International environmental NGO ChemSec today launched ChemScore, a new corporate benchmarking tool, measuring and comparing the sustainability of the product portfolios of the chemical companies. ChemSec developed the tool to provide investors and other stakeholders with key information about the production and use of chemicals that may often be hazardous to human health and the environment, information the NGO believes these stakeholders may be lacking.
ChemScore’s aim is to capture and rank the world’s largest chemical companies’ efforts to reduce their production of hazardous chemicals, and to boost investments in safer, greener alternatives.
Explaining the need to get better information is stakeholders’ hands, Anne-Sofie Bäckar, Executive Director at ChemSec, said:
“For investors, a better understanding of companies’ involvement in hazardous chemical production is crucial. Many of these chemicals not only pose a threat to human health and the environment, they also threaten the return of an investment.”
ChemSec pointed to persistent chemicals, such as PFAS as an example. PFAS are a group of chemicals that have been in use in a wide range of consumer and industrial products since the 1940s. They are commonly found in food packaging, fabrics, kitchenware products, fire-fighting foam, and electronics, among other products. The chemicals tend to be very persistent, don’t break down over time, and have been found to accumulate in the human body and in the environment. It is believed that PFAS can have cause adverse health effects in humans, including low birth weights, cancers, thyroid hormone disruption as well as affecting the immune system.
Several companies have stepped up their game lately on reducing use of hazardous chemicals, such as PFAS. DuPont, for example, recently announced the achievement of several milestones in its PFAS reduction efforts. However, significant work remains to be done.
Citing the impact company’s use of chemicals can have not only to human health and the environment, but also to their own businesses, Bäckar noted that many chemical companies’ have underperformed the market in recent years, commenting, “it’s not a coincidence that their stock prices have taken a nosedive compared to the industry average.”
ChemScore identifies the best and worst performers in the chemical industry, ranking the companies in 4 categories: Hazardous Product Portfolio, Development of Safer Chemicals, Management & Transparency, and Controversies.
In its first ranking of 35 of the largest stock-listed chemical companies, ChemScore identified Dutch chemical company DSM as the top performer. Commenting on the company’s achievement, Helen Mets, Executive Vice-President of DSM Materials said:
“I’m very proud that DSM has topped the ChemScore ranking. This resonates strongly with DSM Resins & Functional Materials’ ambition to phase out all chemicals of high concern from our finished products by 2025. This ranking reflects the importance of chemical safety as one of the many aspects of sustainability. Chemical safety is taken very seriously by our industry and this ranking encourages us to maintain our focus on this topic. Moving forward, we must work together to accelerate the sustainable transformation of our industry and create brighter lives for all!”
ChemSec developed ChemScore with input from the chemical industry, and in consultation with representatives of the investment community, including asset manager Aviva Investors. Eugenie Mathieu, Senior ESG Analyst with Aviva Investors, said:
“Understanding which companies are leading on sustainable management of chemicals, or lagging behind their peers, is a very important part of the larger sustainability puzzle and we are proud to take the lead in this issue within the investment community. ChemScore broadens our understanding of how companies are managing the risks involved in manufacturing chemicals. These include litigation, lack of preparation for new regulation and reputational risk. ChemScore also gives us valuable insight into how we can encourage companies to improve.”
For a complete list of rankings and grades from ChemScore, click here.