Sustainability is not a new discovery in the chemical industry – its “responsible care” initiative was established in 1985. For decades, companies in the chemical industry have been dealing with safety, risk management and environmental and health impacts due to increasingly stringent regulations and increased public awareness.
So what changed? The chemical industry plays a vital role in addressing major social challenges such as climate change, global food shortages or how we deal with plastic waste. Expectations for chemical companies are high: in addition to improving their footprint, they should also promote sustainable solutions and innovation strategies in each customer industry they serve. After all, many innovations – from introducing new concepts of mobility, over affordable housing to ensuring an adequate food supply for the world’s population – have been realized by new materials and processes in the chemical industry.
However, to seize opportunities in this new area, we need to move from a passive, compliance driven approach to creating and capturing value in a sustainable way. Our industry experts at strategy & PwC can help you achieve this.
Chemical ecosystems and industry discussions on sustainability are widely influenced by three aspects, which need answers:
Regulations: in order to comply with more stringent regulations recently issued, such as the EU’s gradual ban on disposable plastic bottles and the management of potentially harmful substances, investment in innovative alternative materials and processes is needed.
Technology: new technologies emerge rapidly. Biotechnology or chemical dissolution for recycling or renewable raw materials for production are just a few main examples. If these companies want to succeed, they need scalability and competitive pricing.
Ecosystem: the existing value chain is being reconfigured, and new participants enter the ecosystem, such as recyclers, preprocessors or technology start-ups. Established companies will have to reassess themselves and may reposition themselves.
Chemical companies that actively participate in the debate on sustainable development and the chemical industry 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 endangering their business licenses.
Seize opportunities and create positive value
The chemical industry is in a unique position to solve countless sustainability problems from two perspectives: focusing on its own footprint and being a “facilitator” of the downstream value chain.
Although many companies have (more or less) clearly defined long-term goals, how to achieve them often remains to be seen.
How clear are our ambitions and future roles? How is this implemented into our strategy? Does our organization accurately understand what this means?
What practical measures are there to achieve these goals? How do we create transparency and measure progress?
How well do we understand the impact of our chemical products, processes and solutions on customer value creation? Are we close enough to our partners and markets?
How can we change from the traditional asset-backed management method to a new form of value creation and monetization? What are the value drivers behind the new business model or circular economy?
