This year’s ranking, released today, demonstrates that the biggest chemical companies:
- Are making only slow progress on switching to sustainable chemicals (see Table 1);
- Continue to rely overwhelmingly on the production of hazardous chemicals instead of safer alternatives (Table 2);
- Notable exceptions to this overall picture demonstrate in practice that another path is possible (Table 3, page 3).
ChemScore is the only independent ranking of companies producing chemicals, and their efforts to transition to safer alternatives. Since its launch in 2020, the index has established itself as the industry benchmark.
Table 1: ChemScore average annual totals (max. score = 48)
Table 2: Hazardous chemical portfolio (max. score = 18)
ChemScore was originally prompted by investor concern about potential damage to their investments in companies using or producing chemicals registered as hazardous. In 2021, 23 investment companies with $4.4tn in assets under management wrote to the companies covered by ChemScore, requesting that they engage with the ranking. The following year this grew to 47 investors with $8tn under management, and in 2023 this became 51 and $10tn respectively. This year, it stands at 70+ companies with $20tn under management.
Engagement of chemical companies with ChemScore has also grown substantially since the index was launched five years ago. In 2020 we received replies from 54% of companies. In 2022, 57% responded to our requests for information, which grew to 68% in 2023 and 71% this year. Partly this is a reflection of the fact that we have listened to companies and shaped ChemScore to consider their remarks on the methodology. We are confident that the criteria we use to compile the ranking encompass the essential aspects of corporate management in the chemicals industry, and that therefore the ranking is both accurate and authoritative.
The engagement figures demonstrate that ChemScore is relevant to large chemical corporations, many of which see it as an opportunity to highlight their sustainability efforts. ChemScore is now a trusted tool that supports corporate sustainability departments. It has enabled a better public understanding of the work companies are undertaking on hazardous chemicals management, and our transparent methodology means companies themselves can understand the thinking behind the index and gain insight into investor concerns. We have learned from insiders that a low ChemScore rating can cause concern among senior managers, who closely scrutinise our methodology to maximise their company’s score. Some companies publish their ChemScore ranking on their websites.
Nonetheless, this aspect of sustainability still struggles to be recognised as part of the mainstream debate over transitioning towards a green economy. The focus of environmental concern for the past two decades has been climate change, and chemical pollution is only now beginning to get traction with the PFAS crisis. Companies are still inclined to see the substitution of hazardous chemicals as a short-term cost that weighs on their bottom line. While some are on the right track, others are actively fighting to maintain their conservative approach, defending hazardous chemical production by spending millions on lobbyists and thinly-veiled propaganda.
Chemical pollution and its financial effects are still externalised. This is not like carbon dioxide, where companies can also cut costs by saving energy. Consequently, chemical corporations frequently talk up their green credentials while continuing to use enormous amounts of hazardous materials in their global operations. Most are well aware of the toxicity of their products but are reluctant to admit this in public, hiding behind platitudes about “safe use” and “proper risk management”.
Without clear and strict regulation of toxic chemicals, companies will continue to present their products as “green” and “sustainable”. The idea of the triple bottom line – a cost-benefit calculation in terms of profits, people and planet – largely remains wishful thinking in this sector. Phasing out hazardous substances requires a paradigm shift followed by continuous, long-term work. The Covid pandemic demonstrated that bold, rapid and effective measures can be taken when there is the will to do so.
In-depth information on individual chemical companies is available on the ChemScore website. Each company has a detailed report card with a short summary and analysis, as well as three improvement points. It is also possible to view report cards from previous years and see if a company has reduced or increased its toxic chemical footprint.
Five-year highlights
The ChemScore overall average score has gradually increased each year since 2021 (see Table 1 above). This reflects the fact that many companies want to score higher and are adapting their reporting to what we ask from them. There is a large difference in performance between companies, demonstrating that change is possible. In other words, there are no structural obstacles to prevent companies cleaning up their acts – it is a matter of will.
Unfortunately, we see very little decrease in the production and use of hazardous chemicals. Improvements in overall score are mainly through better assessment practices, better chemical management policies and development of greener chemicals (see Table 2 above). Some firms have hit a ceiling and will only maintain momentum if they reduce their hazardous portfolios. At the same time, the achievement by some companies in raising their scores shows that ChemScore is gaining traction within sections of industry (Table 3). There is a growing understanding of investors’ concerns that hazardous chemicals can hit the bottom line.
Table 3: Largest improvements in overall score (max. score = 48)
Just a few weeks before 3M’s announcement, the Financial Times reported that institutional investors with $8tn in combined assets were demanding that manufacturers phase out PFAS. These investors were coordinated by the Investor Initiative on Hazardous Chemicals, which is administered by ChemSec. 3M and other PFAS producers are still facing billions of dollars in lawsuits from individuals and states alleging that PFAS contained in their products has contaminated rivers and caused health problems, including cancer. Many states are implementing legislation that will impact producers.
