The Chemical Sector

and the SDGs

Understanding the chemical sector and how it relates to the SDGs

The chemical sector is a four trillion dollar global business, employing more than 20 million people directly and indirectly. Today’s world – from the food we consume, the way we travel, the clothes we wear, and the technology we harness – depends on the products of the chemical industry.

Through the responsible production, use, and management of chemicals, the chemical sector can support the SDGs through innovative products and practices that minimize negative impacts, protect the environment, promote social progress, and support economic growth. Many of these principles are already enshrined in the industry’s Responsible Care® Program.

This Roadmap sets out to explore how the chemical sector can contribute to achieving the SDGs through more effectively managing its own operational footprint, working with others to enhance capacities along the value chain, and leveraging its expertise and innovation to unlock new business opportunities that are aligned with the SDGs. This will require action to minimize any adverse aspects while maximizing positive impacts.

The chemical sector at large is a supplier of products and services into virtually every other industry. Due to this, the Roadmap is not an exhaustive overview, but instead describes areas where the chemical sector is uniquely suited to make a considerable and lasting impact.

The Chemical Sector

The chemical sector creates an immense variety of products which interact with virtually every aspect of our lives. While many products from the industry, such as detergents, soaps, and perfumes, are purchased directly by the consumer, others are used as intermediates to support the development of other products such as foods, plastic, and pharmaceuticals. The complexities of the industry are broadly highlighted in the figure below. The industry uses a wide range of raw materials, from air and minerals to oil. With increasing competition worldwide, innovation remains crucial to finding new ways for the industry to satisfy its increasingly sophisticated, demanding and environmentally-conscious market. Manufacturers in the chemical sector can be divided into five categories:

  • Commodity Chemicals. Companies that primarily produce industrial chemicals and basic chemicals. Including but not limited to plastics, synthetic fibers, films, commodity-based paints & pigments, explosives, and petrochemicals.
  • Diversified Chemicals. Manufacturers of a diversified range of chemical products.
  • Fertilizers & Agricultural Chemicals. Producers of fertilizers, pesticides, potash or other agriculture-related chemicals.
  • Industrial Gases. Manufacturers of industrial gases.
  • Specialty Chemicals. Companies that primarily produce high value-added chemicals used in the manufacture of a wide variety of products, including but not limited to fine chemicals, additives, advanced polymers, adhesives, sealants and specialty paints, pigments and coatings, and intermediates used in renewable materials and in the food, pharmaceutical, and other industries.

The complex and diversified nature of the sector is accounted for in the Roadmap, which is inclusive of all sub-sectors from basic chemicals, intermediates and formulated products through to end use markets.

RAW
MATERIALS
BASIC
CHEMICAL
  • Olefins (ethylene propylene, butylene)
  • Aromatics (benzene, toluene, xylenes)
  • Chlor-Alkali (chlorine, caustic soda)
  • Methanol
  • Bio-based materials  (e.g. sugars, starches, natural oils and acids)
  • Others (eg., ammonia, phosphorous)
    •  
CHEMICAL
INTERMEDIARIES
  • Commodities
  • Differentiated commodities
  • Technical specialities
FORMULATED PRODUCTS AND
PRODUCT MATERIALS
  • Plastics and Engineering Resins
  • Extruded films, pipes, profiles, coatings, sheets, foams
  • Blow-molded parts
  • Injection molded parts
  • Composites
  • Synthetic Fibers
  • Rubber Products
  • Paints & Coatings
  • Adhesives & Sealants
  • Lubricants
  • Water Treatment Products
  • Cleaning Products
  • Industrial Chemicals
  • Flame Retardants
  • Many others…
CUSTOMERS OF
THE CHEMICAL INDUSTRY
  • Automotive/ Transportation
  • Consumer Products
  • Packaging
  • Building & Construction
  • Recreation/sport
  • Industrial
  • Medical
  • Pharmaceuticals
  • Personal care
  • Textiles
  • Electrical/electronics
  • Aircraft/aerospace
  • Food
  • Bio-based materials

Facts and figures

The global chemical industry is a $4 trillion enterprise that impacts virtually every sector of the economy. Over 95% of manufactured goods are touched by chemistry.
More than 20 million people around the globe are employed directly or indirectly by the chemical industry.
The energy savings enabled by chemical products are double those required to manufacture them.
In 2030 the solutions provided by the chemical industry could reduce emissions by 2.5 GtCO2e per year – a reduction equivalent to total emissions from France, Germany, Italy and the UK combined.

