Business as Usual: Covestro

Transcription: 

So Good afternoon, and welcome to business as usual. Like every day, we have some great guests, and today is no exception. I'm Audrey Russo, President and CEO of the Pittsburgh tech Council and joined by Jonathan kersting. He's vice president of all things media and marketing. So want to give a shout out to Huntington bank, who have been our partners right from the onset of COVID, as well as before that, but particularly during COVID, when there was really a huge need at the onset of all of this to help small businesses and they've been right there. In addition, they've been just great partners and helping us just explore and experiment. And lo and behold, we're still doing business. As usual, I think this is like one of our 100 and 37th. session. So today, we are what we are here with a guest from covestro. And I'm going to introduce him in a moment. But we've muted your microphones just to be considerate, and we allow to chat. And I think there's going to be a lot of interest in terms of what we're talking about today, which is the circular economy. So on that note, we're gonna jump right in and introduce our guest wizard screw Pinsky. He leads the poly your theme advocacy and sustainability for Invesco. He's a chemist by training. And he has a master's in science from Johns Hopkins, environmental science. And I think some other things that will probably tell us about it's pretty well, he's pretty well has a strong academic pedigree. But he's going to talk to us today about the circular economy and what that means in general and what that means at covestro. So good afternoon, Richard, thank you so much for taking the time with us today. Really appreciate it. And what I want to do is, before we get started is just sort of talk about who is Richard, what's your career? How did you get to where you are right now? And and how are you doing through this pandemic right now?

Well, thanks, Audrey. And I really appreciate the opportunity to spend a few minutes with this group today. Can you hear me? Okay?

Yeah, we

good? Yeah. And you, you reference my educational background, I'm a chemist and environmental scientist, I've been, as you can tell from the picture, probably, I've been in industry for 30 plus years, working in a variety of roles, a lot of that's been mostly in research and development, and working in laboratories developing new products and introducing them to our customers. But when I reflect back on that time, a lot of it was driven by sustainability, you know, and either business opportunities or regulation. So I, you know, I spent a lot of time working on projects that reduce waste, and save energy, improved indoor air quality, environmental footprints, and that sort of thing. So it was a it was a natural transition, into change into this job, focused on sustainability, about 11 years ago, and I moved around the country a bit. But I had lived here in Pittsburgh for the last last 11 years working on this subject of Astro, and really enjoy the community. So it's great. It's a great city.

So you think that you say that you've been working on this for a long time? was it called the circular economy?

No, no, that's certainly a newer term. Ellen MacArthur Foundation in the UK several years back is a bit to me, in my opinion, is a build on sustainability. I look at sustainability as kind of a bigger umbrella. And circular economy is one of the approaches to help

develop more sustainable business.

Okay, so, um, your and your current role, like, what are the things that you're absolutely in charge of in terms of what you're doing right now?

Yeah, so for my sustainability role, I sit within the polyurethane business unit within covestro. But I think we'll talk about in a little bit. The company has launched a global circular economy activity or program since around May of this year, and at least publicly, and I lead that effort for North America for cholesterol.

Wow. So some people might not be fully aware of covestro we see the signage, we see your presence in our community. You have deep roots in the community and there have been changes organizationally in terms of the relationship with bear. So can you just talk about that, like just talk about vestra the company and all the different pieces at least at a high level so we can understand all that covestro does.

Sure. And Audrey, as you said, If you drive along the parkway here and Robinson, hopefully you see our big colorful, Rainbow sign out out facing the highway covestro most people here in Pittsburgh know as formally as bare material science. It's a global company that's actually headquartered globally in Germany, outside of Dusseldorf. And it's about $15 billion in revenue globally. We have, you know, around 2500 employees here in the US, but Pittsburgh is the North American headquarters for covestro. Right where this where the sign is here, and here at this site, we have around 700. us located. And we I think at a high level, we have three business units, I meant you mentioned the one that I sit in formally, which is polyurethane, and we have cast, which stands is CS, coatings, adhesives, and specialties. And then we have polycarbonate. And I think we'll touch on how some of those products, you know, fit into the market as we go through the conversation this morning. And eventually, I was just gonna say you mentioned, Bear, if people don't know, the connection, we spun off from bear as an IPO about five years ago, this last September. And we weren't bear material science covestro. And as most people know, bear is leaving the area after their Monsanto merger. Yeah, and we're we're acquiring we have acquired a site, and a portion of which will be sold to another local holding company. Now we're here at our CEOs have been on record that we're here for good for Pittsburgh. So

that's good. That's great. And you said there's about 750 people that are out there. And Robinson,

yeah, about 700

on site. And most of the most of those people have science related roles.