Other highlights of the past five years include:
Dupont embraces transparency: Three years ago, the US chemicals giant removed all details of its North American production portfolio from public scrutiny, making it impossible to assess what kind of chemicals the company produces. This was the opposite of what we wanted to achieve: greater transparency. Dupont did not explain its reasons, other than claiming that it was legal to do so under US chemicals law. There was speculation it was because of the rise in PFAS litigation.
Now Dupont is back, we are delighted to report. In May this year, the company reached out to ChemSec to tell us that it was re-engaging once more with ChemScore. After ChemSec has had the opportunity to evaluate the information Dupont submitted, the company said it “would welcome an opportunity to meet with ChemSec. We value your feedback and look forward to hearing from you.”
Dupont’s decision to re-engage with ChemScore is a measure of the index’s power within the investor community and the industry itself. Toxicity is becoming a mainstream concern, and ChemScore meets a need for reliable data and insight.
Get all the insights!
Subscribe to our newsletter.
Lanxess works to phase out hazardous substances: Until recently, Germany-based Lanxess made use of a high number of substances on the SIN List – the benchmark list of toxic chemicals used widely as a reference point within industry. In recent years, Lanxess has reduced the number of SIN List chemicals it uses by 70%. The company has almost doubled its ChemScore score since it joined the index in 2021.
Lanxess is one of only six companies in the ranking that provide clarity on their global hazardous product portfolios. This means it is helping to set two standards for what should be expected of all chemical companies: full hazard transparency and designing out substances of very high concern from new products.
Lanxess states publicly that it will not develop or market new end-products containing more than a tiny amount of chemicals that “have the characteristics of a substance of very high concern (SVHC)”. This careful wording helped to clarify that the company will not seek to substitute a regulated SVHC with an unregulated SVHC (a practice known as “regrettable substitution”). The company said it would be “ruined” if those substances were later banned, making such a move not only the right thing to do, but also a sensible business decision.
Indorama Ventures stands out in Asia: This Thailand-based multinational, one of the largest producers of polyester in the world, has consistently found itself in the top three ChemScore companies and scored twice as high on average as the Asia-based companies taken together. Indorama’s record is a marker of the company’s continuous efforts to implement sustainable chemical management. It is the only company in Asia to publish a strategy to phase out hazardous chemicals from its portfolio.
“Indorama Ventures is honoured to be recognized among the top 3 in the ChemScore ranking, demonstrating our commitment to responsible environmental and product stewardship under our promise of ‘indispensable chemistry’,” says Yash Lohia, chair of the company’s ESG Council. “We place sustainability at the centre of everything we do, including how we develop our portfolio of sustainable products, our careful attention to minimising hazardous chemicals from our processes, and investing in innovation to ensure our products meet increasing demand and industry standards for safer and greener products that take care of our environment and communities.”
SABIC leads on transparency: The Saudi Arabian multinational chemicals manufacturing company is the second-largest public company in the Middle East. For the past three consecutive years it has topped the ChemScore rankings for management and transparency around hazardous chemicals. It is one of only five companies with a public strategy to exit toxic substances, scores highly for its circular economy practices, and has nearly top marks for its health and safety record. Its transparency exposes the general excuse given by the sector (commercial secrecy) for lack of disclosure.
Insufficient progress: During the five years of ChemScore, significant progress has also been made by Yara, Ecolab, Johnson Matthey, LyondellBasell, Sasol and Wanhua, which have either made rapid leaps up the ranking or effected sustained improvement. However, it must be noted that the industry as a whole, including individual companies at the top of the ranking, is still far from achieving scores that might reassure investors that their investments are secure, and citizens that their world is safe. Only four companies have achieved an overall B or B- rating during the five years. Almost 80% of the ratings have not even achieved a C. The 5-year average score on ChemScore is under 14, out of a maximum of 48; the average for product portfolio is 2.7 out of a possible 18 (see Tables 1 and 2 above).
In short, the giants of the global chemicals industry continue to lag far behind the standards that should be expected of them.
BASF continues to disappoint: The world’s largest chemical producer by revenue, BASF, fails to show leadership on reducing toxic substances. In 2024, its score ticked up to the same level it achieved in 2021. Its hazardous chemical portfolio remained static at 135, including 27 persistent chemicals, and it failed to publish details of safer, alternative substances that it claims to produce. Once again, the company picked up zero points for its record of accidents and controversies. The global market leader must be more transparent and step up substitution efforts dramatically, starting with its persistent chemicals, which bring huge risks.
2024 highlights
Yara, one of the world’s largest fertiliser producers, topped this year’s ranking thanks to, first, its continuous efforts to improve its chemicals management, and second, making an important step towards transparency by revealing its full global portfolio of hazardous substances. Rune Bratteberg, VP Product Stewardship and Compliance, said:
“We are thrilled to learn that Yara has ascended to the leading position in the 2024 ChemScore rankings. This achievement is a testament to our relentless dedication to enhancing chemical management and advancing our safety culture across the company. … Earning the top score in ChemScore 2024 is a powerful endorsement of the sustained effort and dedication of our entire team. While we celebrate this milestone, we recognize it as one step in our ongoing journey of HESQ excellence.”