Highlights of innovative chemical sector sustainability initiatives

The sector’s approach to sustainability is long-standing. Here are selected examples that demonstrate how the sector is collaborating to tackle sustainability issues.

  • Responsible Care® was first launched in 1985 and is a voluntary commitment by the global chemical industry to drive continuous improvement and achieve excellence in environmental, health and safety and security performance. Responsible Care encourages collaborative work between the domestic and international industry, government, and local authorities to help demonstrate best practices in safe chemicals management around the globe.
  • The International Council of Chemical Associations (ICCA) launched the Global Product Strategy (GPS), in 2006, to advance the product stewardship performance of individual companies and the global chemical industry as a whole. Together with the Responsible Care Global Charter, GPS is the chemical industry’s contribution to the Strategic Approach to International Chemicals Management (SAICM). The overall objective of this policy framework, initiated by the United Nations Environment Programme (UNEP), is that by 2020, chemicals are produced and used in ways that minimize significant adverse impacts on human health and the environment. SAICM plans for sound management of chemicals and waste beyond 2020 are now in discussion.

  • The Together for Sustainability (TfS) initiative was set up in 2011 with the purpose of developing and implementing a global program to assess and improve sustainability practices within the supply chains of the chemical industry. More than 16 000 suppliers have been assessed (end of 2020); 75% of suppliers improved their audit scores upon evaluation and 57% of suppliers improved after re-assessment. The TfS program now also includes scope 3 GHG emissions. This program is to develop pragmatic approaches to measure GHG emissions data as well as to obtain it from TfS companies’ suppliers and share it across TfS member companies. It is paramount that the collected and shared data are consistent, reliable, robust and effective.

  • The chemical sector, as a solutions provider, is an enabler of sustainability across value chains. In order to understand the opportunities and levers to reach scale, WBCSD chemical sector companies established a “Reaching Full Potential” initiative, which published three guidance documents: a framework to help companies assess the sustainability of their product portfolios; guidance to support chemical companies to assess the social impact of their products; and guidance for environmental footprint of products. Addressing the Avoided Emissions Challenge, guidelines for accounting for and reporting greenhouse gas (GHG) emissions avoided along the value chain based on comparative studies were also published in 2013 by the ICCA and WBCSD.
  • The Chemicals in Products  (CiP) Programme is an ongoing activity at UN Environment on the policy and practical facets of access to information on the chemicals contained in everyday products. The multi-stakeholder project developed a voluntary framework in 2015 to improve the exchange of information on chemicals contained in products and proposed cooperative actions to address gaps in the current levels of information access.

Highlights timeline

The Chemical Sector and the SDGs

The chemical sector is a partner, innovation enabler and solutions provider to essentially all sectors of the economy. The scale and diversity of the industry provide it with widespread opportunities to contribute to the realization of the SDGs by 2030.

The chemical sector can contribute to each of the 17 SDGs in different ways. Some of these are described below with accompanying case studies relating to existing partnerships that are helping to advance specific SDGs. The remainder of this Roadmap will seek to dive deeper and identify the SDGs where the sector has the most potential to drive transformation and innovation focused on lasting SDG impact.

