Sustainability, technology, and innovation in the chemicals sector: A conversation with Bob Maughon, chief technology and sustainability officer at SABIC

In this next episode of The Heidrick & Struggles Leadership Podcast, Heidrick & Struggles’ Will Krents speaks to Dr. Bob Maughon, the executive vice president, sustainability, technology & innovation and chief technology and sustainability officer at SABIC, the global Saudi Arabia–based chemical manufacturing company, to talk about how Maughon has seen the greater chemicals industry evolve over the last five years, particularly in regard to sustainability and digital transformation. He shares what SABIC is currently prioritizing, some big achievements and goals, and also how he is thinking about continuing to build teams to deliver on those goals. Finally, Maughon discusses the benefits of the duality of his sustainability and technology role, and what skills and experiences he believes will be most important for the next generation of sustainability leaders in the chemical industry.

Below is a full transcript of the episode, which has been lightly edited for clarity. 

Welcome to The Heidrick & Struggles Leadership Podcast. Heidrick is the premier global provider of senior-level executive search and leadership consulting services. Diversity and inclusion, leading through tumultuous times, and building thriving teams and organizations are among the core issues we talk with leaders about every day, including in our podcasts. Thank you for joining the conversation.

Will Krents: Hi, I’m Will Krents, a principal in Heidrick & Struggles’ Boston office, and a member of the global Industrial Practice. Today, I’m thrilled to be joined by Dr. Bob Maughon. Bob is an executive vice president, sustainability, technology, and innovation, and chief technology and sustainability officer at SABIC, the global chemical manufacturing company based in Saudi Arabia.

He oversees the organization with 19 research centers and a talented team of over 1,700 people focused on process, product, and application innovation to support SABIC’s growth. Additionally, he has responsibility for corporate sustainability, low-carbon business development, product stewardship, technology licensing, technology ventures, and chairs the ESG Steering Committee.

Prior to joining SABIC in 2019, Bob completed a 21-year career at Dow, most recently serving as the R&D vice president for packaging and specialty plastics and hydrocarbons. He also serves as a member of the board and executive committee for the PIF Saudi Investment Recycling Company, Alliance to End Plastic Waste, and World Plastic Council. 

In addition, he serves on the University of Michigan Engineering Leadership Advisory Board, American Chemical Society Sustainable Development Advisory Council, American Chemical Society CTO Roundtable, World Business Council for Sustainable Development, Global Impact Coalition CEO Advisory Board, and Value Balancing Alliance Steering Committee.

Bob, welcome and thank you so much for joining us today. 

Bob Maughon: Will, really a pleasure to be here. Thanks for the invite. 

Will Krents: Oh, it’s our absolute pleasure. So thrilled you could join us. So why don’t we go ahead and get started here. You joined SABIC in early 2019. How have you seen the company and the greater chemicals industry evolve over the last five years, particularly in regard to sustainability and digital transformation?

Bob Maughon: Yeah, I would say, first off, I think that was a drive for me taking the role at SABIC. You know, I had a great career, a great company at Dow Chemical for about 21 years. The last five of that, I’ve been very focused on plastics, innovation, process, product application, engineering for plastics. But clearly the sustainability pressure was entering the plastic space.

And so a lot of our work was aimed at sustainability-driven solutions. And when SABIC came with an opportunity to join, not just as the CTO to drive technology for SABIC but also sustainability, it provided an immense opportunity. The challenges for the sector—if you think about big issues for the chemical industry, how are we going to decarbonize our assets? How do we develop more circular solutions and more, you know, recycled content in our plastic production? How do we deal with end-of-life for the materials that we use? How do we deal with the evolving regulatory frameworks around product safety and disclosure, for example, reach and other areas, and the expansion that’s happening on product safety as well.

There are immense challenges. These are not just disruptive in terms of regulatory positioning, but in terms of how we make what we make. And so it’s been a profound disruption, to your question, for the sector. I think it’s had a huge impact on thinking about new business models, thinking about how we redesign our assets and how we design plans for the future.

So whether it’s enhancing supply chain and operations, whether it’s driving engagement with customers, whether it’s improving the operations in our plants. And those digital tools are inherently connected to the sustainability push. You know, how you’re going to get energy efficiency, how you’re going to drive better operations, lower carbon emissions—all of that’s tied to leveraging enhanced tools there.

