The largest European chemical producers have started stepping up their chemical management game, while North American ones have dropped the ball, and Asian companies seem to have left the playing field altogether. This is one of the key findings in the third annual ChemScore ranking.
ChemSec’s ranking tool ChemScore assesses the world’s 54 largest chemical companies on their environmental impact and hazardous chemicals management, setting the benchmark for a sustainable chemical industry.
The third annual edition of the ranking reveals that the industry as a whole is still taking little or no action to solve the global chemical pollution crisis, despite the risks posed to human health, the environment, and shareholder value.
Overall, the results are no better than last year, discouragingly enough. Few companies have made significant positive changes, and nearly half have scored worse than they did in 2021.
There are, however, regional trends.
“Few companies have made significant positive changes, and nearly half have scored worse than they did in 2021”
Although no global region comes close to achieving even half of the maximum of 48 points, European companies have significantly improved their average score from 15.1 last year to 17.7 this year. In contrast, the average total score of companies based in North America and Asia have dropped from 13.6 to 12.6, and from 11.8 to 10.7 respectively.
Four main reasons why
There are several reasons for these regional differences. Here, we list the four main ones, along with comments from Sonja Haider, ChemSec’s Senior Business and Investors Advisor, as well as one of the main experts behind ChemScore.
First, continued low transparency regarding which chemicals are being used or produced remains a huge liability for Asian companies in the ranking.
“This low level of transparency is due to the lack of public records, combined with the companies’ unwillingness to share this information”
This low level of transparency is due to the lack of public records, combined with the companies’ unwillingness to share this information, with a devastating effect on their results in ChemScore.
Although few Asian producers can compete with US-based DuPont’s newly established opaqueness. The company has decided to hide its entire chemical production in the US behind the label of “confidential business information”, effectively rendering it impossible to assess.
“Transparency is such an important aspect of chemical management. Without it, we have no way of knowing what comes out of those factories, into the various markets, and – eventually and inevitably – into the environment and our bodies”, says Sonja Haider.
Second, several companies in the ranking – mainly the US-based ones – have actually increased the number of hazardous chemicals in their product portfolio, rather than attempting to phase out existing ones.
“This is of course a surprising and very disappointing trend, especially in a country where the cost of liabilities due to PFAS pollution is exploding, and more than a few states have adopted a progressive chemical legislation”, Sonja Haider continues.
Third, the EU Green Deal, which includes the Chemicals Strategy for Sustainability, plays a key role in driving sustainability forward. The key aims of the strategy are to ban the most harmful substances from consumer products, restricting PFAS, and strengthening REACH.
“If the Green Deal and the Strategy are made into legislation as intended, they will – alongside the Sustainable Finance package – be key for preserving and protecting our planet, environment and health, and support the transition to a sustainable business model”, says Sonja Haider.
Fourth, progressive European asset managers are leading the engagement with companies; 47 investment companies managing a total of 8 trillion USD wrote a letter to the 54 largest chemical companies before ChemScore 2022 was launched, urging them to phase out hazardous chemicals from their product portfolios.
“The number of investors backing this call have more than doubled in just one year”
This means that the number of investors backing this call have more than doubled in just one year.
“Clearly, more and more financial actors are realising that chemical safety and stricter environmental legislation are not obstacles, but quite the opposite. They drive innovation and lead the way towards a more sustainable and circular economy, which is really our only viable option”, Sonja Haider concludes.