This year, 20 of the 51 companies in ChemScore are now marketing products on Marketplace, ChemSec’s tool where manufacturers can advertise alternative products free of hazardous chemicals. In 2024, several of the largest, including BASF, Dow, SABIC, Arkema, Daikin, and Ecolab, started advertising safer products on Marketplace. This has significant symbolic value, as many companies have previously been hesitant to advertise alternative products. However, we have noticed that some advertise just one single product, which entitles them to receive an extra point in the ChemScore ranking but is a drop in the ocean compared to these companies’ overall portfolios. The ambition of a sustainable company should be to advertise as many alternative products as possible.
Other companies that made notable improvements in 2024 were:
- DuPont went from no grade at all (for two years we could not rank the company because of its total lack of transparency) to 10 points, thanks partly to a renewed openness and actively engaging with ChemScore.
- LyondellBasell went from an overall score of 16 to 23 due to its transparent global portfolio, a clear phase-out plan for PFAS in consumer products, and statements on intermediates/monomers.
- DIC Corp went from from 8 to 13 due to a sharp fall in accidents and controversies.
- AGC went from 7 to 12 due to improvements in a few fields: circular chemicals, safer alternatives and engaging with ChemScore.
- Ecolab increased its score due to more circular and biobased products and policy, and reporting on their SVHC revenue.
- Sasol from 17 to 21 due to its transparent global portfolio.
- NanYa Plastic from 14 to 18 due to more circular products without hazardous chemicals, and reduction of waste.
Plastics
Coinciding with ChemScore’s scheduled release, there is heightened public interest in plastics owing to the negotiations to finalise an international, legally binding treaty on plastic pollution taking place this week in Busan, South Korea. This crucial debate over plastics is focused on the sheer quantity of plastic waste that is polluting the environment, particularly the oceans.
The quality aspect to plastics is often overlooked, however. Plastics are made from chemicals – mainly derived from petrochemicals – many of which are known to be hazardous. This includes the polymer backbone forming the bulk material as well as intentionally added substances, including processing aids and additives. Importantly, non-intentionally added substances, such as impurities, reaction by-products, and degradation products, are also chemicals frequently found in plastics.
Featured news
The world’s main chemicals producers are therefore also the producers of the bulk of the world’s plastics. ChemScore provides an opportunity to examine this aspect of plastics production, because the companies covered by the index have been consistently classified by seven different sub-sectors. Some 70% of the companies in ChemScore are producers of plastics under this definition, and can therefore be analysed as a separate category.
There are two important caveats to this analysis. First, ChemScore includes the 50 largest publicly listed chemicals companies by revenue (51 this year because Solvay span off its specialty chemicals business into Syensqo). It therefore excludes smaller chemicals producers and large, privately owned companies (such as INEOS Group, Sinopec and Petrochina). ChemScore companies have an aggregate annual revenue of approximately $1.1 trillion, while the sector as a whole amounts to approximately $6 trillion.
Second, some major chemicals and plastics producers are classified by the Global Industry Classification Standard (GICS) as oil & gas, not chemicals. ExxonMobil, for example, makes the lion’s share of its revenue from oil and gas, but it also has a substantial chemicals business. ChemScore excludes ExxonMobil because chemicals are not its main business. Having made these caveats, and being careful not to over-interpret the results, the ChemScore database nonetheless reveals a startling picture of the world’s biggest plastics producers. A clear picture emerges, revealing that Europe’s biggest listed plastics companies rely on stubbornly high use of toxic chemicals in their production. Plastics companies are in line with the rest of the global chemical industry on a range of indicators for the production and management of toxic chemicals, but for five consecutive years European plastics producers have lagged behind other plastics producers, and chemicals corporations as a whole, on their toxic footprint. Moreover, they have shown zero improvement on this indicator during this period.
ChemScore index: European plastic producers
** Development of safer chemicals and circular products
At the same time, Europe’s major plastics producers lead the world on innovation of safer and circular products, and show steady improvement on this metric. Taken together, these two indicators suggest that the industry is focusing on innovating new products while leaving its legacy manufacturing – the vast bulk of its output – untouched. The large European plastics companies included in this analysis are Arkema (France), BASF (Germany), Covestro (Germany), Evonik (Germany), Lanxess (Germany), LyondellBasell (NL), Sika (Switzerland), Solvay (Belgium), Syensqo (Belgium).
While the world is clearly producing far too much plastic, these plastics – and those produced in Europe in particular – rely far too much on toxic chemicals to impart specific qualities to plastic products. This finding is acutely relevant to the urgent debate over plastics, and also to investors concerned about the financial material impact on companies of litigation, regulatory and reputational risks.
About ChemScore
ChemScore is the independent ranking of companies producing hazardous chemicals and their efforts to transition to safer alternatives. Each year since 2020 it has ranked the largest 50 publicly-owned global chemicals corporations, based on a fully transparent methodology.
Production of hazardous chemicals increases corporate exposure to regulation, litigation and shifting consumer sentiment, making ChemScore an authoritative guide to medium and long-term investor risks and opportunities stemming from these threats. Company report cards include a detailed report which benchmarks numerous factors. ChemScore is updated in the last quarter of every year. This is the fifth annual update.