The rise in digitalization has been, of course, very rapid, leveraging machine learning and AI and other tools. But it’s intimately connected to just driving what we’ve always tried to do, which is drive efficiency and improvement in operations. But this gives us another lever, another set of tools to do that.

Will Krents: When you think about your firm, in particular, at SABIC, I’d love to get your perspective on what you see as the biggest achievements in sustainability and digital transformation since you’ve joined. And what are you really prioritizing right now? 

Bob Maughon: Yeah, you know, it’s an interesting question because a lot of times I think there’s a perception around the Middle East and the fact that it’s dependent on petroleum as a key part of its economy. You know, why would there be a focus on sustainability? What does sustainability mean for the sector? What does it mean for companies in the Middle East? It’s interesting, if you go back in the history of SABIC, SABIC was formed as a result of the oil exploration in the kingdom and needing to monetize and address the gas that was being produced.

If you look at where we’re focused today, it’s really on a few key pillars. One is energy efficiency. So even before significant pressures around decarbonization, there was a clear drive within the kingdom to become more energy efficient. We actually are now regulated in that space by the government of Saudi Arabia. We have benchmarks that we have to perform against. We have to deliver on cycles of improvement versus these benchmarks. And actually, we’re penalized if we don’t deliver on the energy efficiency toward first-quartile performance of the assets that we operate.

And that feeds directly into decarbonization. And clearly, that’s the thing that’s affecting the whole industry. We have a significant exposure on scope one, two, and three emissions because of what we produce, and one thing that’s often missed for the chemical sector, I think this topic of decarbonization becomes very complex for many folks, but in reality, it’s pretty simple for our sector. Over 80% of our emissions come from heat. And so we need to find better ways to deliver heat to our operations to drive the chemical reactions that we deliver. 

And so, if you think about the things that I’m really proud of: We’ve driven a significant improvement in our energy efficiency and our assets, meeting the targets that have been laid out from a regulatory framework standpoint. We’ve laid out a carbon neutrality road map to 2050, aligned that with our board, and presented that externally. And we’ve been on, not just laying out a road map, but actually executing against that. We have a target to deliver 20% reduction by 2030, and we’re well on our way and over halfway there at this stage, so over 12% reduction since our baseline of 2018. So I’m really proud of that.

I mentioned that we need to replace heat with low-carbon sources. There are really three ways for us to do that. One is using hydrogen as a fuel in our assets. One is electrification directly of our furnaces, especially the elephant crackers, which are one of our largest emitters. And lastly, it’s where you have to do in carbon capture. We’ve committed as a company to deliver all three of those at scale and full operation by 2030. So that from 2030 to 2050, we can roll out the best solutions to fit the geography of our assets, because we’ll need all three of those. 

But we’ve committed to have as a scale, those are actually approved capital projects that are moving through the gaining process now. And one of those, I think about where I’m really proud, is electrification of our furnaces. That process will deliver over 90% reduction of our carbon emissions. And so I think things like that—taking risks is what I’m proud of. You know, investing in innovation, being committed, being willing to lead and demonstrate the technologies that are necessary for the future. But at the same time, doing it in a responsible way where we recognize that we need to drive economics and value for our shareholders at the same time.

Will Krents: That makes a lot of sense. I’d really be curious to understand, as you think about how you’re building the team you’ll need, what are your focuses to really deliver on these goals?

Bob Maughon: Absolutely. It’s interesting because when I came in, you know, I had the responsibility of both the CTU and CSO role, but you know, sustainability has been and still is an evolving space. So we laid out a core team at that time that was responsible for our sustainability policy and advocacy and our key investments, and driving the recommendations to the business on what we needed and drove product stewardship.

But over time, the need to address carbon neutrality, the need to address circularity arose. The need to address ESG reporting standards arose, and we actually just completed last year a new operating model project with our [executive committee] and the CEO, which included, “How do we want to structure the sustainability organization for the future?” And I’m really proud of that because we put a lot of work into what are the skills needed. And as you highlighted, it’s a very diverse set of skills. So if you think about that team, I have an organization focused on product stewardship, which is, I think, a more traditional set of skills around product safety, where you need strong analytical, policy, advocacy skills, regulatory understanding.

We have a team focused on clear sustainability policy and advocacy, which is really critical for our businesses to help guide them on what’s happening and how do we address the standards that are coming. We have an ESG reporting organization that’s very clear on delivering a road map of how do we address more transparency and improve our performance across ESG standards.

