fully in line with public desires and expectations. What historically has stood in the way of corporate environmentalisr becoming a reality? First, our corporate insensitivity t public opinion has gotten in the way For a long time there was a perceptioj in industry that environmentalism wa somehow a fringe activity, out of stej with the mainstream of society. Beyond the small population of exec utives who dealt with environmenta issues, many manufacturing executive saw environmentalism as a nuisanct and environmentalists as radicals of on< v ariety or another. But the most powerful environmen taJist group in every modern society i now the general public which ha declared in opinion polls and in election tht the environment will be protected Enviromentalism is the mainstream. The second thing that's gotten in th< way of developing a legitimate cor porate environmentalism is industry' lack of credibility. It has probably nev e: been lower than it is right now in thv wake of the Valdez accident. "Credibility is cirscih tied to performance. We must adopt e-:er. greater safeguard;: ic avoid incidents." WV 000013949 I recall one headline in a majo metropolitan daily that ran an editoria the week after the spill. The headlin< read "Trust us. they said." We cai expect to hear echoes of that for a Ion-, time to come. How do we build credibility? On> thing is certain: Credibility is direct! tied to performance. We must adop even greater safeguards to avoid inci dents. When problems do occur, vvi must swiftly and effectively respond The .Alaskan oil spill is stark evidence o the realitv. third obstacle that can get in the . our becoming corporate environ mentalists is the technocracy nf modern industrial corporations. Science and technology are marvelous things. No one knows this better than those of us who work at Du Pont where we have witnessed the many good things that sci ence and engineering make possible in our lives. But the flip side is that we sometimes position ourselves on an environmental issue on the basis of available technical or scientific data alone. We have been too inclined to act as though public wishes and concerns matter less than the technical opinions of .scientist and engi neers. But in fact public opinion mast be dealt v. ith regardless of the technical _facts^ 1 don't mean to say that industry Du Pont sets environmental agenda Du Pont has developed a corporate agenda for environmental leadership for the next decade. To fulfill its goals, the company will: reduce total hazardous waste by 35 percent at manufacturing facilities by 1990 and duplicate that level of progress during the next decade. Waste reduction will be a primary technical objective during the 1990s. manage at least 1,000 square miles of land to enhance habitat for wildlife, with a special emphasis on wTetlands. eliminate heavy metal pigments used in the manufacture of some plastics. take an increasing responsibility for the efficient and environmentally acceptable disposal of the plastic portion of the global solid waste stream. Du Pont's first plant to reclaim and recycle high-value polymers from municipal wastes will start up early next year. involve community representa tives at all manufacturing sites in all major planning activities relevant to public health or the environment. consider environmental perfor mance in determining compensation for executives from middle management to senior officers. Indicatin' of Du Pout's waste minimization efforts, this operation at its Sabine River Works in Orange. Tex., recaptures for reuse granules of polyethylene that otherwise would go into the waste stream. should roll over and play dead every time someone makes a protest. The recent scare in the United States over a chemical growth regulator used in apples points out that economic deci sions should not be made on the basis of an alarmed public's reaction to over stated news stories. But neither can they always be made solely on the technical merits. There is a point at which every company should have the good sense to know whether persisting with a particular position is in the best interest of society at large, whatever the technical merits of the argument. To develop the understanding of when that point is reached will require a new corporate sensitivity to public con cerns and an opening of new channels of communication with the public. We will also have to change some cor porate attitudes. For example, the truly _ farsighted manager will not spend just what is necessary to meet minimum _ technical requirements of the law. Where reasonable improvements can be identified that will bring long-term environmental benefits and enhance public acceptance, we must have the vision to implement such changes--even at cost penalties beyond what is necessary for mere compliance. In the environmental arena, the issues VVV 000013950 are beyond the scope or ability of anv one company or any one country to cor rect. That's no excuse for not embarking on individual or unilateral action. But we have to keep in mind that the economic consequences of environ mental action in terms of trade-offs, standards of living and industrial com petitiveness affect the whole w orld, and thus we need more international mech anisms for addressing environmental issues. The United Nations Environment Programme is doing good work. And the efforts to build an environmental con sensus in the European Community will set important precedents. The primary point for a manufac turer is that industry needs to maintain the same high environmental perfor mance standards regardless of the coun try of operation. The actions of anv one company will continue to reflect on industry as a whole, and it's fair to say that manufacturers around the world are in this together, Industry has a checkered past of suc cesses and failures in environmental matters, and as a result, manufacturers have been painted many colors in recent years. That will have to change. In the future we will have to be seen as all one color. And that color had bet ter be green. Z 11 ......r