With its People.Planet.Paint. approach, AkzoNobel aims to empower people, reduce its impact on the planet, and produce sustainable products. That’s how the company delivers tangible benefits to its customers, society, and the environment. In this article, part of our Purpose Series, we’ll discuss with Daniela Vlad, business director of AkzoNobel Powder Coatings, what ‘purpose’ means to AkzoNobel and how it translates to the powder coatings business unit.

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How can AkzoNobel color the world with a low carbon footprint and a diverse workforce?

“In 2020, we launched our new purpose: ‘pioneering a world of possibilities to bring surfaces to life’. It was not defined by a group of senior executives but the result of a broad collective movement. A group of enthusiastic employees interviewed many colleagues within the company along with customers and other key stakeholders,” Daniela kicks off.

“This is how our purpose was cocreated from within and it reflects what our employees think and believe. The publication created a lot of resonance. Not only inside, but also outside the company, because of the motivating and engaging message. We felt that we captured a spirit of pioneering and innovation again.”

According to Daniela, a key element of the approach is that it builds on continuity and sustainability. “We reconsidered past, present and future and reflected on what sustainability means for us as a company and for society in a broader sense. We worked on defining ambitious and tangible targets in which we can make visible what we claim.”

This resulted in the following ambitions: in 2030, AkzoNobel wants its CO2 emissions to be reduced by 50 percent, only use renewable energy, have zero non-reusable waste, and reuse its water at its most water-intensive sites. And by 2050, at least 50 percent of the sales should come from products that are sustainable in all parts of the value chain.

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“We reconsidered past, present and future and reflected on what sustainability means for society”

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Building on previous sustainability experience

“Fortunately, we start from a relatively good position”, Daniela says. “We’re already quite far on our sustainability journey and are recognized as an industry leader by external agencies. For instance, Ecovadis, a leading company in sustainability ratings, placed AkzoNobel in the top one percent of companies with a Platinum rating. We are also one of six Dutch companies featured in the Corporate Knights Clean200. So, we have a strong base and do not have to start from scratch.”

Daniela sees that AkzoNobel’s purpose fits very well in the business she is responsible for. “Powder coating is one of AkzoNobel’s business units. Its products and solutions are considered clean and green, because we do not use solvents, our coatings come in solid form and they generate little waste. The timing of the new purpose is great because the sustainability trend favors our business—many of our customers have already discovered the advantages of powder coatings.”

To make AkzoNobel’s carbon footprint reduction a bigger success, Daniela expects the powder coatings business unit to accelerate its growth ambitions. Both in current markets and for new applications.

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The carve-out of Chemicals caused a paradigm shift

After its specialty chemicals branch continued as Nouryon in 2018, AkzoNobel changed quite drastically. How is the company rediscovering itself and how will this journey color its purpose?

Daniela: “A huge transformation took place since 2018 with a very strong performance drive. We worked on our ‘15 by 20-ambition’, targeting a 15 percent return on sales in 2020. I’m very proud we succeeded in this ambition. It was a tremendous achievement, which brought us really in line with our peers in the industry. In fact, it was the end of a chapter and the beginning of a new paradigm.”

She outlines that the 15 by 20 ambition involved maintaining, continuing, and improving AkzoNobel's existing business as well as reducing its carbon footprint and growing its renewable energy use. AkzoNobel CEO Thierry Vanlancker has now announced the second stage of the journey: the Grow & Deliver strategy, aimed at growing revenues and maintaining a healthy return.

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“We had extensive discussions about the interpretation of words like ‘growth’ and ‘sustainability."

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For Daniela, AkzoNobel calling out its purpose caused an “aha moment”. “It gave a tremendous momentum for our leadership as we had extensive discussions about the interpretation of words like ‘growth’ and ‘sustainability’ and now they could see it in relation to a bigger picture. I experienced the energy it brought to my teams as they are eager to take steps and saw the perspective for them personally.”

