AkzoNobel, the Dutch specialty chemicals maker, earns the top spot among 22 firms in a ranking issued in October by CDP (formerly the Carbon Disclosure Project), London, on chemical companies’ readiness for a low carbon transition. The rankings, which appear in CDP’s “Catalyst for Change” report, put two petrochemical producers in the bottom spots: U.S.-based LyondellBassell and Taiwan’s Formosa Plastics.
The companies assessed include major specialty, petrochemical and diversified chemical makers and industrial gas producers. The U.S. firms are Air Products, Dow, DuPont, PPG and Praxair as well as LyondellBassell — with a combined rating also provided for DowDuPont. The European companies include Air Liquide, BASF, DSM, Evonik, Johnson Matthey, Linde, Solvay and Umicore as well as AkzoNobel. LG Chem, Mitsubishi Chemical, Shin-Etsu, Sumitomo Chemical and Toray, along with Formosa Plastics, represent Asia. Brazil’s Braskem rounds out the roster.
These 22 firms account for about 25% of the greenhouse gas emissions of the global chemical industry, says CDP. However, it notes the report has some significant omissions — namely, Chinese chemical makers as well as the petrochemical businesses of oil and gas companies.
The rankings reflect the CDP’s evaluation of performance in four key areas:
• transition risks, which include factors such as the company’s own emission and energy intensities, as well as indirect “Scope 3” emissions;
• physical risks, which encompass water withdrawal and use, water quality and governance metrics;
• transition opportunities, which reflect product and process innovations, R&D spending, use of renewable resources, etc.; and
• climate governance and strategy, which cover emissions reductions targets and how governance and remuneration align with low carbon objectives.
AkzoNobel outperformed all other companies by a clear margin across most metrics, says CDP.
The 74-page report provides details on the metrics used and key background information as well as specifics on each company’s performance. A chart shows the position of each company in terms of opportunities versus risks for low carbon transition.
The report cautions that the chemical industry overall faces “high carbon” risks in the medium to long term that will require game-changing technologies for feedstocks and processing.
However, it gives the chemical industry good marks compared to other sectors in several areas. The report cites improvements of 2–5%/y in emissions and energy efficiency and foresees further incremental efficiency improvements. It calls the industry innovative, with potential to develop new products and processes that can generate revenue while helping customers transition to a low carbon economy. Moreover, the report notes that R&D spending as a percentage of sales is about five times higher than that in other industrial sectors, so the chemical industry is positioned to capitalize on revenue streams from low carbon technologies.
CDP conducts research on behalf of investors, so they can assess and possibly influence the actions of companies. It evaluates the performance of firms in diverse industrial sectors in addressing climate-change and water challenges. For instance, a CDP report issued this summer cited fossil-fuel producers as the main culprits for greenhouse gas emissions. (See: “Report Says 100 Firms Cause the Most Emissions.”)
MARK ROSENZWEIG is Chemical Processing's Editor in Chief. You can email him at email@example.com.