Yeah, I mean, our company is obviously very heavy in chemistry and chemical engineering. But this is the administrative headquarters. So we have it people here we have accounting, we have legal communications, the whole suite of corporate functions.

Right. So, you know, as we mentioned, during the introductions, you have, you know, investors embraced sustainability in the circular economy. So, describe the concept of the circular economy. You mentioned earlier, that it's part of the broad piece in terms of sustainability, but talk about the circular economy and what that really means inside of the best route and your work, because it seems like you have an influence across the business unit.

Yeah, it is always good to start there, because I'm never quite sure you know, where the audience is, in terms of their understanding of that term. Some, you know, you say it is it click, the light bulb goes off immediately, and others, I have no idea. So if we just look at the basics, and think about comparing a linear economy with a circular economy, so the linear economy is really based on the take or extract, you know, make, use, and then dispose of anything about that linear path. I mean, it's been very, very successful model for many years. It's, it's, you know, it's what made the Industrial Revolution. It made, you know, had tremendous business and economic growth, but it also has some potential consequences in in terms of resource utilization, and waste and that sort of thing. The circular economy has multiple pillars to it as we look at it, but to be as simple as possible, the idea is to design products, so that they can still go through the value chain, go through their useful life, but then at the end of that process, they're there, you're able to reincorporate them back into the value chain rather than just dispose. And, you know, obviously, some of the value in that is reducing environmental impacts. But also, climate change is important in the process. But we also are looking at and I think we'll get into it, there's a real business opportunity here. You know, there's a lot of material that is going to the wayside, that could be used in a modern economy, if designed properly.

So can you give us examples if you could?

Well, you know, this this simple, simplistic one is just recycling. But if you think about the entire process. In the end, you would like to separate yourself from the dependency on fossil fuel feedstocks ending in this end industry in the polymer industry. That's what that's what our building blocks are to make the plastics that we bring to market today for a variety of applications. So the idea is to eventually separate yourself from that, but you still obviously need carbon. And you extract that from later in the lifecycle of the products. And in the end, you would be achieving two things, eliminating some or all of the wastage that goes into the environment at the end of the life, but also separating our dependency on fossil fuels as a feedstock. That makes sense.

Yeah, I mean, it does, I think we've jumped ahead, and maybe I can talk, maybe we can just sort of isolate this, because when we look at plastics, there are major challenges to overcome. And, you know, probably most notably, as, as we've mentioned, is the plastic waste in showing up across the globe, and in lots of different places, or waterways, or oceans, or landfills, etc. And that's how they end up but they are fossils, you know, most of them begin with the fossil base materials such as oil. So Castro sees it as an imperative. And I think that's really what you're saying in terms of your role to identify raw materials for plastics. So what, you know, how does this help with the fossil, you know, origins of plastic, and also the plastic pollution that occurs in recycling. So there's lots of different pieces here, right, and you can separate that out, because sometimes people just talk about it as one thing. And then and it's not

now, and there clearly are some several interdependencies here, in terms of hide how those cycles work together. So I think, you know, just just the environmental awareness and social responsibility of what happens to products at the end of life, I'll mention that, you know, covestro, our products predominantly, almost entirely go into what are durable, uses durable goods, automotive homes, building construction, some medical applications, etc. So, it's a little different than the single use plastics topic. But we still feel that we have, you know, our products that eventually come to the end of their life, and a solution is needed there. So we feel like we do have a social imperative to address what happens to plastic products at the end of life. So that's, that's one aspect of it. It's just, you know, recognizing corporate responsibility. But the other is, frankly, a business. One is a business case, where there are all these materials that you know, end up either in landfills or are incineration, some recycled that present the opportunity for value. And could really, you know, in the times when, you know, right now, we're in a period where energy and petroleum is relatively cheap, but we've been in places where it's not been so cheap. And those materials at the end of life, if we can figure out how to redeploy them, could could actually represent a very significant value stream. For a company like covestro, and others who depend on petroleum feedstocks. The last point I wanted to make on that subject is minimizing or eliminating the extraction of fossil fuels from the environment, because that's just bringing more carbon into play, which could eventually end up in the atmosphere and contributing to climate change. So I think, you know, just your social responsibility, business opportunity, and climate change are three of the real big drivers for that.