Chemical sector interactions with the SDGs

The chemical sector contributes to economic growth and improvements in the quality of life for people globally. As responsible employers, chemical companies provide living wages and benefits to their employees and uphold their supply chain responsibilities. Through investments and partnerships, chemical companies make a positive contribution to combating poverty by strengthening and revitalizing communities and improving infrastructure. Innovative products directly support affordable and accessible shelter and other basic goods while creating capacity for economic growth in countries most in need.
The chemical sector has a key role in supporting a more sustainable food supply that meets the basic nutritional needs of a growing global population. Advances in chemistry help protect plants from pest infestations, improve food distribution channels, extend lifetimes of food and food packaging and maintain food quality and safety. High-yield seeds and fertilizers increase food production and slow soil erosion. Fortified crops and processed foods help combat malnutrition in areas with limited access to healthy foods.
Case Study
Human health and safety are among the chemical sector’s highest priorities. The industry strives to minimize negative health impacts from the exposure to chemicals in the workplace, at home and in the community. Innovations and a commitment to product stewardship have increased the availability of products with health and safety benefits while reducing their environmental footprint. This includes accelerated deployment of best practices in safe production, distribution and management of chemicals in emerging markets through uptake of Responsible Care. In addition, medical breakthroughs and innovative technologies made possible by chemistry provide deeper understanding of the causes of – and better treatments for – medical diseases and ailments, enabling people to live longer and healthier lives.
Equitable quality education supports economic growth, improved public health and more stable societies. The chemical sector promotes science education through philanthropic investment and specific initiatives that target certain regions or populations, including technical apprenticeships and programs which help improve the professional skills of existing and potential employees.
The chemical sector continues to support the participation, contribution and success of women throughout the industry through the implementation of programs and management approaches to ensure gender equality. Beyond this, the sector also has the capacity to develop and market products that address women’s health and well-being, such as food fortification initiatives.
Access to clean water and sanitation is a global issue that must be managed at a local level and chemistry has an essential role. Advances in chemistry include disinfectants that kill germs and prevent disease; polymer membrane filters that remove impurities; materials for desalination; and materials for pipes that protect water from its source to the tap. Chlorine-based water disinfectants maintain drinking water quality during storage and distribution. Innovative piping solutions prevent water loss in operations and supply chains and help transform water distribution networks. Advances in chemical sector water management improve water quality by reducing pollution, eliminating improper disposal and minimizing release of hazardous chemicals and materials, reducing the proportion of untreated wastewater and increasing recycling and safe reuse. Water stewardship increases water use efficiency and ensures sustainable withdrawal of freshwater. Focused research and development improves urban water treatment capabilities through desalination, filters, energy efficient processes and treatment chemicals.
Case Study
The chemical sector is continuously improving energy efficiency in its facilities, and its companies manufacture products that help to improve efficiency for downstream customers and users as well. The chemical sector helps enable production and storage of renewable energy and renewable energy infrastructure through the supply of key materials for wind turbines and solar PV panels. Chemistry is also a key component of innovations in carbon capture and storage/utilization technology. Working in partnership with others, the sector is also collaborating on efforts to validate and scale hydrogen cell technologies as a new chemical carrier for energy and battery technology, which will help to improve access to new sustainable energy sources.
Case Study
The safe production and management of chemicals is crucial to economic growth and enhancing quality of life for people globally. Innovation provides business opportunities and a sustainable foundation for global growth. Furthermore, upholding labour standards and respecting human rights throughout the chemical sector’s operations and the entire value chain represents a substantial opportunity to advance human development globally.
The chemical sector is strengthening its production assets to promote resiliency. Frameworks that promote industrial symbiosis for chemical sector companies and their value chains help address environmental and resource concerns, reduce raw material and waste disposal costs, earn new revenue from residues and by-products, support circular business models, and develop new business opportunities. Chemical products play an important role in enabling and building resilient infrastructure solutions and by engaging with other sectors, chemical companies can further enable open-innovation and manufacturing advancements to encourage the development of integrated and end-to-end models.
Case Study
The global chemical industry is a USD $4 trillion business affecting virtually every sector of the economy. Worldwide, more than 20 million people are employed directly or indirectly by the sector. Chemical
manufacturers can advocate for equality in developed countries that the sector operates in, and provide investment into emerging and developing countries to encourage development that reduces inequality. Many companies have adopted global policies that support issues such as fair wages, safety and ethical standards, and social protections
Not only do chemical products help improve buildings, transport and infrastructure, they also help strengthen community resilience. As the rate of population growth in urban areas increases there is tremendous pressure for cities to scale implementation of sustainable solutions that meet the needs of the local communities. The chemical sector is working to increase its involvement in multi-stakeholder collaboration to make cities more sustainable and inclusive, improving the lives of the urban poor.
Case Study
Chemical products help improve the quality and efficiency of production processes across industries. Through chemistry, operations in a wide range of sectors and geographies have improved their water stewardship efforts and accelerated energy efficiency. From food packaging and additives to prevent food loss and waste, to innovations in waste management systems (design and operate), the chemical sector is helping to transform production and reduce the life cycle impacts of consumption. Through Responsible Care and the Global Product Strategy, the chemical industry is committed to advancing sustainable management of materials in all its phases, and achieving greater transparency in environmental, health, and safety performance.
Case Study
Many chemical companies are taking concerted action to address the issue of climate change through decarbonisation initiatives, energy efficiency, reducing the footprint of their products and the development of innovative solutions to avoid downstream emissions. In addition, chemical companies are working together to build resilience and adaptive capacity for the sector and its supply chain in response to the impacts of climate change. The sector also plays a key role in the development of solutions that will enable other sectors to strengthen their resilience to climate related risks.
Case Study
The chemical sector works with others in the value chain to reduce marine pollution of all kinds, including nutrient pollution and the prevention and reduction of ocean plastic waste.
Case Study
The chemical sector measures and manages its environmental impacts and dependencies. This includes efforts to mitigate negative impacts that some products can have on ecosystems and biodiversity by improving product formulations and design as well as managing such products further downstream. The sector directly reduces its impacts on land and other natural resources through improving operational management, and amplifies philanthropic efforts to halt environmental degradation and protect critical ecosystems.
The sector is focused on maintaining standards of ethical business conduct throughout the value chain. This can be achieved through partnerships that allow industry to reduce corruption wherever it may exist in the supply chain. The sector can also engage with local, regional, national and international bodies on societal structures and laws to promote responsible business practices (including anti-bribery and corruption).
Partnerships are a key enabler to accelerate sustainable development and advance theSDGs. The chemical sector has opportunities to:

