WEBVTT 00:00:03.150 --> 00:00:05.370 - For more than a century, Dow has used science 00:00:05.370 --> 00:00:08.220 to create products that matter at global scale. 00:00:08.220 --> 00:00:11.130 Today, that same capability is being applied to one 00:00:11.130 --> 00:00:14.730 of the defining challenges of industrial transformation: 00:00:14.730 --> 00:00:16.860 value chain decarbonization. 00:00:16.860 --> 00:00:18.840 The Carbon Footprint Ledger is the system 00:00:18.840 --> 00:00:20.970 that connects these technological breakthroughs 00:00:20.970 --> 00:00:24.030 with customers, markets, and future growth. 00:00:24.030 --> 00:00:26.670 - Translating decarbonization investment 00:00:26.670 --> 00:00:29.550 to client rate offers brings a challenge. 00:00:29.550 --> 00:00:32.580 Society needs investments to happen in a way 00:00:32.580 --> 00:00:36.810 that maximizes CO2 reduction for investor dollar. 00:00:36.810 --> 00:00:39.660 For us, that means investing in our crackers. 00:00:39.660 --> 00:00:42.030 This creates a misalignment between 00:00:42.030 --> 00:00:45.210 where investments happen on a physical way from 00:00:45.210 --> 00:00:47.100 where our customers are located. 00:00:47.100 --> 00:00:49.470 So what we do with the Carbon Footprint Ledger is 00:00:49.470 --> 00:00:52.410 to make a connection of the investment to 00:00:52.410 --> 00:00:54.900 where the needs are with our customers. 00:00:54.900 --> 00:00:57.570 - When we were originally thinking about whether we should have a carbon 00:00:57.570 --> 00:01:00.150 footprint ledger, we have to obviously start off 00:01:00.150 --> 00:01:01.800 with "What's the market?" 00:01:01.800 --> 00:01:04.230 And what came out of that is clearly, you know, 00:01:04.230 --> 00:01:07.440 they're looking for credible solutions 00:01:07.440 --> 00:01:09.150 to reduce their carbon footprint, 00:01:09.150 --> 00:01:10.620 - To develop the solution. 00:01:10.620 --> 00:01:14.220 First, we recognized that we needed a partner, a partner 00:01:14.220 --> 00:01:16.860 that had deep technical expertise, 00:01:16.860 --> 00:01:19.080 but also a business mindset. 00:01:19.080 --> 00:01:23.010 It was an easy decision to choose BCG. An approach 00:01:23.010 --> 00:01:25.470 that takes into consideration the complexity of Dow 00:01:25.470 --> 00:01:26.760 and the chemical sector. 00:01:26.760 --> 00:01:28.830 The first decision we made was not 00:01:28.830 --> 00:01:31.020 to develop a new standard. 00:01:31.020 --> 00:01:33.900 We grounded the methodology on the existing standard, 00:01:33.900 --> 00:01:36.360 particularly ISO 14067. 00:01:36.360 --> 00:01:39.270 We did it in a way to make it transparent to the world. 00:01:39.270 --> 00:01:42.810 We invited others to come and audit what we do, 00:01:42.810 --> 00:01:45.150 and we developed the digital technologies 00:01:45.150 --> 00:01:47.700 that assure the integrity of the ledger. 00:01:47.700 --> 00:01:49.350 - First of all, we wanted to make sure 00:01:49.350 --> 00:01:50.700 that whatever was created 00:01:50.700 --> 00:01:52.470 and architected was something 00:01:52.470 --> 00:01:54.120 that wasn't a standalone solution. 00:01:54.120 --> 00:01:57.120 And so Dow brought the expertise in some of our tools 00:01:57.120 --> 00:01:59.580 and our technology as well as the work processes 00:01:59.580 --> 00:02:02.910 and the technology tools that we have enabled at Dow today. 00:02:02.910 --> 00:02:05.040 As a result of having an integrated solution, 00:02:05.040 --> 00:02:09.060 CFL supports near real time calculations across thousands 00:02:09.060 --> 00:02:11.400 of products and multiple sites across Dow. 00:02:11.400 --> 00:02:13.500 Customers don't just want to see data. 00:02:13.500 --> 00:02:16.590 Customers want data that Dow can stand behind. 00:02:16.590 --> 00:02:19.350 So when we think about the Carbon Footprint Ledger 00:02:19.350 --> 00:02:22.470 and our certificates of carbon 00:02:22.470 --> 00:02:25.410 and a reduced carbon offering, Dow needs to be able to stand 00:02:25.410 --> 00:02:28.290 behind those offerings and CFL is fully auditable. 