Sustainability Of Chemical Suppliers

Sustainability is not a new discovery in the chemical industry – the company’s responsible care initiative was established in 1985. For decades, chemical suppliers have been dealing with issues such as safety, risk management, environmental and health impacts due to increasingly stringent regulations and public awareness.

So what has changed? The chemical industry plays a crucial role in addressing major social challenges such as climate change, global food shortages, or how we deal with plastic waste. There are high expectations for chemical suppliers: in addition to improving their footprint, they should promote sustainable solutions and innovation strategies in every customer industry they serve. After all, many of the innovations – from introducing new mobile concepts to providing affordable housing to ensuring an adequate food supply for the world’s population – are driven by new materials and processes in the chemical industry.

However, to seize opportunities in this new field, we need to shift from a passive, compliance driven approach to creating and capturing value in a sustainable way. Our industry experts at strategy & and PwC can help you achieve this.

The discussion on sustainable development of chemical ecosystems and industries is largely determined by the following three aspects:

Regulations: in order to comply with the more stringent regulations recently issued, such as the EU’s gradual ban on disposable plastic bottles and regulations on the management of potentially hazardous substances, it is necessary to invest in innovative alternative materials and processes.

Technology: new technologies are emerging very quickly. Biotechnology or chemical decomposition of renewable raw materials for recycling or production are just a few major examples. If these projects are to succeed, they must be scalable and competitively priced.

Ecosystem: the existing value chain is being reconfigured, with new players entering the ecosystem, such as recyclers, preprocessors or technology start-ups. Established companies will have to reassess themselves and may reposition themselves.

Chemical suppliers who actively participate in sustainable development and chemical industry debates and find solutions to these problems have a clear advantage: they can actively take advantage of growth opportunities rather than just respond to developments to avoid jeopardizing their business licenses.

Seize the opportunity to create positive value

The chemical industry is in a unique position in solving various sustainable development problems from two perspectives: focusing on its own footprints and acting as the “promoter” of the downstream value chain.

While many companies (more or less) have clear long-term goals, how to achieve them remains to be seen.

How clearly are our aspirations and future roles defined? How is this implemented into our strategy? Does our organization accurately understand what this means?

What are the specific measures to implement these goals? How do we create transparency and measure progress?

How much impact do we have on customer value creation through our chemical products, processes and solutions? Are we close enough to our partners and markets?

How can we change from traditional asset-backed management to a new form of value creation and monetization? What are the value drivers behind the new business model or circular economy?

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