Gulay Serhatkulu leads BASF Corporation's Petrochemicals business in North America, focusing on growth, safety, sustainability, and operational excellence. Since joining BASF in 2006, she has advanced through roles in product management, marketing, and strategy, culminating as Senior VP of Performance Materials.

In a conversation with The Global Woman Leader Magazine, Gulay extensively shares her views on the future of the chemical manufacturing industry within a fully realized circular economy, highlighting major shifts in production processes, supply chain management, and the role of collaboration in achieving significant sustainability improvements.

How do you envision the future of the chemical manufacturing industry in a fully realized circular economy? What major shifts do you foresee in production processes and supply chain management?

Fully realized circular economy is an aspiration as we are at the beginning of this transformation in the chemical industry. and a lot needs to happen to accomplish it. The chemical industry has been built upon world-scale production, integrated supply chains, and cost-effective delivery of products to meet global consumer demands. Shifting these established infrastructures, investments, and networks of feedstocks and products to operate differently with alternative raw materials and energy sources is a complex task.

In principle I can answer this question in a traditional way saying, we need renewable or recycled feedstocks, policy development, product design changes to drive recyclability, infrastructure changes to collect and sort the waste but for all these to happen. 1) the demand for circular products should increase. Today, willingness to pay for sustainable products are very low. Because they are more expensive than their counterparts.  With willingness to pay and increase demand all industries will invest, and transformation will speed up.

How do leaders foster collaboration with suppliers, customers, and other stakeholders to create a more circular value chain? Can you provide specific examples where such collaborations have led to significant sustainability improvements?

Collaboration has always been a fundamental aspect of the chemical industry, even within the traditional linear economy model. The industry has thrived on innovation, recognizing that progress does not occur in isolation within the confines of a laboratory. We actively seek input from customers and suppliers, valuing their perspectives and insights while developing new molecules and technologies. Also, Sharing best practices through industry platforms is another key element, particularly in areas of safety and regulatory compliance.

These same principles of collaboration apply to the transformation towards sustainability. Engaging in coalitions and partnerships allows us to collectively define the rules of the game for sustainability within our industry. This collaborative approach has proven to be invaluable, providing a framework for progress and facilitating the adoption of sustainable practices across the value chain.

What sets sustainability transformation apart is the need to navigate and define new methodologies, standards, specifications, and certifications. Unlike the established rules of the game that guide our operations in other areas, sustainability requires ongoing engagement and collaboration to establish these frameworks. This process of definition and alignment is highly beneficial, enabling us to collectively shape a sustainable future.

However, it is crucial to approach these discussions with a focus on science-based facts and evidence. Non-science based opinions and speculations can hinder progress and undermine the credibility of our efforts. Therefore, it is essential to maintain a productive, solution-oriented, and progressive mindset throughout the sustainability journey.

How is shifting consumer demand for sustainable products influencing our approach to circular economy practices? What market trends are you observing that indicate a growing preference for circularity in chemical products?

The information age has brought about a heightened awareness of our individual carbon footprints and the impact our choices have on the delicate balance of the Earth. As a result, consumers in developed countries are becoming increasingly conscious of the environmental consequences of their purchasing decisions. There is a growing preference for products that align with circularity principles, driven in large part by younger generations such as Millennials and Gen Z.

These environmentally conscious consumers prioritize sustainability and actively seek out brands and products that align with their values. This shift in consumer behavior is pushing chemical manufacturers to adopt more sustainable practices and integrate circular economy principles into their operations.

Industries such as fashion and packaging are particularly focused on finding solutions that promote sustainability. They are actively seeking recycled products and exploring the use of biobased materials as alternatives to traditional resources. This demand for recycled and biobased materials is driving innovation within the chemical industry, prompting manufacturers to develop new processes and technologies to meet the growing market demand for sustainable and circular products.

How are circular design principles being integrated into product development within an organization? What challenges have you encountered in redesigning products to be more sustainable and easier to recycle or reuse?

When discussing sustainability and circular practices, it is important to recognize that different industries and products necessitate customized approaches. In some cases, efforts may involve increasing product lifetime to enhance durability, while in other instances, designing for disassembly may be feasible to enable recyclability. Throughout these scenarios, collaboration with our customers has played a pivotal role in finding effective solutions.

In particular, within the petrochemical value chain, my division primarily focuses on the transformation of feedstocks from traditional sources to recycled or biobased alternatives. This strategic shift in feedstock selection serves as a catalyst for driving change in our downstream businesses, aligning them with more sustainable and circular principles.

By adopting recycled or biobased feedstocks, we aim to reduce reliance on conventional fossil fuel-based resources and promote the utilization of renewable and sustainable alternatives. This transition not only aligns with circular economy principles but also contributes to the overall sustainability of the value chain by mitigating environmental impacts.

How do you cultivate a culture of sustainability and circularity within an organization? What leadership practices and incentives are most effective in driving the adoption of circular economy principles among employees at all levels?

Integrating sustainability into the business strategy and treating it as an integral part rather than a separate initiative is crucial for achieving success in sustainability efforts. It requires a comprehensive approach that aligns sustainability goals with the overall strategic direction of the organization. By embedding sustainability into the core business strategy, we can ensure long-term viability and resilience.

Setting clear aspirations, targets, and milestones is essential to drive progress. Establishing measurable goals provides a roadmap for sustainability initiatives and enables effective monitoring and reporting of progress. These targets should be ambitious yet achievable, motivating the organization to strive for continuous improvement.

Large-scale transformations often necessitate bold decision-making and calculated risks. Embracing innovation and investing in sustainable solutions can lead to significant breakthroughs and competitive advantages. By taking proactive steps to implement innovative practices and technologies, organizations can drive positive change and position themselves as leaders in their industries.

Education and awareness play a critical role in fostering a sustainability mindset within the organization. Providing employees with the necessary knowledge and understanding of sustainability principles equips them to contribute actively and make informed decisions. Continuous learning and development programs can empower employees to champion sustainability initiatives and integrate sustainable practices into their daily work.

What metrics and KPIs should we need to use to measure the success of circular economy initiatives? How do these measurements help in making strategic decisions and demonstrating progress to external stakeholders?

The ultimate measure of success in achieving a circular economy is the elimination of waste and the efficient utilization of valuable materials. However, in order to track progress and drive continuous improvement, it is important to establish key performance indicators (KPIs) that align with circularity principles. Several KPIs can be considered to measure progress towards circularity. These may include the percentage of feedstocks sourced from renewable or recycled sources, indicating the reduction of reliance on virgin materials and the promotion of sustainable alternatives. Another KPI could be the percentage of sales that have a circularity footprint, reflecting the integration of circular practices throughout the product lifecycle.

Increasing the durability of products in various applications can also serve as a KPI, highlighting efforts to extend product lifetimes and reduce waste generation. Additionally, measuring greenhouse gas emissions reductions, both in operations and in the lifecycle of products, can be a valuable indicator of progress towards sustainability and circularity.