To achieve the goals of the Paris Agreement, the role of the chemical industry cannot be ignored. CDP, the world's largest environmental data platform, released a new report this month, "Catalyst for Change," analyzing the performance of the world's 22 largest chemical companies in their "low-carbon response strategies." The report points out that process improvements in the chemical industry are generally not transparent enough, with insufficient information disclosure. High-polluting processes such as those for petrochemical products still require more proactive innovation to have a chance of meeting the Paris Agreement's 2°C target. The chemical industry is a major energy consumer, accounting for one-eighth of global industrial carbon emissions, and is an indispensable link in the supply chains of other industries; for example, nearly 95% of industrial products rely on some form of chemicals. The "Catalyst for Change" report analyzed the carbon emissions of the world's 22 largest chemical companies, with a total market capitalization of $626 billion and annual carbon dioxide emissions reaching 276 million tons. In terms of performance rankings, Johnson Matthey, AkzoNobel, and DSM were among the best performers; Dow Chemical and LyondellBasell Industries were among the worst performers, with Formosa Plastics ranking last. The report, based on recommendations from the Mark Carney Climate-Related Financial Risk Disclosure Working Group (TCFD), assessed chemical companies using four key indicators: – Transition Risk: Energy intensity, emissions intensity, Category 3 emissions; – Substantive Risk: Water consumption; – Transition Opportunities: Eco-innovation in products and processes, low-carbon related benefits, R&D spending, renewable energy usage; – Climate Governance and Strategies: Reduction targets, reduction actions, etc. As the TCFD framework becomes mainstream, more and more investors expect chemical companies to explain how they are adjusting their business models to manage entity and transition risks while seizing opportunities to profit from the global low-carbon economic transition. However, Formosa Plastics received either a D or E rating in all four categories. A new report shows that the chemical industry has made significant progress in low-carbon technologies, providing climate-friendly solutions at the product level, such as electric vehicle batteries, and profiting from this low-carbon transition. These products generate nearly $83 billion in revenue, accounting for 20% of total revenue. The chemical industry's carbon emissions and energy efficiency are also improving, growing by 2-5% annually, directly impacting profitability. However, its highly polluting processes, such as petrochemical products, still require more aggressive innovation to have a chance of meeting the Paris Agreement's 2°C target. Carole Ferguson, Director of Investor Research at CDP, said, "Our research shows that process improvements in the chemical industry are generally not transparent enough, and information disclosure is insufficient. High transparency and concrete low-carbon commitments will be indicators of future industry leaders. This year, AkzoNobel stood out from 22 companies for its commitment to decarbonization measures and being one of only two companies to set carbon reduction targets using a scientific approach. However, long-term investors will increasingly demand that chemical companies adjust their business strategies in line with more aggressive emissions reduction targets and the rise of global carbon pricing schemes." The full Catalyst for Change report is attached: CDP_Chemicals_2017.pdf. Source: Environmental Information Center (2017-10-27) Attachment: CDP_Chemicals_2017.pdf
