Study assesses chemical majors’ sustainable performances

24 February 2010 17:49  [Source: ICIS news]

LONDON (ICIS news)--Air Liquide and BASF used their resources up to five times more efficiently than their competitors in 2007, according to the findings of a study, but AkzoNobel and Dow Chemical took issue with the study's conclusions, the companies said on Wednesday.

The research, carried out by Queen’s University Management School in Belfast, calculated a monetary assessment of corporate sustainability performance for nine global chemical companies, which took into account financial, environmental and social resources.

“Sustainable value is created when a company uses its resources more efficiently than the market average,” said Frank Figge of the management school.

The research considered the companies’ performances from 2004-2007 based on 13 financial, environmental and social factors.

These included total assets, water use, chemical oxygen demand of waste water, hazardous waste creation, emissions of greenhouse gases and volatile organic compounds, and acidification potential.

The study found that in 2007, Air Liquide and BASF created around €1bn ($1.35bn) more cash flow than their competitors would have with the same amount of resources.

BASF provided financial support for the study. The management school said that at no time did BASF have any influence on the content or findings of the study.

“Companies have highly developed tools to measure their use of the resource economic capital. The sustainable value approach now allows them to measure the use of their environmental and social resources in economic terms,” said Figge.

US major Dow Chemical was bottom in the rankings, using its resources only half as efficiently as its competitors on average in 2007. As a result, it created a negative sustainable value of €-2.2bn ($3bn).

Netherlands-based DSM and AkzoNobel were also unable to generate positive sustainable values in the years assessed.

“Our study shows in which areas the companies outperform compared to their peers and where they are lagging behind,” said Figge.

The other companies analysed in the study were Bayer, DuPont, Reliance Industries and Shell Chemicals.

“Difficult times especially show that companies which conduct their businesses sustainably and responsibly are more successful in the long term. That’s why sustainability is a firm part of BASF’s strategy,” said Eckhard Koch, director of BASF’s sustainability centre.

Dow said it disagreed with the characterisation of sustainable value in the report.

“It falls short of accurately and completely assessing the sustainability of a company, especially with regard to cash flow alone as a measure of return, and the benchmarks used,” said Dow spokeswoman Sue Breach.

“While no measuring system is perfect, this one falls well short of the standards to which we hold ourselves,” she added.

Oskar Bosson, manager of communications sustainability at AkzoNobel, said: “We continuously monitor publications…to see if and how we can improve our sustainability efforts. However, comparing different rankings is like comparing apples to pears.”

“We believe that it’s important to look at a company’s total value chain, since no company’s operations are isolated from the rest of the world,” said Bosson.

Download the full study here.

For more on BASF, Dow and other producers, visit ICIS company intelligence
Bookmark Doris de Guzman’s Green Chemicals blog for views on sustainability issues
To discuss issues facing the chemical industry go to
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By: Andy Brice
+44 20 8652 3214

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