00:02:28.290 --> 00:02:30.660 - So that confidence question 00:02:30.660 --> 00:02:33.210 and our ability to be able to establish that confidence 00:02:33.210 --> 00:02:35.040 with them and to display 00:02:35.040 --> 00:02:38.160 through the Carbon Footprint Ledger tool, exactly 00:02:38.160 --> 00:02:41.250 how the product carbon footprint has been calculated so 00:02:41.250 --> 00:02:43.590 that it's a high integrity number we're sharing, 00:02:43.590 --> 00:02:44.970 has high credibility, 00:02:44.970 --> 00:02:47.340 that is absolutely critical for our customer. 00:02:47.340 --> 00:02:50.820 - The three elements of the Carbon Footprint Ledger: a sound 00:02:50.820 --> 00:02:54.090 and solid and compliant carbon accounting methodology, 00:02:54.090 --> 00:02:56.160 a digital platform that brings together 00:02:56.160 --> 00:02:59.260 and maps the complexity of the chemical production process 00:02:59.260 --> 00:03:02.050 and carbon accounting attached to the various products, 00:03:02.050 --> 00:03:04.750 and a set of tangible, easy-to-use functionalities 00:03:04.750 --> 00:03:05.770 for commercial teams 00:03:05.770 --> 00:03:08.920 and customers, make this Carbon Footprint Ledger a strong 00:03:08.920 --> 00:03:12.820 enabler of bringing low-carbon products to market 00:03:12.820 --> 00:03:16.270 and thereby creating a lasting competitive advantage. 00:03:16.270 --> 00:03:18.220 - The market response has been incredibly 00:03:18.220 --> 00:03:19.690 validating, actually. 00:03:19.690 --> 00:03:22.810 Clearly it's new, so you're learning every day when you talk 00:03:22.810 --> 00:03:25.120 to customers, your assumptions are never perfect. 00:03:25.120 --> 00:03:27.310 Those hypotheses get tested and they get improved. 00:03:27.310 --> 00:03:30.100 But the reality is that the basic assumption 00:03:30.100 --> 00:03:33.220 that there is an incredible interest from customers 00:03:33.220 --> 00:03:36.490 around the world in buying lower carbon footprint 00:03:36.490 --> 00:03:37.870 products that is real. 00:03:37.870 --> 00:03:39.790 So we have contracts in place already. 00:03:39.790 --> 00:03:42.070 We have contracts in negotiation right now, 00:03:42.070 --> 00:03:45.190 and we have many more in those early stages of conversation 00:03:45.190 --> 00:03:47.290 that will lead to contracts in the future. 00:03:47.290 --> 00:03:50.410 - The system is inherently scalable and flexible. 00:03:50.410 --> 00:03:53.020 Also, the methodology is not proprietary. 00:03:53.020 --> 00:03:55.150 It can be used across the value chain, 00:03:55.150 --> 00:03:56.830 across industries. Even 00:03:56.830 --> 00:03:59.080 - The Carbon Footprint Ledger is truly a 00:03:59.080 --> 00:04:00.910 catalyst of decarbonization. 00:04:00.910 --> 00:04:02.650 It enables the investment 00:04:02.650 --> 00:04:04.810 to flow into the chemical industry. 00:04:04.810 --> 00:04:06.130 It enables the value chain 00:04:06.130 --> 00:04:08.200 to participate in the decarbonization, 00:04:08.200 --> 00:04:10.690 and it brings the necessary competitiveness 00:04:10.690 --> 00:04:13.180 for decarbonization of the chemical sector 00:04:13.180 --> 00:04:17.140 - Through what we've built with BCG, we have a digital twin 00:04:17.140 --> 00:04:19.840 of our greenhouse gas footprint at Dow, 00:04:19.840 --> 00:04:22.270 which we can optimize CFL credit. 00:04:22.270 --> 00:04:26.200 - I would describe BCG's contribution as being first 00:04:26.200 --> 00:04:30.460 and foremost, having an incredibly skillful, 00:04:30.460 --> 00:04:31.540 experienced, 00:04:31.540 --> 00:04:35.980 a knowledgeable partner upon which we could test ideas 00:04:35.980 --> 00:04:37.450 and who could test ideas with us. 00:04:37.450 --> 00:04:40.330 Because as I said, this is a relatively new field 00:04:40.330 --> 00:04:42.430 and so a lot of what we're doing is new. 00:04:42.430 --> 00:04:43.990 It hasn't got a precedent. 00:04:43.990 --> 00:04:46.150 And so having somebody with that level of skill 00:04:46.150 --> 00:04:47.650 and knowledge has been great in terms 00:04:47.650 --> 00:04:49.360 of developing our approach.