Monitoring the sustainability path

To monitor the new sustainability strategy, a framework is being deployed that continuously checks whether the business units’ products contribute to sustainability and whether the diversity within their workforce is a true reflection of the outside world.

As a member of Akzo Nobel’s corporate sustainability council, Daniela states: “We have cross-functional teams looking at how our sustainability ambitions can be best delivered from multiple angles—People, Plant, Paint being the core themes.  Together, we look for the ingredients that are contributing to sustainability. We then try to translate them pragmatically into tangible and concrete actions with achievable targets.”

To remain an employer of choice, young talent is invited to challenge all assumptions in the sustainability approach. Daniela: “We ask for direct feedback from the young, upcoming generation. We see it as a kind of ‘reverse coaching’. We have also recently appointed a NextGen Sustainability Council to guide our sustainability future.”

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Developing ecosystems is key in driving sustainability progress

The history of AkzoNobel goes back to the end of the 18th century. At that time, it was not known that some of the compounds used in the production process were unhealthy, causing health problems over time. Such blind spots could still surface when it comes to sustainability. How can AkzoNobel convince its stakeholders it’s making the right choices now?

Daniela: “Making sustainability measurable is our priority. We are working on key performance indicators that show the relation between our products or sustainable solutions, our carbon footprint, and the advantages for our customers. We want to demonstrate that we do as we say and drive the conversation in society, with governments and lawmakers.”

“The markets are increasingly asking for sustainable products. From my point of view, the world is ready to wake up, which requires speed of innovation.”

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“In the years to come, we need open innovation to solve the present problems.”

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Involving AkzoNobel’s ecosystem to boost open innovation

In the eyes of Daniela, the development of ecosystems—consisting of clients, vendors and knowledge institutions—is indispensable. To create new ecosystems, AkzoNobel started “Paint the Future” in which start-ups, suppliers, and academia are invited to accelerate new innovations in paints and coatings.

“In the years to come, we need open innovation to solve the present problems. One of the outcomes of ‘Paint the Future’ is that there are a lot of initiatives out there using biobased materials and circularity principles. A clear example is our collaboration with Groningen University on biobased coatings.”

“For powder coatings, which as such are a green technology, sustainability means pushing the boundaries even further. By developing coatings that can be applied at lower temperatures, AkzoNobel plans to apply powder coatings on new surfaces, such as wood and plastics. That means offering customers more options for sustainable propositions.”

Daniela agrees that external regulatory changes, such as the European Green Deal, are helpful. “It makes us aware that the formation of sustainable ecosystems is a long-term trend. The challenge is to remain ahead of legislation, create green products and at the same time achieve superior financial results,” Daniela thinks. “But I am convinced that by aligning innovation and sustainability, we can create value for our customers and improve profitability. I am looking forward to exploring how it’s going to work.”

Looking at the future

AkzoNobel's central dilemma will always center around creating a better and healthier society versus a higher return on sales will remain, according to Daniela. “But a strategy always has short-term and long-term components. It is good to work backward from the goals you want to achieve.”

“It’s no straightforward process. Sometimes it’s necessary to take hard decisions and stop activities that do not lead to the desired results. In portfolio management, growth and disinvestments go together. Of course, this regularly leads to tension, but it’s easier to guide yourself if you keep the targets for the upcoming five to 10 years in mind.”

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"We have to make the world a better place for next generations."

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Daniela realizes that for the desired change, a higher return on sales, and a better planet, AkzoNobel needs other stakeholders—from policymakers to investors—to make things happen. But that does not refrain her from continuing her plans. As a chemical engineer from Romania, she has always strived to expand her boundaries and make an impact on society. Daniela prefers to see her legacy as personal growth in a broader context; for example, by working with teams and helping them to deliver the desired results.

Daniela: “Some years ago, I went on a family trip to Vietnam. My daughter used a metal straw for her soft drink instead of a plastic one and said: ‘Save the turtles.’ Then I felt my responsibility: we have to make the world a better place for next generations.”

Femke de Jager

Managing Director – Industry X.O, Europe Asset Performance Management lead

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