And so yeah, I mean, I applaud vestra for taking this on. I mean, it is this isn't simple, and you're just one company. And you certainly don't, you know, rule the world in all of this. There's many pieces and parts, but what about innovation? How are you working? Suppose there are people who have ideas, or they have different ways of trying to be helpful in the areas that you just mentioned is waste. What How do you partner How do you? Is there anything around research and development and innovation that you could share with us and interested in?

Yeah, and there are many. I'm the, of course, I'm in the process now of educating and informing our workforce, including our innovation workforce, about, about what the key attributes and elements of a circular economy and these are a lot of smart people that are, you know, already thinking about the next thing they can invent that can have pepper ever roll here. But we also have some public collaborations. I think that's one critical aspect of this at both the UN sustainable development goals as well as our own circular economy. recognize is that and as you pointed out, covestro is just one company with us with a certain sales. Yeah. And we really need to collaborate with others in order to be successful here. And we're very open on that. And maybe two quick examples. One was launched. And I'm not sure if this group has heard about the Alliance to End plastic waste was a an industry wide activity that was launched in January of 2019. And it's a it's a five year program global program, with one and a half billion dollars of investment, that cadastro is a founding member of and in that we have several incubators and think tanks and ways to bring people together to come up with solutions. Another one that's a little closer to home, is that here in the in Pittsburgh covestro signed an agreement with what's called a mattress recycling Council. Some people don't notice three states in the US have mandatory mattress recycling. So that when you when you go to purchase your mattress at the store, you pay a small fee that goes into a bank, if you will, that then is administered to support research, and infrastructure, etc. to recycle mattresses. So we knowing that polyurethanes are a big part of mattresses. We signed an agreement with this group, and had been meeting regularly to bring forward some some r&d projects to help solve that specific issue of what happens to a mattress in the end of life. Those are a couple of examples.

And then Jonathan, there's some questions out there. Yeah,

that's a good one. These are exciting questions. Richard, thanks for joining us today. So first from Dirk, do you envision someday mining the landfills for plastic feedstock? Imagine that. That's pretty cool.

That is, you know, a very interesting idea. And I think as we figure out ways to make these end of life products more valuable, you could even go as far as you know, are Can you retrieve some from certain from from landfills? I mean, that's even making things better. Right, not just stopping them from getting worse. So I think it's Yeah, I mean, it's a great idea. We have, we have a lot of research. And that's an advantage of being a global company. I know I'm going on a little bit here. But we have a lot of research going on in Germany. And a lot of it's focused on advanced recycling techniques. So we're looking at different processes where we can take various waste streams, and then turn them into valuable raw materials. Yeah, I mean, that's, that's a cool idea. It'd be great to go eliminate landfills

that might go right along with what Sam brown wants to ask here. He says one of the challenges of recycling polymers are the performance degradations that occur so often against virgin materials have a higher performance rate than recycled materials, and also just wants to know what happens to the nano size fillers using some of these polymers. They stay intact and go somewhere, right.

Yeah, so so you need in, there are different challenges with the different types of plastics that we have. So the covestro, for the most part makes thermoset plastics, which you really need either a chemical, chemical or thermal way to break those into their original building blocks. And that's the idea. That's the idea situation is where you have these plastics at the end of life. And then we can basically chop them back up into pieces that can be recombined in whatever form, you know, that the useful product becomes. And it's a good point, you know, there have been, I've we've been following recycled and biobased, etc, materials for 20 years here. And initially on the market, many of them had deficiencies, but the technology has really advanced and there's significant investment in innovation underway right now. So I'm hopeful that we're gonna get to the point that we can reincorporate materials without property loss.

Keep going. Jonathan, Mark Emery has a question.

Great questions coming in here. I love seeing this from the crowd. So besides circulating raw materials, do you also use other scarce resources, such as water that combustor is working to have a net zero consumption?

