Breakthrough: The Michigan Source Reduction Initiative

Setting the Stage for the New Normal

Written by Neil Hawkins and co-authored by Linda Greer, John Ehrmann, and David Buzzelli

Relationships between environmental groups and businesses were not ‘normal’ when I came to Midland, Michigan in 1988 to start my career at The Dow Chemical Company. At best, there were periods of détente, interrupted by conflict, much of which took place in the courtroom or with the media. Had someone suggested that we could find a way to collaborate with environmentalists for mutual benefit, they would have been laughed from the conference room. ‘Tolerate’ was the best we could imagine then.

Had someone suggested that we could find a way to collaborate with environmentalists for mutual benefit, they would have been laughed from the conference room.

That changed with the Michigan Source Reduction Initiative (MSRI) that launched Dow into a collaborative approach and opened eyes and minds to both the need and power of business to help the world achieve sustainable development.  Designed and implemented by Dow’s Michigan Operations, the Natural Resources Defense Council (NRDC), local environmental groups including Lone Tree Council, and the Ecology Center of Ann Arbor and facilitated by the Meridian Institute, the MRSI was the first cross-sector collaborative effort of its kind for the company. The success—and the learning—from this effort not only ensured the project lived up to its name by significantly reducing pollutants at the source, but also by setting an example and standard for future collaborations, such as the US Climate Action Partnership formed in 2006, which would have otherwise been unimaginable.

Trust Opens Opportunity
Spawned by the trust developed from productive working relationships with leading environmentalists in the mid-1990s, the vision for the initiative emerged from a desire to find ways to identify opportunities for pollution prevention, rather than rely on end-of-the-pipe regulation, which often ended up in litigation before it was implemented. The MSRI, with authority from their respective partner organizations, negotiated quantitative goals for reductions, defined milestones, established how NGOs could participate within the plant, and agreed how progress would be measured, publicly reported, and validated. A critical success factor was the agreement by the MSRI to bring in the late Bill Bilkovich, an independent chemical engineering and pollution prevention expert, to facilitate and brainstorm pollution prevention projects inside the plant—at the unit operation level—alongside Dow engineers. Vetted and approved by all participants, Bill had the confidence of Dow leadership to explore and engage with various innovative ideas and questions, and he quickly became widely trusted and respected.

MSRI Solved Problems for All
The environmentalists wanted a significant reduction of pollution—a 35 percent reduction in hazardous by-product materials and a 35 percent reduction in release of hazardous material to air and water. Dow wanted to maintain its profitability. By the end of the project, the goals by all participants were either met or exceeded. Dow reduced production of a list of hazardous by-product materials by 37 percent and reduced the release of these materials to air and water by 43 percent. In addition, Dow’s investment of $3 million to make those changes resulted in an estimated savings of more than $5 million per year, and in some cases, improved production capacity and product quality. The majority of the projects required relatively little investment, most of which was readily available from existing small capital project budgets in each affected Dow business unit. The extraordinary results from combining small capital and positive collaboration was eye opening.

The extraordinary results from combining small capital and positive collaboration was eye opening.

Lessons Learned

Lead with relationships: MSRI was built on a foundational set of relationships that many Dow people, such as Jerry Martin and Rick Olson, had cultivated over a long period with people on all sides of the issues. This kind of initiative from individuals in industry formed an essential bridge for the collaboration. It is perhaps the first and most important lesson in multi-sector collaborations: individuals in industry need to take the initiative to build relationships and bridges. Contributions from strong individuals make a real difference in the success of the collaboration.

Develop and agree to clear and transparent objectives and milestones: These objectives and milestones were reinforced by meetings that brought together senior Dow leaders, mid-level Dow manufacturing leaders, junior Dow plant engineers, and environmental activists to review progress and determine priorities and next steps.

Find the right facilitator: Bill Bilkovich gained trust from everyone as he worked tirelessly to identify opportunities for improvement. The inclusion of a trusted and highly skilled mediator throughout the collaboration was critical. He provided an objective “ear” for all parties as well as facilitating the periodic meetings of the group and helping to problem-solve between meetings.

Focus on the facts first: The collaboration focused on data collection and making decisions together on commonly agreed upon data sets, not on assumptions, extrapolations, inferences, or irrelevant history.

Expect accountability and flexibility: While there was accountability built into the process, there was also flexibility that allowed us to make modifications when minor obstacles arose. Because we spent the time to hammer out explicit and quantitative goals and objectives, the roadmap was clear. We were able to agree on adjustments, such as modified timelines.

Recognize the needs of the participating activist organizations: These organizations will require and need transparency in the process in order to maintain credibility with their constituencies throughout. This was a key hurdle for Dow, but a necessary step to progress and to cooperation from external stakeholder audiences.

Business Benefits from the Michigan Source Reduction Initiative

Cost Savings: Dow directly benefitted from ongoing cost savings of millions of dollars per year.

Waste Reduction: From 1996 to 2005, Dow achieved waste reductions of 1.6 billion pounds, water use reduction of 1.8 billion pounds, energy savings of 900 trillion BTUs, and reduced injuries by 84 percent. In this timeframe, Dow saved more than $5 billion on a $1 billion investment.

