Strategic Approaches to Environmental Sustainability

Updated: Oct 20, 2020

While it's been discussed, deliberated and pursued to some degree for years, sustainability has become a critical topic for companies across the chemical value chain and elsewhere. For publicly-held companies especially, having an ESG (environmental, sustainability and governance) strategy and metric is critical. For all companies, private and public, having an answer or approach to sustainability is forming part of its perceived license-to-operate.

The drive to sustainability and producing a renewable, sustainable or “green” product is critical for chemical companies, who are often at the front-end of the value chain, and whose products ultimately reach individual consumers as they flow through the value-chain into consumer products.




There are three primarily strategies or archetypes that chemical companies are pursuing as they focus on sustainability.

The first is a feedstock-focused strategy. With this approach, companies are focused on creating sustainability in their supply chains, often with a focus on biobased and renewable feedstocks. We see this in a number of ways. In surfactants, there is a large focus on bio-surfactants, with a plethora of companies invested in bio-based and renewable surfactants.

We are also seeing a focus on renewables in polymer space with a focus on renewables. For years, Braskem has been marketing “Green PE”, a polyethylene made from sugarcane ethanol.

And in 2020, Itochu, Borealis, and Bourouge announced a collaboration in Japan to bring renewable polypropylene into the market.

The second strategy that companies are pursuing is an operations-focused strategy. This is a more traditional strategy for many companies and it’s focused on reducing emissions and reducing energy consumption amongst a number of other avenues that they pursue. For years, chemical companies have put significant investment into reduced emissions and operational efficiency, with tremendous results. The focus on reduced carbon dioxide (CO2) emissions is strengthening. Recently, Air Products announced it’s Third by ‘30 Initiative, in which they are pursuing 33% reduction of CO2 emissions by 2030. We see Air Products doing this and a number of other companies following suit.

The third strategy that chemical companies are pursuing is an end-use market strategy, and this is a strategy particularly pursued by polymers companies with a real focus on recycling and the circular economy and bringing those molecules back into the value chain. Significant investment dollars and resources are going into solutions to support the circular economy.

In January 2019, a number of plastics companies came together to form the Alliance to End Plastic Waste -- jointing working together for find solutions. Those same companies are also individually focusing resources to develop solutions. In the past month, LyondellBasell announced in their sustainability report that by 2030 they’ll be bringing 2 million tons of polymer into the market that’s based on recycled and renewable material; and, Chevron Phillips Chemical announced its first commercial-scale production of polyethylene using advanced recycling technology.

As you can see, these are three strategy archetypes that we see chemical companies pursuing with success, either alone or in combination with others: Feedstock-focused. Operations-focused and End-use Market strategies.

Does your company have a strategy or approach to Sustainability? If you’re wondering what the best approach is for your business, set up a free strategy consultation where we can discuss your individual drivers and sustainability needs.

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