We we do have, obviously, we use water. And we obviously very carefully monitor that we look at greenhouse gas emissions, other aspects of our processes. We've had internal goals for improving those environmental impacts. But also, we work together with trade large trade associations, like the American chemistry Council, who uses programs such as responsible care, in which we publicly release information with regard to our operations on points exactly like that. So they're, they're all important. I mean, there's been a big emphasis on greenhouse gas emissions, climate change clean air, but obviously water and environment are important elements as well.

What about biomimicry? I've never heard of this, are you guys using that to develop new products?

We, I'm not aware of internal projects, but we're very familiar. We work a lot with academia, and, and NGOs, on projects that are a little bit further out there. So biomimicry is basically imitating nature. So nature figures out how to how to do a lot of things very well, in a very benign way. And, and because you're not going to do something toxic to a living creature, right, the innate nature that would not have nature would not have brought that forward. So things like coloration that you'll see. And, you know, butterflies, or our peacocks are using an example have to do with, you know, the shapes of the structures that their bodies are made of, and looking at things like that. And so biomimicry, yes is a way to, to simulate performances with in benign ways by copying nature.

It's an interesting area. Good question.

Okay, Jonathan, there's still a couple of more.

Yeah, they're rolling in. So I noticed, are there certain types of plastic that just cannot be recycled? Do they forever stay in their state.

So if everyone has their plastic containers at home, you can look at the little chasing arrow symbol on the bottom or the side. And they're categorized from one to seven and other. And there are certainly processes in place that are that make some of those easier than others. And some are more complex, I started touch on it earlier getting a little into polymer science, but some materials we call our thermoplastics, they really can just be melted, and re extruded or ground up and re compounded. Because there's no chemical crosslinks between them. But thermo sets do have those chemical crosslinks that require more sophisticated ways to break those down. So there certainly are different challenges with different plastics. But what one thing I would want to add as well, is that another pillar of challenge that we have suicidally, as well, is the collection, and sorting of materials. So these materials that come You know, they're all in all of our homes, our cars, etc. And then we have to figure out how to get them back to collection points, and then separate them and use streams.

So let me let me jump real quickly. And let's just talk about like the electrification of the global automotive fleet, and that most of our region's role in the industry comes from advanced materials. That's where, you know, we tend to play in terms of our assets. Can you talk about the work that investors doing in this space to help accelerate the transition to electric in terms of transportation?

Yeah, we've been following the the electric vehicle trend very closely, as well as autonomous vehicles. And what does that mean? And you know, you hit the nail on the head, our play is mainly as a material manufacturer, we try to determine how we can help facilitate those transitions. And one of the biggest areas has to do with our polycarbonate business that I mentioned, a lot of people know polycarbonates from. Back in the day, when we used to have DVDs and CDs, that plastic material, polycarbonate was the most popular one. They found other things to do now. But one important role and this is one of them, is in battery cases. So that encasing batteries for durability. And for longer performance is an important aspect of what we're bringing to the electric vehicle transition. I one other one is from more a little bit more on the polyurethane side, but across our company has to do with vehicle lightweighting. So the more you can replace heavy components of a vehicle with lighter weight, the materials that perform at least as well and sometimes better, then you can address things like range anxiety, you know, where How long will your car be able to travel on that one battery charge so, so battery casings, lightweighting. Those are a couple of areas where we play a role in electric vehicles.

So what do I do with all my CDs?

Yeah,

I got a bunch

of fun.

I got our army.

Now, I don't know what do we do with them?

Right? That's a very good question. We actually

have a project and it's not related to CDs but and DVDs. But I mean, if you think there's a desire for recollecting those, I'll actually bring that up internally. But Their work, let me give you let me give you an example though, in, in Asia, polycarbonate used to make these about two liter water bottles, you know, like the big water bottles, you stand up and put and dispense and they're used and refilled over and over and over again. But eventually they get too scratched or discolored, and people don't want to use them anymore. We're taking those back, grinding them up, and then re compounding them with other polycarbonate to use in electronic housing. So I could see a similar kind of thing with CD or DVD disc, but haven't haven't seen an effort to do that.

There's a business plan there. I think

there you go.

I think there's an idea Jonathan, anyone wants to help, because I know I have my own share. We have I think we have two questions. And then I want to wrap up and talk about STEM. And the role that covestro has. So Jonathan, you want to just talk about these two questions, right? Yeah,

absolutely. So I'm in Terra Cruz community, she says, um, we can only recycle ones and twos in the recycling plant is still losing money. They basically operate at a loss, it's a service to the community, what can be done to make recycling locally sustainable and profitable?

