Chemicals are essential to daily life and are used in nearly all industrial processes. Chemical-based fertilizers help feed the world’s population. Catalysts and other speciality chemicals are essential to manufacturing life-saving drugs. Chemicals are used to make almost every consumer product, from cleaning solutions and clothing to automobiles and all things plastic.
Global chemical industry sales amount to approximately $4 trillion annually, providing essential materials for 95% of all manufactured goods worldwide. The chemical industry is also the largest industrial energy consumer and the third-largest industry subsector in terms of direct carbon dioxide emissions. The widespread impacts make it imperative that the chemical sector contributes to a nature-positive and net-zero future and operates within Earth’s safe and just system boundaries.
The nature-positive transition is synergistic with companies’ net-zero commitments. Nature-based solutions can contribute up to 37% of the emissions reductions required by 2030 to keep average global temperature increases below two degrees Celsius. Accordingly, chemical companies need solutions to address climate change and nature loss together.
By implementing five priority actions, the chemical sector can reduce its impact on nature and unlock $320 billion in annual business opportunities by 2030 in the emerging nature-positive economy
Five steps toward a nature-positive chemical industry
Increase manufacturing efficiency and expand the use of energy
This can be achieved via several avenues, including heat and energy efficiency gains through digitization or automation of manufacturing processes, heat recycling, or improved heat distribution.
The sector could also expand the use of renewable energy sources for power generation to reduce the depletion of natural resources and decrease its Scope 2 greenhouse gas emissions. Tackling climate change is a major lever to support the transition to a nature-positive future.
Improve water stewardship with sustainable water management strategies
This can be achieved by better overall freshwater management and usage optimization. Recycling water and introducing closed-loop systems in chemical plants can help with this optimization.
The sector should recognize the risks and possible consequences of decreased water availability or quality in supply chains and incorporate opportunities to replenish watersheds into corporate water management plans (especially in regions experiencing water stress).
Source responsibly and switch to sustainably sourced materials
Chemical companies should proactively assess the impacts and risks associated with each supplier, especially when sourcing raw materials. They should also engage with suppliers to make them aware of their impact on nature and climate and maximize their sustainability performance.
Lest they be left behind, companies should also look to become leaders in the sector by exploring alternative feedstocks to reduce corporate carbon and nature footprints. However, bio-based feedstocks carry their own set of risks that should be considered, so risk-based assessments and life-cycle analyses of bio-based products are needed to avoid or minimize trade-offs or unfortunate substitutions.
Support nature conservation and advocate for protective policies
Chemical companies need to work with organizations trying to conserve and restore nature within and beyond their value chains through nature-based solutions and/or ecosystem-based approaches. For example, they can develop green infrastructure such as wetlands. Depending on the chemical compounds produced and applicable regulatory restrictions, these can offer a natural and less expensive solution for the tertiary treatment of wastewater at chemical plants.
The chemical sector also has a key role in contributing to a progressive regulatory and policy environment by engaging with policymakers and joining ambitious business coalitions.
Promote circularity, innovate products, and education customers
Companies need to better understand how the manufacturing process and products affect nature and biodiversity. They also need to minimize ecotoxicity through design, risk assessments, portfolio development, optimization of manufacturing process, and end-of-life solutions.
While acknowledging these changes require significant investments and carry risks, companies can benefit from innovating their business models and introducing circular solutions and new products and services that avoid negative impacts on nature or serve the nature-positive transition of another industry.
Companies that want to enlist the support of their downstream value chain can invest in campaigns that educate both business-to-business and business-to-consumer customers on product use and disposal to reduce the nature footprint of a product.
Navigating nature-related risks across industries
We partnered with the World Economic Forum to release a series of reports detailing the material impacts and dependencies on nature of 12 global industries, including the chemical industry, household and personal care products, and concrete and cement. Developed in collaboration with Business For Nature and the World Business Council For Sustainable Development, these reports outline priority actions within sectors to avoid and reduce negative impacts, mitigate nature-related risks, and unlock opportunities across value chains.
