Methodology

ChemScore is an initiative from NGO ChemSec that aims to capture and rank the world’s largest chemical companies’ efforts to reduce their production of toxic chemicals and boost investments in safer, greener alternatives.

ChemScore is the only independent ranking of companies producing hazardous chemicals and their efforts to transition to less hazardous alternatives. Production of such chemicals increases corporate exposure to regulation, litigation and shifting consumer sentiment, making ChemScore an authoritative guide to medium and long-term investor risks and opportunities stemming from these threats.

Company report cards include a detailed report which benchmarks numerous factors summarised below. ChemScore is updated in the last quarter of every year. 2023 marks the fourth annual update.

 

The companies we rank

The 50 largest (by revenue) global stock-listed chemical companies. Most firms selected by ChemScore are categorised in the GICS index as materials/chemicals. Additional firms with large chemical portfolios but outside the GICS categorisation were added to ChemScore by Investor Initiative on Hazardous Chemicals where investors wish to better understand their risk profile. Of the thousands of chemical producers that exist, ChemScore limits its ranking to the 50 most prominent firms, given limited resources. Those firms have an aggregated annual revenue of approximately 1,1 trillion US$, while the sector amounts to approximately $6 trillion.

 

What cannot be ranked

ChemScore only tracks publicly traded companies, where investors are most able to influence company decisions. Most Chinese chemical firms are state-owned, so excluded from ChemScore, despite China being the world’s largest producer of chemicals by volume. Additionally, stock listed Chinese firms publish little or no information in English and information in Chinese is extremely sparse. These firms are therefore impossible to assess. Wanhua Chemical stands out as the exception – it publishes relatively detailed information in English and is therefore included in the ranking. Pharmaceuticals are excluded because it is a category treated separately by investors. Reliable public records do not exist for chemical production outside the EU and US and this is subject to a modelled estimate, explained more in detail under the Product Portfolio headline in the menu to the left.

 

The ranking method

Firms are ranked together with all their subsidiaries. Points are awarded or deducted according to performance in four categories:

  1. Hazardous chemical production (a maximum 18 available points)
  2. Development of safer chemicals and ‘circular’ products (max 12 points)
  3. Chemical management and company transparency (max 12 points)
  4. Track record of controversies, lawsuits and regulation (max 6 points)

Where companies fail to provide information, ChemScore assesses performance from public information, such as annual and sustainability reports and corporate websites. Firms are always presented with their draft score and invited to inform ChemSec of additional public information or possible errors.

The points scored in each of these categories are then summed to give an overall score, presented in the form of a letter grade. Read more about the categories in the menu to the left.

 

Examples of best practices

Download this document to see examples of best practices in ChemScore.

The idea of this document is to give the reader a feeling for some of the best practices that were rewarded in this year’s ChemScore. It could serve as a source of inspiration for companies and investors. Both to better understand what has been achieved and how decisions have been taken to reward specific achievements and to give a better explanation.

Please note that all criteria are not included, but only those where there is a notable difference between the companies’ performance and which involve a qualitative assessment from ChemSec’s side. For example, if a company has reduced or increased its generation of hazardous waste, is a yes/no question that would not need further explanation and is hence not included.