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Arkema
About the company
Grade Summary
Arkema has a large production of hazardous chemicals and data tells us that it is producing 40 highly hazardous chemicals, including six persistent chemicals, leaving the company without a single point in the first category. Another poor area for Arkema is the Lack of Controversies category, where the French company scores zero points due to several pollution scandals and huge penalty fines. In the other categories, Arkema places itself very much in the middle. It does not really excel in anything, but it is not among the worst performers either.
Opportunities for improvement
- Arkema currently has six substances in its product portfolio belonging to the group of chemicals dubbed “forever chemicals”, due to their extreme persistence. For investors, these chemicals pose a nightmare when the persistence and level of exposure is revealed, as demonstrated by the companies involved in the PFAS disaster, suffering massive financial implications. Investors risk stranded assets, as the environmental and human health impacts of exposure to “forever chemicals” can’t be stopped or easily reversed. For this reason – not to mention for the sake of human health and the environment – we strongly recommend that Arkema prioritises phasing out persistent chemicals from its product portfolio.
- The company should also reduce its hazardous portfolio overall, which currently consists of 40 banned, severely restricted or SIN-listed substances. Chemical pollution has a harmful impact on human health and the environment, and poses a growing threat. Two million people died due to exposure to hazardous chemicals in 2019, compared to 1.56 million in 2016, according to the World Health Organization (WHO). Hazardous chemicals are also key drivers of biodiversity loss, putting entire ecosystems in jeopardy. A good place to start the reduction would be the seven PIC substances that Arkema still offers. PIC, short for Prior Informed Consent, is one of the key provisions of the Rotterdam Convention, allowing the export of – often domestically restricted – hazardous chemicals to poorer countries with weaker chemical legislation, as long as the receiving country signs a consent that it understands what it is accepting and has a plan for how to handle it.
- A company with many hazardous chemicals in its portfolio needs a rigorous chemical management, but Arkema’s portfolio sustainability assessment – named Archimedes – seems to be more oriented towards business management than chemicals management. We would like to see a systematic screening of intrinsic hazards. The development and marketing of safer, less toxic alternatives would be a good follow-up.
Category breakdown
Arkema produces/uses 40 highly hazardous substances – 35 SIN List chemicals, 7 PICs, and 6 HHPs – 6 of which are included on the EU’s REACH Candidate List. 1 of these highly hazardous substances is either banned or severely restricted, with set dates when production needs to cease (1 Authorisation List substances, and no POPs). The company produces 6 persistent chemicals. Persistent chemicals are particularly problematic, since they do not break down, but instead accumulate in humans and the environment. Because of this, persistent chemicals should be of extra concern for investors; substances that are not considered a problem today could become huge liabilities in the future.
Please note that there is no available data for the 53 percent of the company’s production that takes place outside of the EU and US. Lower EU/US production means higher uncertainty with regard to the total production of hazardous chemicals, which will have a negative impact on the company’s score in this category.
Arkema has a method in place to screen and assess the sustainability of its products, but it does not include the intrinsic hazards of ingredients in the screening process. Neither does it exclude substances with toxic properties from its new products. Arkema actively markets safer alternatives on its own website, but not on ChemSec Marketplace. The company has at least one product, process or innovation that enables production of circular products. Arkema uses biobased resources without occupying extra land or competing with food production. It does not source and treat recycled materials in a sustainable way, which is one of the key elements of a circular economy. Arkema is not actively reducing the hazardous waste it generates.
The French company does not produce only sustainable products, and it does not have a timed phase-out strategy for hazardous substances that go beyond regulatory compliance. It shares, however, chemical safety information on its website and is following a credible code of conduct standard. Arkema responded to ChemSec’s attempts to communicate around its ChemScore ranking. However, the company does not share any information about what kind of chemicals it produces in regions with low regulatory demands for transparency (e.g. Asia). Arkema has a circular economy program in place, but it is lacking objective and measurable circular economy targets.
Between 2011 and 2020, Arkema paid 12,533,800 USD in fines for 16 environmental violations according to the violation tracker project of Good Jobs First. Arkema has also been sued for contamination by different kinds of hazardous substances, such as perflourinated chemicals. In 2017, toxic chemicals were dispersed miles from an Arkema plant in Texas after a flooding.
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