Innovation in any industry can be driven by any number of external, as well as internal, factors. Innovation is how progress is made and better solutions, often in the form of products or services, find their way to the end user as safer, more affordable options.

Over the last two decades, and especially the latter one, there have been significant innovations made in the construction and manufacturing industries. Specifically, these innovations have revolved around energy efficiency, reduced environmental impact, and sustainability. A desire for “greener” solutions has been a major driving force behind the innovation in building.

Green building, a phrase that encompasses diverse certification programs and standards – often carrying the force of the law, has seen an increase of over 600 percent between the years 2005 and 2010. Paired with this increase in green building was a demand for “greener” input in building – both through products and processes. Not only were the consumers the world over calling for these greener inputs – seen as increased sustainability, increased workplace safety, and decreased environmental impact, so too were their governments.

During the late 1990s, the U.S. Green Building Council (USGBC) instituted a program known as LEED (Leadership in Energy and Environmental Design) to create a sustainability rating system for design and construction industries that would act as a nationwide, uniform basis for green building, thereby creating uniform improvement. As an example of LEED compliance, Target Corp. recently opened its first, U.S.-based, LEED Gold Certified store in San Rafael, CA. This store boasts of enough energy savings to power several thousands homes per year, enough water savings to fill 95 Olympic-sized swimming pools, and enough diverted construction waste equaling 4.5 Eiffel Towers. For all this to have been accomplished new products and processes were created, requiring innovation to take place. This is only one example of a LEED certified building; there are countless businesses that have set similar high standards on themselves as a way to outperform competitors.

In addition to LEED, other programs, organizations, and codes began emerging through this time period to encourage the implementation of green building and sustainability. For example, there is the National Association of Home Builders (NAHB); the International Green Construction Code (IgCC); the American Society of Heating, Refrigerating, and Air-Conditioning Engineers’ 189.1 Standard for the Design of High-Performance, Green Buildings; and even the Forest Stewardship Council (FSC) – which incidentally certified the wood that Target Corp. purchased for their LEED store, just to name a few. Though these are primarily focused on construction, there are many other industry specific codes and organizations as well.

“The adoption of green building rating systems and codes is eclipsing the role of governmental agencies and, as green building codes become mandatory, they are even outpacing federal and state regulations,” according to the American Coatings Association (ACA). The ACA, a nonprofit organization based in Washington, D.C., works to represent businesses and individuals in the coatings industry, as well as to maintain consistency between federal, state, or local laws for limits that are both economically and technically feasible.

As the rating systems are adopted and new standards are enforced, the need for specialty products increases. According to the ACA, “The green building standards contain a variety of requirements that either directly or indirectly impact the choice of paint, coatings, adhesives, and sealants products that are used in building construction,” many of which are provided by the coatings industry.

This is how policy drives the demand for new coatings technology and products – many businesses recognize the policies that exist, but simply innovate ahead of them.

For Ashland Inc., a supplier to the paint and coatings industry that offers a diverse product lineup, their collaboration with the customers in the market is critical to their innovation. Typically the regulatory changes are visible to the customers before they actually become instituted. As with any business, “Regulations and standards are part of the business landscape which we have to deal with,” stated Carolmarie Brown, director, global marketing and business communications. “The challenge for Ashland is … to be a more sustainable business.” For example, due to the longer product development time in coatings, Ashland looks to the potential needs of customers 3, 5, even 10 years out.

In many instances, innovation is driven by a need to accommodate consumers and by doing that, the manufacturers are staying ahead of the curve. Noting this specifically, Rick Barnard, VP, operations and product development at Colorhouse Paint stated, “Policy is not the reason for our innovations; our founding values are. As the consumer is the most important aspect for what we do, our mission is to produce high-quality paint and paint products for them.” To meet and exceed the consumer demand for green products, Colorhouse Paint has rethought existing products and innovated new ones to supply exactly what the consumers need and, therefore, are more than compliant with regulations. Colorhouse Paint has gone beyond that even by being LEED certified, exhibiting a high level of sustainability in their processes.

Not only are there federal policies and national associations creating their own standards and codes, but also at the state and local levels policy is being shaped and molded to fit particular regions’ needs. California, a state that is typically known for having more stringent regulatory codes than most, has been working on policy to require coatings manufacturers to increase transparency with their ingredients. This creates many concerns for the manufacturers, as they depend on some level of confidential, proprietary formulations to remain competitive. Similarly, California’s Proposition 65 amendments seeks to set new requirements for labeling and disclosure for consumer protection, while in Washington State, there is a proposed bill that adds uncertainty and further complicates the US regulatory landscape by institution of a reporting program for chemicals management to evaluate chemicals in certain products; similar programs exist in Maine and Minnesota.

As noted previously, many businesses may not be affected by regulations and standards; however, many are likely to be. As noted by Ms. Brown, the regulatory standards can affect businesses in such ways as adding increased cost to operations, but also may lead to the development of new renewable resources, reduce costs through improved operational efficiency, or reduce environmental impact, etc. In the industry overall, the policy changes have driven the development of reduced VOC products. They can also create new, unmet needs that other companies may then be able to meet. For Ashland, this approach – plus, collaboration with customers in the market – “has resulted in the development of [their] solvent-free Aquaflow nonionic synthetic rheology thickeners as well as products like Natrosol Performax HEC – a thickener that enables customers to save time, energy, and water in the paint manufacturing process.”

For those businesses, however, that find themselves caught in the whirlwind of new codes and regulatory standards, the ACA is there to help. Serving not only as a lobbyist for the paint and coatings industry, the ACA helps businesses navigate the often-turbulent waters of regulation – they host seminars, webinars, and workshops; they provide opportunities to share information and experiences; they act as a conduit between the regulated industry and agencies; they act as a consultant and offer compliance assistance; etc.

Currently, the ACA is working on compliance issues for many businesses in regard to the UN’s Globally Harmonized System (GHS) for Classification and Labeling of Chemicals. They are seeking relief for those companies unable to comply by the established deadline.

Looking forward, there are many opportunities for paint and coatings companies to grow and continue to innovate ahead of the curve, but it is important for those companies to be mindful of the current regulatory landscape and how it may shift in the future. As the building standards continue to adopt emissions testing requirements for interior finishes, for example, coatings businesses will be enabled to begin providing products that continue to increase energy efficiency and indoor air quality.

As noted by Tim Serie, Counsel in Government Affairs at ACA, “The paint and coatings industry strives to provide paint and coatings that achieve greater performance and durability while at the same time have a reduced environmental footprint. There is a continuing demand for environmentally preferable paint and coatings, but performance, durability, and longevity are still critical and lie at the core of sustainability.”