Yeah, and that's an that's a really good question. That is an issue because most of the local waste management is done through municipal contracts. And there's a a, you know, whatever the agreement is between the waste management company and the municipality, and one of the issues is it varies significantly from one municipality to another. So waste management is truly a local issue. Now, there are has been have been efforts, and there's one underway in Pennsylvania right now, to alter the state, municipal solid waste management policy to help encourage more consistency across those municipalities and as well as options to to exercise. So I recognize I have the same thing where I lived, there's very limited recycling. And I think it's something that certainly needs to be addressed.

Yeah. And Ts investor wants to know, what our customers expectations of those that you partner with, as it relates to, you know, being in the circular economy.

As far as we're collaborating with, you know, not in the value chain. There's a lot of important things in those collaborations. One, one is trust, that we're both coming to the party with an interest in making a difference, you know, trying to identify some quick wins, how to manage your interaction? Well, you know, communication is very important. How do you know that you're communicating regularly in developing relationships? So there's, there's a lot of things there. And then, you know, then you can get into the details of, you know, here are the specific deliverables that we're looking for from each of the parties who are participating. But But trust, and a willingness to develop relationships and communicate are key.

So the and the last thing, and then I just want to talk about STEM is that you focus on sustainability benefit your key customers, and do they see that is differentiator for restaurant

with circular economy and our customers? Yeah, certainly. And, you know, our customers are as aware of this trend, and the future direction as we are endless conversations, kind of saying, Well, what does this mean to you? What does this mean to you? And then thinking about how can we collaborate together, and our customers will play a key role in the success of the transition to circular economy. So

as we wrap up, I just want to tell you and everyone that today, we just finished our day two of our STEM summit, which is virtual, and this is a chance where we talk with educators, and kids, which is really amazing. Today, we had Microsoft with us tomorrow, we have shell games, we talked about coding, and just the just the amazing things that people are working on to inspire How does covestro work to inspire the future pipeline of people who are in STEM?

Right. And that's very important to us on several levels. One, you know, that, that the community understands the value that cholesterol is bringing here locally and across the country and around the world. But also obviously, that's our future in terms of the people who are going to be sitting in my job, some years down the road. So cholesterol initiated this AI three stem initiative soon after being spun off, you know, which includes elements of education, community engagement, and charitable donations. I will put in I know we're getting close to the end of time, but I will put in one plug that I think 30, which many of you have probably been aware of or participated in the past. And covestro, her host will have three sequential events over the second half of this month. Welcome to participate.

That's great. Yeah, we'll put a link out there, Jonathan is going to be moderating one of the panels for that, as well. It's really great. So how are you? How are you holding up through this current situation of pandemic and working from home and keep them safe?

Yeah. So I'm in the office today, but for the most part, I do have been working from home since mid March, as have all of the cholesterol employees who are able to do their their work remotely. We have a core group here that our business critical, but you know, we've made all kinds of changes to the site in terms of policy and signage and screening and like it like many others, I think folks are pretty comfortable with the way we're operating now.

Well, I want to just extend my appreciation for your work your leadership, Richard's Kopecky. He is so Penske sorry, do you think I would get that right? It's pretty fanatic. But thank you so much for your work and being part of this community. And if people want to reach out to you, are you open to that?

Absolutely. Yeah, feel free to, you know, you can text me on LinkedIn or my covestro. Email is very simple. It's first name, dot last name and covestro.com. So returning for penske.com.

Right. Well, I

thank you so much. I really appreciate your time. Thank you, professor for being an incredible steward in the community and for all that you do really appreciate you, allowing us to do a little bit of a dive with you on the circular economy and all the things that matter to us. And tomorrow is Wednesday. Who's on the show tomorrow, Jonathan? Yep. The one and only Ben Wilson from rivers agile talking about the raw workshop, reverse agile workshop, a really neat way that they put money into a company and get companies out of the ground while providing technical expertise. I cannot wait to talk to Ben. He's a good dude. Hey. Well, thank you so much. Thank you, Jonathan. Thank you, Richard. Thank you, best dro and thank you all for tuning in. Really appreciate it. Stay safe, everyone.

Thanks, Audrey.

Transcribed by https://otter.ai