NOT CURRENT YEAR
Covestro produce 22 highly hazardous substances, including two persistent chemicals. Compared to some of the other companies in the ranking that might seem good, but it is still a portfolio full of problematic substances and a big reason behind Covestro’s poor score in the ranking. Covestro scores fairly well in the Development of Safer Chemicals category, due to actively marketing safer chemicals. There’s no record of Covestro being involved in any controversies, rendering the company all six points in the last category. These six points really saves Covestro from being among the very worst performers.
Opportunities for improvement
- Covestro currently has two 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 Covestro prioritises phasing out persistent chemicals from its product portfolio.
- The company should also reduce its hazardous portfolio overall, which currently consists of 22 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 three PIC substances that Covestro 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.
- Having initiated 20 R&D projects, Covestro regards itself as a circular economy frontrunner. The strategy includes circular raw materials, renewable energy, chemical recycling and collaborations throughout the supply chain. However, the measurable targets necessary to award the company all circularity points are lacking. ChemScore only evaluates technologies that are used in practice and at scale, making an overall contribution to sustainability. Therefore, chemical recycling is not rewarded. Regarding Covestro’s biobased feedstock, an outspoken statement regarding land use or competition with food production is needed for the company to receive points.
Covestro produces/uses 22 highly hazardous substances –22 SIN List chemicals, 3 PICs, and 4 HHPs – 10 of which are included on the EU’s REACH Candidate List. 2 of these highly hazardous substances are either banned or severely restricted, with set dates when production needs to cease (2 Authorisation List substances, and no POPs). The company produces 2 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 44% 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.
Covestro has a method in place to screen and assess the sustainability of its products and includes the intrinsic hazards of ingredients in the screening process. It does not, however, exclude substances with toxic properties from its new products. Covestro actively markets safer alternatives on its own website, but not on ChemSec Marketplace. The company has not any true circular products, processes or innovations. Covestro uses bio-based resources without the expense of occupying extra land or in competition with food production. However, it does not source and treat recycled materials in a sustainable way, which is one of the key elements of a circular economy. Covestro is actively reducing the hazardous waste it generates.
The German company does not produce only sustainable products. Nor does it have a phase-out strategy for hazardous substances that go beyond regulatory compliance. It shares chemical safety information on its website and is following a credible code of conduct standard. Covestro responded to ChemSec’s attempts to communicate around its ChemScore ranking, but it does not share any information about what kind of chemicals it produces in regions with low regulatory demands for transparency (e.g. Asia). Covestro does have a circular economy program in place, but it is lacking objective and measurable circular economy targets.
Although Covestro has not been involved in any major controversies over the past ten years, the company and its subsidiaries have paid close to 60,000 USD in fines for two environmental violations, according to the violation tracker project of Good Jobs First.Download Controversies Covestro (PDF, 113 KB)