Confidence: Dow learned that these kinds of long-range 10-year goals and collaborations needed to become an essential component of Dow’s corporate strategy. In 1996, Dow announced its first set of 10-year sustainability goals. The MSRI demonstrated tangible results and encouraged progress toward these ambitious goals, so Dow followed its 2005 Environment Health & Safety (EH&S) Goals with another 10-year set. These 2015 Sustainability Goals continued to focus on EH&S targets and added an emphasis on breakthrough innovations to solve world challenges. Dow is now in its third set of 10-year goals, the 2025 Sustainability Goals, which build on the last two decades and expand Dow’s role to help design blueprints for sustainability in areas as diverse as watershed management, energy and climate, resource efficiency, infrastructure and sustainable cities, quality education, and productive employment with economic growth.

Culture: This culture shift at Dow has paid huge dividends. One recent example is Dow’s collaboration with The Nature Conservancy on valuing ecosystem services in business decisions. Since 2011, this groundbreaking collaboration led to Dow’s 2025 Valuing Nature Goal, where Dow seeks to deliver $1 billion in value by 2025 through projects that are good for business and better for ecosystems.

Reputation for Collaboration: The NGOs benefitted by learning how to work with industry to make actual changes and measurable impacts toward reaching their environmental objectives. The relationships that they built in MSRI were valuable in future work related to legislation, regulation, and other cooperative efforts.

The MSRI turned out to be a classic case of win-win-win from cross-sector collaboration that today we take for granted.



Co-Authors

Linda Greer, Senior Scientist, Health Program, Natural Resources Defense Council (NRDC)

Since joining National Resources Defense Council (NRDC) in 1991, Linda Greer has been finding ways to reduce the presence of toxic chemicals in our air, water, food, buildings, and consumer products. Over the past decade, she spearheaded the organization’s environmental health efforts in China, including an inventory of the country’s mercury use and subsequently led efforts to negotiate an international treaty to reduce the use and release of mercury into the global environment.  Turning to the fashion industry in 2009, Greer launched “Clean by Design,” a green supply chain initiative calling on multinational apparel retailers and brands to take responsibility for the environmental impact of their factories abroad. Greer has served on the National Academies of Sciences, Engineering, and Medicine’s Board on Environmental Studies and Toxicology as well as many other science advisory panels and committees. She has a bachelor’s degree in biology from Tufts University, a master’s in environmental science and engineering from the University of North Carolina at Chapel Hill, and a PhD in environmental toxicology from the University of Maryland. She is based in Washington, D.C.

John Ehrmann, Founder and Senior and Managing Partner, Meridian Institute

John Ehrmann has pioneered the use of collaborative decision-making processes for 30 years at the local, national, and international levels. He has designed and implemented projects in wide range of public policy arenas involving legislation, regulatory development, and Federal Advisory Committees and international agreements. He also regularly works in organizational management and strategic planning settings; in communities and on site-specific disputes; and with stakeholder groups advising NGOs and companies. He is frequently asked to advise organizations regarding the design and use of collaborative approaches to address challenging issues. Dr. Ehrmann’s work has focused on environmental and natural resources issues, energy and climate change, public health, science and technology, and the economic and social challenges associated with developing sustainable practices for communities and industries.

In addition to his extensive involvement in designing, convening, and facilitating collaborative processes, Dr. Ehrmann has promoted the use of collaborative decision making through lectures and the publication of numerous articles on consensus-based decision making in the public policy field. He has served as an Adjunct Faculty member at the University of Wyoming and is a member of the External Advisory Board to the Erb Institute at the University of Michigan, a joint program between the Ross School of Business and the School of Environment and Natural Resources.

Dr. Ehrmann received his undergraduate degree from Macalester College and his Ph.D. in Natural Resource Policy and Environmental Dispute Resolution from the University of Michigan’s School of Natural Resources. His doctoral dissertation involved developing a practice-based model of the policy dialogue that can be applied to both practice and research. Between 1983 and 1997, Dr. Ehrmann was executive vice president at The Keystone Center. In September 1997, he became one of the founders of Meridian Institute.

Dave Buzzelli, former Vice President and Corporate Director of Environment, Health and Safety, The Dow Chemical Company

Dave Buzzelli joined The Dow Chemical Company in 1965 and has held various process engineering positions and served as Technical Director of the Michigan Division Process Development Group since 1976. Since 1984, he served as Director of Government and Public Affairs for The Dow Chemical Company and a Vice President of Dow Chemical U.S.A. Mr. Buzzelli served as Chairman, President, and Chief Executive Officer of Dow Chemical Canada Inc. since 1986. From 1990 to 1997, he was Vice President and Corporate Director of Environment, Health and Safety. In addition, from 1993 to 1997, he was Corporate Director of Public Affairs and, from 1994 to 1997, he had management responsibility for Information Systems for The Dow Chemical Company. He has served as a Director of Dow Corning Corporation. Mr. Buzzelli graduated from the University of Minnesota in 1964 with a Bachelor’s degree in Chemical Engineering. He received his master’s degree in Chemical Engineering from the University of Delaware in 1965.



Dedication

This article is dedicated to the men and women who made this remarkable collaboration the breakthrough it clearly was. It took courage on everyone’s part. In particular, this blog is dedicated to the late Jerry Martin and Bill Bilkovich, and to the great visionary work of Rick Olson, Terry Miller, Tracey Easthope, Anne Hunt, Mary Sinclair, Diane Hebert, and Jeff Feerer.

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