  • Develop multi-stakeholder and cross border partnerships and agreements to achieve sustainable development (e.g. Circular Economy, Water Stewardship, SAICM, etc.) with organisations such as WBCSD, WEF, ICCA, etc. Blueprints can be developed and leveraged;
  • Collaborate with downstream partners, government organizations, NGO groups and other involved stakeholders working towards sustainable development;
  • Contribute to improving environmental and safety performance in emerging countries through capacity building;
  • Incorporate collaboration as a critical pillar of sustainability efforts/programs, and share technologies/science with partners to enhance sustainable development globally, and
  • Encourage open innovation initiatives for the sector.
Case Study

Key goals for the sector

As already described, the chemical sector has the capacity to help advance each of the 17 SDGs in a range of different ways and should remain alert to emerging opportunities to contribute across the full spectrum of the goals. However, in order to advance its interaction with this crucial agenda, it is also important for the sector to prioritize the SDGs where it has the most influence or the most ability to drive innovation, transformation and impact through leveraging its role in the value chain. With this in mind a key component of the road-mapping exercise was for parties involved to establish a common view of which are the priority SDGs for the sector.

Method and approach to prioritization

This is the first collective initiative by the chemical sector to extensively map and prioritize the 17 SDGs and their 169 targets in the context of the sector as a whole. This prioritization was conducted in order to narrow the wide playing field that the SDGs represent and identify the most critical focus areas for the sector in view of maximizing its capacity for SDG impact. This exercise was completed collaboratively with involvement from participating chemical sector companies and industry associations, WBCSD and external experts. The following four activities were undertaken:

  • Exploration of how the chemical sector value chain interacts with each SDG;
  • Identification of the sector’s current level of positive and negative impact on the goals;
  • Assessment of the sector’s untapped potential to impact each goal and the potential for accompanying opportunities to create business value; and
  • Mapping of SDGs in a materiality matrix to understand sector priorities.
The first three activities were completed at SDG target level, based on participants’ knowledge of the sector, and third-party industry expertise, alongside published literature. A number of workshops were then held to assess and explore the level of potential the sector has to drive change for each of the mapped SDGs, during which representatives considered how current programs could be scaled or replicated, or where innovation and new partnerships could be leveraged to address sustainability challenges. Anticipated changes in technology, new products, business models and sector dynamics through the SDG time horizon of 2030 were also factored into discussions. Through mapping the sector’s current level of impact (positive and negative) against the opportunities where the sector has the most potential to contribute towards the SDGs, it was possible to establish priority areas of focus, as shown opposite.

Goals where the sector can have the greatest impact

10 goals were identified by the working group as being priority areas of engagement for the sector. These have been identified with the understanding that interdependencies exist across all the SDGs, and specific contributions related to one goal can have potentially positive or negative contributions to other goals. This is something that the sector should remain conscious of and alert to moving forward. Although SDG 17 (Partnerships for the goals) was not identified as a priority goal, it is recognized that the spirit of partnership and collaboration that it embodies is a recurring theme throughout this Roadmap and indeed is central to the exercise of undertaking a sector roadmap itself.

Prioritization of SDGs

End hunger, achieve food security and improved nutrition and promote sustainable agriculture.

Ensure healthy lives and promote well-being for all at all ages.

Ensure access to water and sanitation for all.

Ensure access to affordable, reliable, sustainable and modern energy for all.

Promote inclusive and sustainable economic growth, employment and decent work for all.

Build resilient infrastructure, promote sustainable industrialization and foster innovation.

Make cities inclusive, safe, resilient and sustainable.

Ensure sustainable consumption and production patterns.

Take urgent action to combat climate change and its impacts.

Conserve and sustainably use the oceans, seas and marine resources.

*  SDG 17 (Partnerships for the Goals) has not been specifically identified as a priority goal, however the spirit of collaboration that it embodies cuts across the sector’s interaction with the entire SDG agenda.
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