Chemicals constitute fundamental building blocks of most consumer and industrial products and are virtually ubiquitous. Their manufacturing is very resource- and energy-intensive and relies on a steady stream of input materials, to a large degree still fossil fuels. Pollution risks, health and safety hazards and environmental concerns are rife along the entire value chain.
IntegrityNext helps you manage the key sustainability risks and opportunities in your supply chain with minimal effort. Our solutions cover the topics most material to your industry and allow you to meet due diligence requirements and boost your sustainability performance:
reduction efforts and
SBTi engagement targets
RoHS and REACH
Occupational health and safety
health and safety risks
Risks and Opportunities
Chemicals production requires huge volumes of raw materials, particularly oil. Other feedstocks include natural gas, metals and minerals, salts and water. To a minor extent, alternative resources such as palm oil, vegetable oils, animal fats, starch, maize or waste are harnessed. The extraction and further processing of fossil fuels, metals and critical minerals has been linked to incidents of pollution and human rights violations which need to be managed accordingly. Documented cases comprise forced resettlements, disregard for the rights of indigenous people or undue exposure to hazardous substances affecting workers and local communities alike.
Health and safety concerns, and by extension environmental risks, cascade through the entire chemicals value chain, from raw material extraction to final disposal. The phase-out of harmful substances is therefore a main priority for the sector and has the added benefit of preventing several of the afore-mentioned detrimental impacts. The transition is markedly driven by heightened regulatory scrutiny in many jurisdictions. In 2020, the European Union adopted its Chemicals Strategy for Sustainability which outlines a roadmap for a toxic-free environment. It encompasses the ban of the most harmful substances in consumer products, the elimination of most PFAS, a revision of REACH and an increased focus on chemical mixture toxicity, among other measures.
Since chemical companies assume a linchpin role in the upstream value chains of many other industries, they can become critical enablers and multipliers of sustainable development. The shift from fossil fuel-derived, carbon-intensive chemicals to renewable feedstock-based manufacturing represents one of the sector’s key challenges. Product innovation can help companies tap into new markets, support the development of environmentally-friendly technologies, garner interest from sustainability-minded customers and forestall regulatory pressures. Still, a change of tack needs to be mindful of concomitant risks. In terms of renewable feedstock procurement they can relate to poor working conditions in agriculture and forestry, large-scale deforestation or the degradation of biodiversity. The sourcing of biomass in particular, ideally second or third generation, must occur in a responsible manner and pay heed to a range of environmental concerns. Adequate due diligence procedures are thus indispensable to prevent adverse supply chain impacts.
Continued over-reliance on fossil fuel-based feedstocks
High resource- and energy-intensity of chemicals manufacturing
Health and safety risks along the value chain
Great potential as enabler of sustainable development in other industries
Sustainable product innovation as a major business opportunity
IntegrityNext provides a platform for comprehensive ESG supply chain risk management that allows you to meet due diligence requirements and improve your sustainability performance:
- Carry out a carbon footprint assessment and benefit from enhanced visibility into your suppliers’ emissions, reduction efforts and targets.
- Analyse the most relevant environmental, social and governance risks as part of a five-step risk management process.
It includes an abstract country and industry risk analysis to deliver initial insights into your supply chain’s risk exposure. Based on more detailed pre-built assessments, which draw on authoritative international standards and conventions, you can monitor your suppliers with respect to the main ESG risks:
Carbon footprint: collection of emissions data, monitoring of reduction efforts and SBTi engagement targets (Science Based Targets initiative)
Compliance with the European RoHS directive on hazardous substances and REACH
Occupational health and safety
Adherence to universally accepted human and labour rights
We help you identify suppliers with the most severe impacts so that you can develop a coherent strategy and target your preventive and remedial measures accordingly. The results gleaned from the assessments are synthesised in a GRI-certified report that can be readily used for your disclosures.
Top speed sustainability screening of a 20,000 strong supplier base
"Our focus on sustainability makes us win new business. IntegrityNext gives us the necessary transparency about sustainability in our supply chain."
To effectively manage the risks associated with raw materials, Clariant needed to expand their supply chain risk management to include sustainability factors but struggled to engage with a very large supplier base.
The goal was to find a solution that could help them effectively obtain supplier sustainability data in a standardized way and integrate into their existing tools.
How IntegrityNext helps
Clariant uses IntegrityNext to deploy a standard assessment process to screen suppliers in all relevant sustainability and product compliance areas, increasing transparency on supply chain sustainability performance significantly.
The IntegrityNext data feeds seamlessly into Clariant’s risk management system, where sustainability risks can then be viewed as part of the holistic risk analysis and the team can take follow-up measures.