We have a technology-based team that really focuses on sustainable operations, so it’s focused on life-cycle assessments and how you deliver the data to make sure you know the footprints of your products. Also, what’s unique is we built a low-carbon business unit that sits within my organization that’s focused on how do we have the infrastructure and business cases to deliver the value as we get into a space where you’re now having more low-carbon products as part of your portfolio.

How do you, one, build the infrastructure and business cases to scale those projects? But then at the same time, how do you make sure you kept to the value in the market with partners? So that’s a critical piece. And then we have a team focused on delivering the carbon neutrality road maps within our affiliates, within our assets. And so you need people that have manufacturing expertise. You need people that have technology expertise. You need people that have a regulatory understanding. You need strong technical capabilities. You have to have people that can honestly communicate and represent what you’re doing to the outside world and to the stakeholders that matter, whether it’s our investors or it’s the governments that we engage with or our customers, the value chain.

You need to have an understanding of legal compliance as well. So there’s a broad suite of capabilities that are needed. And what I guess I’m excited about is we brought all that together in a holistic way. Does it fully house everything that we need? I think no, because I think as we go forward, the landscape becomes even more and more complex. And that’s, I think, what’s been unique over the last five years, and it’s driven probably the change in how organizations think about sustainability roles. 

Will Krents: Yeah, I think it’s really fascinating that you hold both of those roles at SABIC, because as you pointed out, there is a policy piece, of course, communications is critical, but at the end of the day, you have to develop the right products, the right strategy to really meet your sustainable goals. So having the technology and sustainability piece really makes a lot of sense. 

Do you think this is a model that should be thought of for others in the industry? I mean, how do you see the role evolving? Is this the new template you think works well? 

Bob Maughon: My personal belief is I think it is a good template. And I think there are different templates. And, you know, from my view, if you just think of examples where there’s been a move towards this model. I think you’re seeing clear examples of large players in the sector having this example. I’d even highlight my previous company, Dow, who I think has also had great performance in this space.

The current CSO for Dow was one of my peers in R&D at Dow before, so I think, coming with a technical mindset. So I think you see more and more of it. It doesn’t mean different models won’t work and don’t work very well. I think what’s essential is that the culture of the company is accepting the new direction of where it’s headed and that you have to be building projects and executing new ways of doing the work and the way you make your products. And so you need to have the skill set within the organization to recognize what’s different and how do you deliver that. I think technology roles are a great way to build that in because we’re used to trying to execute on new processes, new products, new applications. And so I think that’s why it works exceptionally well. I mean, one benefit you get is now I can look at the R&D pipeline and I can be very clear on how do I prioritize that pipeline to deliver the sustainability impact in the most substantial way. And in fact, I’m accountable for doing that. 

Again, I think lots of models work, but I think roles where the skill set and expertise is in execution, whether it’s business, manufacturing, or technology, I think help, because I think they can drive that action and convince others in the [executive committee] or leadership teams of what’s needed to achieve it, because I think when the role is too much of an advisory role in leadership teams, where you’re having, through influence, to try to get all of the stakeholders to buy into making a change, it can be very difficult, and you’ll find this frustration, I think, with a lot of CSOs. 

When you have the ability to have an execution arm within your organization that can deliver the solutions, I think, one, it brings credibility, and you’re in a better position to guide the executive teams and the CEO toward the right sets of solutions. To me, that’s, I think, why it works. 

Will Krents: No, that’s a great point. And obviously you bring a tremendous amount of skill and experience to the role. 

As you look out into the future, you think about what you’re doing today. Are there new skills or capabilities that you’re developing or that you’re looking for as you build out your team?

Bob Maughon: You know, you think about the skills I highlight for the organization, I think in terms of dealing with the challenges that we’re facing from a product and process and footprint standpoint, I think we covered the skills and I think we have them.

When you think about ESG reporting more broadly, and you go beyond the environmental reporting to social and governance reporting and the evolution that’s happening there. For one, it’s for me, been an excellent opportunity to learn and for us to build our capabilities there. I think it’s also been great to be able to drive the transformation within SABIC in terms of transparency on all three of those factors.

And just on that point, I’m excited because we will deliver our first integrated report this year. And I think that’s a big step for us to bring our sustainability reporting and financial reporting. Not just combined together, but to demonstrate the integrated thinking around how those things are connected in our story.

