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Chemical companies have climate ‘ambition’ but lack ‘actionable’ plans, non-profit says

Air Liquide was ranked by Planet Tracker as the ‘clear leader’ for its climate transition plans, with its commitment to reduce Scope 1 and 2 emissions by 35% and specific Scope 3 emissions by 60% by 2035 © REUTERS
Air Liquide was ranked by Planet Tracker as the ‘clear leader’ for its climate transition plans, with its commitment to reduce Scope 1 and 2 emissions by 35% and specific Scope 3 emissions by 60% by 2035 © REUTERS

Chemical companies must reduce the role of ‘unproven technologies’ in their climate plans and assess their trade association membership to reach net zero targets, UK non-profit Planet Tracker says

Chemical companies have “ambition” towards a net zero transition but their plans are not yet “actionable” and “robust”, an analysis of seven leading chemical companies by non-profit Planet Tracker has found. 

The report analysed the transition plans of Air Liquide, BASF, Bayer, Dow, Incitec Pivot, LyondellBasell and Toray Industries, companies that are all members of the investor-led Climate Action 100+, which seeks to ensure that the largest emitting companies take action to reduce their emissions.

Planet Tracker ranked the companies on their climate transition plans. French company Air Liquide was ranked as the “clear leader” with a commitment to reduce Scope 1 and 2 emissions by 35 per cent by 2035 and specific Scope 3 emissions from the use of fossil fuels by 60 per cent by the same year. The company also has a net zero target for 2050.

Meanwhile, Germany-headquartered company BASF sits at the bottom of Planet Tracker’s ranking. The report says BASF’s plan relies on “unproven technologies such as CCS [carbon capture and storage] and process electrification”, which puts its 2050 net zero target “at risk”.

Chemical companies play a “pivotal role” in the transition, Planet Tracker says. The industry generated $5.7tn in annual revenue in 2022 and chemical components are essential for 96 per cent of all manufactured goods, the report adds.

The companies were ranked according to their performance across four areas: “climate alignment”, which considers emissions reduction goals; “policy and governance”, covering trade association memberships and the integration of sustainability performance into management pay; “risk analysis”, covering the risks associated with their transition plan and the physical risks of climate change; and “capital alignment”, which assessed each company’s investment into the climate transition relative to its size. 

Planet Tracker urges chemical companies to assess their trade association membership to ensure associations are not “mismatched” with their in-house sustainability policies.

BASF is a member of 14 trade associations that do not align with the Paris Agreement’s ambitions to limit the global temperature rise to 1.5C above pre-industrial levels, Planet Tracker says. Air Liquide, despite its leadership in other sustainability factors, and Dow are both members of nine Paris-misaligned associations. Toray, LyondellBasell, and Bayer are members of three, four and five such associations, respectively, the report adds.

A BASF spokesperson tells Sustainable Views that positions of its trade associations on climate are “in line with [its] own, and [it] sees no fundamental differences”. The input of trade associations on regulatory energy and climate policy proposals should not be “construed as an attempt to question the objectives of the Paris Agreement”, BASF adds.

The other chemical companies ranked by Planet Tracker did not respond to Sustainable Views’ request for comment.

The report is available to read here.

A service from the Financial Times