Eco-premium profits

So what does AkzoNobel mean exactly by “eco premium”? Easy, says Veneman: “Solutions with a downstream benefit that help our customers reduce energy and raw material useage”. Defining the term is not the issue; designing the products is where the difficulty lies. For that reason, AkzoNobel is earmarking two thirds of its innovations research budget of €370m (by last year's count) – to its eco-premium goal.

The Netherlands-based multinational is not starting from scratch. Its product portfolio already contains a number of cutting-edge sustainability innovations. International Paint, for instance, its marine coatings business, pioneered an anti-foulings solution known as ‘flouropolymer foul release technology’. The advanced coating increases performance of large ocean vessels by reducing the growth of algae and seaweed on their hulls. That means lower fuel use (up to 9%) and fewer resultant carbon emissions. Should every tanker and bulk cargo vessel within the global fleet use the coating, an annual reduction of nearly 49m metric tonnes of emissions could be achieved, an independent study calculates. (https://redlinepowdercoating.com/)

Another eco-premium example is the company's reflective coatings for buildings

Another eco-premium example is the company's reflective coatings for buildings. These reflect heat from sunlight, cooling temperatures inside by as much as 5 degrees Celsius. Energy consumption for air conditioners falls by up to 15% as a result. AkzoNobel's product line-up also features biodegradable detergents, fine-particle powder coatings for the automotive industry, and warm-mix asphalt that enables paving at lower temperatures.

Veneman emphasises the importance of opening up “new conversations” with its suppliers. In the past, he admits, discussions used to centre primarily around cost saving. “When you ask [your supplier] how can we together develop a new business model and how can we develop together our research… you shift the conversation and you begin to cooperate instead of just focusing on the cost of the raw materials,” he says.

To facilitate this collaborative process, AkzoNobel has signed key supplier agreements with its most important suppliers. The move marks a step up from its previous policy of supportive supplier visits , which it kicked off six years ago and which have so far encompassed 350 suppliers.

Veneman sees AkzoNobel's primary role as a catalyst in the production chain: “If we want to support leading companies like Hayworth, Herman Miller and Steelcase with powder coatings that enable them to do the curing at much lower temperatures, then we need to engage with companies like BASF or DSM to develop the resins with improved functionalities.” The same with solvent supplier Eastman regarding biobased materials or with industrial packaging manufacturer Greif concerning recycling rates, and so on.

As with its own sustainability targets, collaborative solutions “won't happen by coincidence”, Veneman admits. “It needs day-to-day approaches and day-to-day motivation and engagement to make these changes happen.” Internally, research, marketing and procurement divisions need to work more closely together. Externally, sustainability needs to become front and centre in supplier and customer relationships.

Veneman is no one-man band. For AkzoNobel's eco-premium strategy to meet with success, senior level buy-in is needed across the value chain: “You need to make sure it's not just the enthusiasm of a few marketing people or a few procurement people. You need to get top management commitment from your own business – and from the business of your supplier and customer too.”

Andre Veneman, corporate director of sustainability at AkzoNobel will be a panellist at Sustainability 24. You can register to watch global thought leaders debate sustainability issues in the live 12 hour broadcast.