But I think those skill sets are evolving in terms of what do you need to understand from a policy, from a human resources capability, from external collaboration, I think there are a number of avenues that are, from a legal perspective and compliance, those things are extremely accelerating, right, in terms of what’s being expected. And I think you’re going to have to make sure that you have, either within your organization and sustainability or through partnerships with your peers across the other organizations, you need to drive that and you need to have a company culture, which I think is the biggest thing that recognizes that there’s a change in how we have to report out to our stakeholders and our shareholders. And that means a different level of collaboration and transparency in areas that we didn’t have before. And so I think to me, that’s the biggest change. It’s not new skills, it’s new information we have to process, but the ability to work across finance, across technology, across manufacturing, human resources, and the business.

It’s one thing to drive profitability. And I think we have in the industry an exceptional capability of knowing how to manage through cycles and deliver profitability working together. But when you have to balance that profitability with a different set of decisions and prioritization that customers in the value chain have, and governments may have, about your products, that’s a whole different level of incentives, of drivers, of priorities that you have to bring not just the sustainability organization up to par on, but you have to bring the whole executive leadership team.

Will Krents: Sure. And that’s a great point. And you’ve got a lot of stakeholders you’re working with. You obviously, in addition to your day job, have a number of different roles in a non-executive director capacity. So I’d be curious, if you think about your experience, both as a chief technology officer and chief sustainability officer at SABIC, how have those added perspectives and insights been applicable to your non-executive director roles, for example, the work you’re doing at the University of Michigan Engineering Leadership Advisory Board or the Aspen Tech Executive Advisory Board. We’d love to get your perspective as an advisor, how you think about it. 

Bob Maughon: Yeah, I think they’ve been very helpful, actually. I mean, I think about University of Michigan. I mean, for one, it’s a great learning opportunity, right? To go into the division, because it’s one of the largest engineering divisions in the US and understand how it works and how they make decisions, and how they prioritize investment across all the disciplines of engineering. 

But if you think about what I can bring in, I think that’s the message that, you know, one of the things that we have to bring in is like, what are the research programs that University of Michigan should be supporting and taking a risk in? What are the industry transformations that we have to prepare that workforce for? And University of Michigan is a great one where you have strong legal and medical and engineering and technology and policy capabilities, but they need to work together in a different way. And I think they recognize that. 

So I enjoy these kinds of experiences with these companies because you get to really, one, from your peers, understand how they’re working and how to get benefit from the interaction. But you also get to guide these companies on where their products need to be for the future. 

Will Krents: That’s terrific. So one final question as we bring the conversation to a close. We touched on this a little bit already, but looking ahead, what skills and experiences do you believe will be most important for the next generation of sustainability leaders in the chemical industry?

Bob Maughon: You know, I would just put it a bit more broadly. I think if you’re going to be in technology or sustainability roles, and I think it’s relevant to both, I think if you’re going to be in technology, you need to have an understanding of the sustainability impact of the processes and products that you’re making, and you need to make sure that sustainability principles are built into the design of your solution. 

And that’s a level of thinking that is different than in the past, where in the past it would have been, you know, how do I get more efficiency, more cost out, you know, more profitability, more margin, for example. I think those things have to be integrated with these other principles. And I think from a sustainability perspective, for sure, you need people. And where we’re going to draw talent from is people that have business experience and can build new business models, new ways of thinking, because the way we capture value from our sector in the future is likely going to change.

You need clear understanding of manufacturing operations and how we make what we make, because if you’re going to help transform it, you have to be grounded in an understanding of what we are. You need to have, again, whether you have technology experience or whether you understand the technology hurdles and are willing to listen to the boundary conditions from the technology organization. And they require an understanding of the policy so that you know what you deliver is going to meet the needs of the regions you’re serving. So, fundamental change, leaders really have to evolve their broader skill sets. 

And it’s not just in technology and sustainability. I think all business leaders and manufacturing leaders, finance, human research—all the groups really have to evolve what they look for in candidates as we go forward.

Will Krents: Great. Well, listen, Bob, really appreciate your time today. Thank you so much for joining us and hope to hear from you again soon. 

Bob Maughon: Excellent. Thanks, Will. Really enjoyed it.

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About the interviewer

Will Krents (wkrents@heidrick.com) is a principal in Heidrick & Struggles’ Boston office and a member of the global Industrial Practice.