How Chemical Companies are Embracing Sustainability

Chemical companies support many goods-producing industries, including pharmaceuticals, food and drink, electronics, construction, automotive, and more. With an estimated worth of $5.7 trillion, the chemical industry is an important component of the global economy. With a growing shift towards environmental accountability, the industry will need to find ways to embrace sustainability—something many in the sector are already taking steps towards.

But why should sustainability strategies be important to chemical companies, and how are organisations in the chemical industry adopting sustainable practices? These are two significant questions we’ll answer in this blog.  

In this blog, we’ll explore the following:

• Why is sustainability important to chemical companies?
• How companies are embracing chemical sustainability

Why is Sustainability Important to Chemical Companies?

Companies in the chemical industry are increasingly conscious of the importance of sustainability due to the pressures of stakeholders, strategic benefits, and more. As a result of these factors, more chemical companies are adopting sustainable practices in their daily operations. Below is a list of the key factors surrounding the importance of efficiency and sustainability in the energy and chemical industries.

Meeting Stakeholder Expectations

Today, people are more concerned about sustainability and are drawn to businesses whose operations are environmentally conscious. As a result, chemical companies are facing increased pressure from various stakeholders across their value chain to demonstrate how their operations are sustainable. 

Stakeholders such as investors, regulators, consumers, and employees expect organisations in the chemical industry to outline their sustainability goals and a plan for achieving them. Therefore, chemical companies must evaluate their sustainability strategy to highlight their commitment to environmentally friendly practices, keeping their stakeholders happy and meeting their expectations. Doing so can go a long way to attracting and retaining stakeholders.

Financial Incentives

Another reason organisations in the chemical industry are gaining an increased understanding of sustainability's importance is the associated financial incentives. As reported by McKinsey, chemical companies that prioritise sustainable practices and improve their Environmental, Social, and Governance (ESG) ratings are more likely to receive capital markets. Therefore, it makes sense for chemical companies to put their sustainability strategy at the forefront to be rewarded financially. 

Regulatory Compliance and Industry Innovation

Environmental regulations are becoming more prevalent in the chemical industry, with bans on the use of hazardous substances and single-use plastics. Complying with these environmental regulations requires chemical companies to find new operating methods. 

By utilising alternative materials and developing new economically valuable and environmentally conscious processes, businesses in the chemical space can begin to embrace sustainability. Chemical companies are leaning on innovative technologies, including chemical recycling and green fuels, to meet their sustainability strategy and objectives whilst complying with industry regulations and global climate goals. 

Adopting a sustainability strategy helps keep chemical companies ahead of the competition. It offers the opportunity to reap the rewards of financial incentives and compliance with regulatory standards through innovative technologies. 

Embracing the importance of sustainability can make chemical companies more profitable and environmentally conscious in the eyes of stakeholders such as investors and business partners. Similarly, talent looking for chemical jobs will be more attracted to businesses that use innovative technologies and remain conscious of sustainability. Ultimately, this drives an organisation's customer and talent acquisition goals.

How Companies Are Embracing Chemical Sustainability

Chemical companies are adapting their entire business processes to government regulatory changes, climate action targets, changes in supply chains and costs, and wider customer perceptions. From research, production, and logistics to procurement, management, data, and business processes, the most innovative companies are embracing comprehensive sustainability strategies.

Technology Making Chemical Companies Sustainable

Chemical companies are embracing sustainability with the assistance of innovative technologies. One type of tech is Enterprise Resource Planning (ERP) systems. ERP systems combine a range of business functions into a singular platform to provide real-time analysis of a brand's operations and environmental metrics.

An ERP system can track the energy and waste produced by organisations within the chemical industry. By collaborating this data, chemical companies can gain a more comprehensive understanding of their level of sustainability and environmental footprint. With this information and analysis, businesses can identify aspects of their processes that can be improved and more aligned with the overarching chemical sustainability strategy.

Emerging technologies, like ERP systems, can help chemical companies optimise their processes to reduce waste generation and resource consumption. Even if these operational efficiency improvements are minimal, reducing energy production and using raw materials could significantly benefit a business's sustainability strategy and environmental goals, such as reaching net zero targets.

