Sustainability in the Chemical Industry
Chemical companies manufacture a range of products, including commodity and specialty chemicals, which are the building blocks for goods in the construction, textiles, consumer goods, paper, petroleum, and metals industries. Transforming chemicals into useful products is often extremely energy and carbon intensive, and dependent on petroleum-based feedstocks. Opportunities to reduce costs along with decades of government regulation and stakeholder pressure have pushed chemical companies to reduce energy use and waste in their operations, and to engage with external stakeholders, including policymakers, NGOs, and communities.
Sustainability Drivers
For chemical companies, future success will depend on how well they respond to a tougher set of regulatory, operational, and competitive requirements. As the EU implements REACH (Registration, Evaluation, Authorisation and Restriction of Chemicals) and the U.S. continues to evolve its own regulations, companies will need to meet the new standards quickly and transparently. With potential carbon regulations, chemical companies will also need to continue to become more efficient and develop cleaner manufacturing and distribution methods. In addition to carbon, companies will need to grapple with increasingly limited water resources.
Importantly, companies that lead on sustainability will be those that think beyond reducing their operational environmental impacts to create products that are well-positioned for a carbon- and water-constrained world. The goal is to meet growing demand for products that are produced with fewer resources, while helping consumers and customers reduce their own footprints.
Challenges and Opportunities
To rise to the next level of sustainability leadership, companies need to understand and plan for both short-term and long-term business opportunities. To take advantage of these opportunities, companies should ask important questions:
- After we have addressed the most obvious eco-efficiency opportunities, how do we continue to improve our performance, especially with regard to energy, water, and waste?
- How do we anticipate and plan for new regulations around climate change, chemicals, waste, and water?
- How do we encourage innovation and develop the next wave of sustainable products and services?
- How can we communicate our products’ environmental attributes in ways that resonate with customers and consumers?
Viridis has worked closely with leading companies to navigate these and other issues.
Case Study
One of the world’s largest and most innovative manufacturers of chemical, plastic and agricultural products approached Viridis to help the company assess their sustainability performance relative to competitors. The company had long been a sustainability leader in the chemical sector, but others were ramping up their efforts, especially in sustainable products and services. As a major energy user with a large carbon footprint, the company was engaged in climate change and energy processes, but sought an external perspective on evolving regulations, changing policies and how competitors were responding.
Viridis completed an analysis and benchmarking of the company’s sustainability practices and competitive position, which provided insight into opportunities to execute more effectively on sustainability, focusing the company on potential market and communications opportunities. Separately, Viridis provided a competitive analysis of the company’s carbon and climate change management efforts and helped to refine the company’s approach to emerging climate change and energy policies, which was critical to their ongoing leadership in the chemicals industry.