Feike Sijbesma , CEO and Chairman Managing Board, of the €9 billion Dutch nutrition and chemicals group, DSM, is one of strongest proponents of shifting from fossil fuels to processes that use biological materials.
A regular speaker at the World Economic Forum in Davos, Sijbesma is passionate about reducing carbon emissions and larger corporate responsibilities towards the environment and public health.
We are a 112-year-old company and we have changed at least twice — first from coal mining to chemicals after the second world war and in the last 10 years from a bulk chemical company to life science and material science. Why the transformation? Because we feel that the world around us is changing and we need to adapt.
Our company aims at important mega-trends in the world with the simple philosophy that the world will spend a high amount of money, I assume, for solving its biggest problems.
If climate change, new energy, health and wellness are big issues for the world, then I assume the world will spend a lot of money to address those issues and if we can provide solutions that would be very nice. It sounds simpler than it is in practice because we changed completely from everything we were good at. And now we are good at something else.
Most corporates talk about sustainability or CSR as an aside. You have turned it into a business.
I don’t like ‘CSR’. It’s served its purpose in the past. We said the whole company is one big CSR thing because the company is should do socially responsible things. In my opinion all companies should do that.
Are you looking to replicate some of your environment-related businesses, for example, the bio-fuels initiatives in India?
Till 150 years ago all our energies and materials came from renewable — solar, wind, and also from biomass. After that the world started using coal, then oil and then gas for energy, for transportation, for materials.
One day that circus will be over — out of oil, gas, certainly coal. But not only out of availability but also out of sustainability.
So, the availability, sustainability and also the economics will drive us out of the fossil period one day and then we go back to what we did before — solar, wind, water and bio-mass.
So, back to the future part two; part two because we will do it not in exactly the same way as we did in the past but with new technologies. Out of that philosophy we look to agriculture.
The food component of our agriculture we eat, but can we do something with the waste streams for energy? We said we need to convert it. We will look to India and China also. But, of course, we will also look to policy in these countries.
We are interested in India and China. There is huge potential as a lot of agricultural material is being wasted in this country.
In the bio-energy and biofuels space there is one criticism that it is not viable.
If we now look to biofuels we can make in US I think in a couple of years they will become competitive. It also has something to do with the fact that oil’s above $100 a barrel. If oil dropped to $50 a barrel then it will be difficult but I don’t think oil will drop to $50 a barrel because the new oil fields have a cost price of $70-80 a barrel.
If oil is in that arena, I think those (biofuels) can be more competitive.
Or, like in India, if you subsidise fossil resources then they are much cheaper. In the end we need to charge the real costs.
You’ve also spoken earlier about having an accounting standard for CO2, such as the IFRS for financial accounting. Do we need a global body for this?
First, we believe CO2 should have a price. Today, CO2 only has a price in Europe and not in other parts of the world. I think the goal of having a CO2 price is not to introduce a new toy for the financial world to trade in but to drive the world into a new direction.
Second, you could think about different systems and even IFRS type of systems on how you can judge a company on their contribution on people and planet.
There are a lot of projects are going on at this moment, especially in the world of business council, for sustainable development, to club all the companies in the world that want to be active in sustainability in Geneva. And we are working out how such a system could work.
In the past, the world was simple, companies take care of profits and economic growth and all common interests were being arranged by the Government. In the last 50-100 years companies became so powerful, so impactful, you have companies that are bigger than countries. If you have more impact you need to show more responsibility.
On the one hand you are asking for carbon emissions to be controlled on the other hand you’ve said that Europe should not go beyond a point in emission controls. Is there a contradiction?
Europe now has a goal for 20 per cent reduction by 2020. China has 50 per cent increase by 2020, US has 3 per cent decrease and India and others have no public goals. So, Europe has the strongest goals.
The European Commission says let’s see how we can increase the 20 per cent (reduction) by 2020 to 30 per cent. And I said that’s very noble but Europe should not place itself totally out of the world because there is a level playing field, because if Europe says it is at 20, China is not at any minus only at the plus. The US is at minus 3 per cent, so why is Europe negotiating with itself to increase the 20 to 30 per cent?
I would like to see more of a global debate that we get to a more level playing field. Otherwise, I am afraid that activities will move out of Europe to other regions in the world because if you need to decrease more than the rest, some people will move activities outside Europe. It doesn’t matter if you are manufacturing CO2 anywhere in the world, it comes in the same air.
A number of foreign investors are voicing concerns over the economic climate, political uncertainty and policy decision paralysis in India. What is your assessment?
Very positive, overall. We have three billion people in Asia; in the coming decade it will grow to 4 billion. We have 500 million Europeans and we will grow to 550 million.
We will have 50 million, maybe 70 million more Europeans, and maybe a billion more Asians in the coming decade. So, already from a numbers point of view it’s growing faster. Second, there is the whole middle class which will develop over time and will have buying power.
If you look at the demographics and the absolute numbers, you need to invest in those countries, there is the future.
Are there certain concerns? Yes. In India we see that some of the infrastructure investments are lagging compared with other countries.