In addition to offering deeper analysis, digital technologies such as chemical manufacturing software can help automate operations for chemical companies. Automating operations for products and processes can help those within the chemical industry minimise the amount of waste they generate and use energy more efficiently. These digital tools can provide insight into various aspects of a product's lifecycle to find eco-friendly improvements and opportunities for automation. 

Ultimately, by turning to emerging technologies and digital solutions, chemical companies can strengthen their efficiencies while simultaneously achieving their sustainability strategy objectives in the chemical industry.

The Growth of Circular Economy in the Chemical Industry

Another way chemical companies are embracing sustainability strategies is by supporting the circular economy concept. The circular economy has become a buzzword in the chemical industry and is a model focused on recycling resources in various manufacturing processes. As these processes contribute to releasing greenhouse gases, turning to the circular economy and repurposing products can reduce the impact of emissions and support the embrace of sustainability.

The growth of the circular economy involves a shift from discarding raw materials after they’ve been used. Instead, chemical companies will reuse the resources to maximise their usage while reducing waste generation. A circular economy focuses on resource efficiency by mitigating waste generation and harnessing recycling. This method aims to reduce the usage of raw materials to create a more positive environmental impact. 

Additionally, some chemical companies have adopted closed-loop systems. In these systems, waste from one production process is used as the raw material in another production process. Taking this approach allows businesses in the chemical industry to reduce their energy consumption and waste while conserving their resources for optimal use.

The circular economy model continues to gain global traction as governments seek solutions that enable chemical companies to adopt sustainability strategies. Schemes like the EU Taxonomy and Circular Economy Action Plan aim to promote a circular economy. President Biden’s Inflation Reduction Act in the US also incentivises organisations to adopt more circular and sustainable practices. 

By embracing circular economy practices, those within the chemical industry can take steps towards reducing their environmental footprint while simultaneously developing innovative processes to repurpose the raw materials used in their processes. Overall, the circular economy shifts from traditional models to practices that allow for more eco-friendly operations and sustainability strategies. 

Renewable Energy Can Enhance the Chemical Industry

According to the IEA, the chemical industry is the largest consumer of energy and the third-leading subsector in producing direct carbon dioxide emissions. Chemical companies are increasingly seeking ways to lower their energy consumption or find sustainable energy sources without harming the planet. One solution to combat its environmental impact is that of renewable energy.  

Chemical companies can reduce their reliance on fossil fuels by harnessing renewable energy sources such as solar and wind. This approach can also reduce the emissions they produce from their processes that rely heavily on traditional energy sources. The shift to renewables can align organisations in the chemical industry with global climate and net zero efforts. 

Investment is also being made in the development of biofuels as energy alternatives. For example, chemists are looking at creating green diesel from plant-based materials, biodiesel from animal fats and plant oils, and ethanol from sugarcane and corn. These innovations in green chemistry and renewable energy can power manufacturing processes within the chemical industry.

Embracing these biofuels and renewable energy in the chemical industry also supports the circular economy approach by repurposing resources and mitigating waste. These biofuels, produced through replenishable materials, are becoming a major contributor to supporting sustainability strategies in the chemical space.

Integrating sources of renewable energy into the chemical industry will continue to evolve. This will especially be the case as companies realise the importance of embracing a sustainability strategy and supporting the energy transition. Renewables will be pivotal for promoting sustainability in the chemical sector and will continue to drive innovation to help the industry adopt greener and energy-efficient practices. 

Final Thoughts on Sustainability in the Chemical Industry

Various factors, including stakeholder expectations, financial incentives, regulatory compliance, and industry innovation, drive the chemical industry's embrace of sustainability. By prioritising sustainability, chemical companies can meet stakeholder demands and regulatory standards, unlock financial rewards, and build on innovation by adopting emerging technologies like ERP systems and the circular economy model.

Integrating renewable energy sources highlights the chemical industry's commitment to reducing carbon emissions and advancing towards global climate goals. As chemical companies continue to evolve their sustainability strategies, they position themselves for long-term success and a positive environmental impact.

Looking to Embrace Sustainability in the Chemical Industry?

If you’re searching for the market’s best talent for your vacant chemical jobs and want to empower sustainability in your business, we can help. With over 20 years of experience connecting the world’s leading chemical companies with sought-after professionals, our diverse talent acquisition services can help you find the people you need to embrace sustainability in the chemical industry.

Contact us today and discover how we support chemical companies with permanent and contract recruitment needs.