On Tuesday, January 15th, Feike Sijbesma will visit Room for Discussion. Mr. Sijbesma is the CEO and Chairman of DSM, a Euronext-listed Dutch company that employs over 20 000 people around the world. In their own words, DSM is a “global science-based company active in health, nutrition and materials” with a keen focus on sustainable practices. This article will serve as a short introduction to Mr. Sijbesma, the history of DSM and its move from a state-owned mining company to a leading global supplier of nutritional ingredients and high-performance materials, and the rise of corporate sustainability and social responsibility.
Who is Feike Sijbesma?
Mr. Sijbesma was born in 1959. He went on to study molecular biology at Utrecht University and business administration at the Erasmus University in Rotterdam. In 1987, he joined the Industrial Pharmaceuticals division of Royal Gist-brocades NV. From 1990 to 1993, he served as the division’s Marketing and Sales Director. In 1995, he was made director of the Food Specialties division and, after the acquisition of the company by DSM in 1998, he became Director of DSM Food Specialties.
In 2000, Sijbesma joined the Managing Board of DSM. In 2002 and 2003 he led the acquisition of the vitamins & fine chemicals division of the Swiss pharmaceutical company Roche, as well as the integration of this division into DSM. Finally, in 2007, he became the CEO of DSM.
In the years since, he has worked on transforming DSM through divestments and acquisitons, repositioning DSM from a chemical company into a life and materials sciences company with a focus on sustainability, which he considers a responsibility and a business driver. Furthermore, he has increased DSM’s involvement in finding solutions for malnutrition and climate change.
He has received a number of awards for his efforts. In 2018, he was named one of the “World’s Greatest Leaders” by Fortune Magazine.
Royal DSM: from mining to materials and nutrition
Royal DSM was established by the Dutch state in 1902 in order to mine coal reserves in Limburg. After 1945, the company diversified its interests into bulk chemicals and petrochemicals, finally closing its last mine in 1973.
During the 1990s, the Dutch government floated its DSM shares on the stock exchange, and the privatisation of the company was concluded in 1996. DSM subsequently sold its interests in commodity chemicals.
Since 2015, DSM’s activities are clustered in three distinct groups: Nutrition, Materials and Innovation Center. The Nutrition group is divided into two segments, namely DSM Nutritional Products and DSM Food Specialties. DSM Nutritional Products produces essential nutrients, such as synthetic vitamins, for the animal feed, food, pharmaceutical and personal care industries. The Food Specialties division manufactures specialty ingredients such as yeast extracts, which are used in the dairy and baking industries, for example.
DSM’s corporate strategy is marked by a long-term focus on sustainability and the improvement of the eco-efficiency of their operations. An example of this commitment is that the compensation of the Managing Board and the bonus of executives being tied to both financial and environmental performance. Furthermore, their practices are in line with the Sustainable Development Goals outlined by the UN as well as those of the Paris Agreement. Their sustainable strategy has earned the company a number of accolades over the years. In 2018 alone, they were named one of the world’s 100 most sustainable corporations by Corporate Knights and in Fortune Magazine’s “Change the World” list, and they are often among the leaders in the Dow Jones Sustainability Index.
The rise of corporate sustainability and social responsibility
Last year, the UN’s Intergovernmental Panel on Climate Change released an extremely alarming report, which warned there is only a dozen years for global warming to be kept to a maximum of 1.5 degrees Celsius, beyond which even half a degree will significantly worsen the risks of drought, floods, extreme heat and poverty for hundreds of millions of people.
Within this context, corporations are expected to play their part in fighting climate change and improving global living conditions, and their actions are thoroughly examined by the media and the public in general. However, this hasn’t always been the case. The concept of sustainability in business emerged relatively recently and it has evolved over the years.
In the 1960s and 70s, environmental activists founded organisations that shone a light on the impact of business on people and the environment. Some examples are the World Wildlife Fund, founded in 1961, and Greenpeace , which opened in 1972.
With the rise of globalization in the 1980s and 1990s, which gave corporations access to cheap labour and resources overseas, came an increasing concern over the impact they had in developing countries. A high-profile exposé of working conditions in Nike factories prompted companies to start auditing their supply chains. Organisations such as the Fairtrade Foundation (founded in 1992) developed standards and guidelines which helped companies guide their responsible sourcing efforts.
In the last two decades, this focus on sustainability and social responsibility has increased significantly. The UN created the Global Compact, which is the first major membership body for corporate sustainability. Increasingly sophisticated methods of measuring and reporting sustainability and voluntary guidelines such as the Greenhouse Gas Protocol have prompted companies to routinely release reports on sustainability. In 2014, the European Comission introduced its non-financial reporting directive.
2015 was an important year for business sustainability, as the UN outlined the Sustainable Development Goals, supported by 193 countries. Similarly, the Paris Agreement was signed in that year, and business leaders were vocal in their support of it. It seems they’ve started to realise that long-term profits and sustainability are inextricably linked.
However, there is clearly still much to be done in this respect, as a 2018 study claimed that only 100 companies are responsible for 71% of global emissions. Furthermore, events such as the British Petroleum oil-spill of 2010 and the Volkswagen emissions scandal of 2015 are a reminder that we still need increased regulations and oversight.