The important role of chemical industry
The role of the chemical industry in the production of all goods and the provision of services is undoubtedly crucial. Chemicals are essential ingredients in many industries, from health, sanitation, construction and transportation to agriculture and energy supply. This makes the industry one of the largest in the world.
Therefore, the chemical industry plays an important role in maintaining growth and prosperity and in the transition to a sustainable society. With the increasing competition around the world, innovation is still crucial in finding new ways to meet increasingly mature, demanding and environmentally conscious consumers.
Ten challenges of sustainable development
By evaluating the reports of the top 10 companies in the chemical industry, we identified the 10 most important sustainability related themes / challenges facing the industry:
Sustainable products (materials)
Carbon dioxide emissions
Occupational health and safety
Human rights assessment
Water and wastewater
Customer health and safety
Wastewater and waste
The main challenges facing the industry are the first and third, energy management and carbon dioxide emissions. High energy use in the industry leads to high investment requirements for fossil fuels and key components of hydrocarbons in power production. Greenhouse gas emissions come from the use of fossil fuels, flue gas emissions and gas burning practices. In terms of procurement, these products have a large emission factor, which means that the goods and services purchased will occupy an important position in the carbon footprint. For the remaining eight challenges, see the full report.
In addition, if you are interested in scope 3 management and supply chain opportunities, why not read “enterprise greenhouse gas emission action”?
Using supply chain and reporting standards to meet the challenges of sustainable development
In order to meet the challenges of sustainable development, supply chain or report driven standards are usually adopted.
In the context of supply chain driven standards, suppliers are required to disclose their human rights considerations, labor standards, compliance systems, environmental participation and carbon dioxide emissions through third-party solutions. The most relevant are ecovadis and CDP.
The report driven standard is based on the report standard, which is most suitable for finding the position of a company compared with its competitors, measuring the effectiveness of its management, and understanding the attitude of stakeholders towards it. Providing information on achievements in the field of sustainable development increases transparency, thereby enhancing the confidence of stakeholders in the company. A report is also highly recommended because investors are increasingly making investment decisions based on ESG standards.
The most popular reporting standards include the United Nations Global Compact and the global reporting initiative standards. The former is also suitable for beginners of sustainable development, while the latter requires more time and reports as well as professional knowledge of sustainable development.
To learn more about the challenges of the chemical industry, please refer to dfge’s white paper on the chemical industry. To learn how to solve the problem of carbon dioxide emissions in the supply chain, please refer to the latest report of ecovadis analysts.