Two years have passed since hazardous chemicals were given much-needed attention and closer scrutiny in the Dow Jones Sustainability Index (DJSI).
That’s when RobecoSAM, the research institute that conducts the background work for the DJSI, rephrased the “chemical question” in the product stewardship category of the questionnaire (there are nine categories in total).
The question went from the very generic: “[what’s your] commitment to lowering product toxicity through elimination of known or suspected high priority toxicants or substitution with safer alternatives?”
to the more quantifiable: “What percent of your products contain the following hazardous substances at a concentration above 0.1% by weight?”
RobecoSAM defines a hazardous substance in accordance with international conventions such as the Montreal Protocol, the Stockholm and Rotterdam Conventions, as well as regional legislation such as REACH, RoHS and California Prop. 65.
But as most readers already know – regulatory compliance does not automatically mean your company is sustainable. There are still many, well-known toxic substances in widespread use that are legally OK to use.
To cover this discrepancy between legal compliance and actual safe chemistry the questionnaire also includes lists that aim to predict future legislation, like UNEP’s list of endocrine-disrupting chemicals and, of course, ChemSec’s SIN List.
“The big change here is that it’s no longer possible for companies to hide behind a general statement; instead they have to provide hard numbers”
Another thing worth noting is that the chemical part of the questionnaire applies to 19 sectors: chemicals, of course, but also to textiles, household products, electronics and so forth.
So what has happened since then? Has the “new” DJSI, which puts greater emphasis on toxic chemicals, had any actual effect?
Well, the big change here is that it’s no longer possible for companies to hide behind a general statement; instead they have to provide hard numbers.
A couple of weeks ago the 2018 rankings were released. And while the top scorers are there for everyone to see, their answers to the questionnaire are unfortunately not.
However, among the leaders this year we find companies that we know are very chemically progressive.
The top company in the textile sector for example, adidas group, is a ChemSec Business Group member with a high score in the product stewardship category (98 out of 100). Adidas group’s total score in all categories ranges between 75 and 100.
“A majority of the corporate people I’ve spoken to agree this is a good thing, as it reflects the industry leaders in a more truthful way than before”
Chemical company DSM is the leader in the chemical industry, with scores ranging from 80 to 90. DSM is not the top scorer in the product stewardship category though. But since the top scorer in this category did not make it into the overall top rank, we do not know which company it is.
In the chemical industry sector, it is also worth noting that BASF, Bayer and Henkel are out of this year’s top spots and are no longer featured on the DJSI.
This is pure speculation from me, but it is possible that the expanded focus on toxic chemicals in the product stewardship category, such as SIN List chemicals, has played a potentially significant role here. After all, these companies all produce many SIN chemicals: 91 for BASF, 21 for Bayer and 21 for Henkel, to be precise. At the very least, this fact has no doubt affected their score in the product stewardship category.
Additional evidence of DJSI’s importance in creating corporate awareness around chemicals, although anecdotal, comes from the various corporate voices we have heard over the last two years, talking about the rephrased “chemical question” and the SIN List in the questionnaire, and how it has forced companies to look at product data in a more detailed way.
A majority of the corporate people I’ve spoken to agree this is a good thing, as it reflects the industry leaders in a more truthful way than before.
The growing interest of investors in sustainable chemicals management is therefore a very positive thing, as institutional investors are powerful stakeholders with a mandate to make real change happen.
Sonja Haider
Senior Business and Investors Advisor
