Grade summary

Covestro has maintained its overall grade consistently over the past four years. The company has decreased its number of hazardous and persistent chemicals by removing one since last year. However, just above half of its sold production is registered in EU/US markets, impacting transparency.

Covestro actively assesses its portfolio and conducts intrinsic hazard screenings but has, unfortunately, not publicly disclosed design-out or phase-out plans for its harmful chemicals. Nevertheless, Covestro has developed a sustainable product line and advertises it on ChemSec’s Marketplace. The company has integrated a circular policy as a central strategy, aiming for full circularity even in the product development stage. Although KPIs are under development, they are not yet available for evaluation to assess the company’s progress. Chemical recycling, however, is not awarded due to its limited positive environmental impact.

How did we come to this score?

Opportunities for improvement

1. Map and phase out persistent chemicals
   Covestro produces or uses at least one persistent chemical. These substances are known as “forever chemicals” due to the fact that they do not break down in nature. These chemicals — which are linked to many negative health effects — instead build up over time, creating consequences that are becoming increasingly detrimental. Not only for human health and the environment but also for investors. Companies reliant on such chemicals risk stranded assets now that the regulatory speed is accelerating. They are also exposed to significant liability risks since more chemical companies are being sued for contamination and bodily injury. Covestro should therefore identify all uses, as well as publish the share of revenue and production volume of persistent chemicals (or products that contain them). The company should publish a time-bound phase-out plan for each persistent chemical and a realistic road map with clear KPIs to track progress.

2. Reduce hazardous portfolio
   Scientists agree that chemical pollution has crossed a planetary boundary and become an urgent global crisis, threatening both ecosystems and human health. Since Covestro has 26 hazardous chemicals in its product portfolio, a key improvement point for the company is to reduce this number. Covestro should therefore identify all uses, as well as publish the share of revenue and production volume of hazardous chemicals (or products that contain them). It should also publish a reduction road map of each hazardous chemical together with an annual progression report. Ideally, the company should commit to having a toxic-free product portfolio within the next decade. If the company decides to continue producing a hazardous substance, it needs to present a rationale for its essential use and prove that no feasible alternatives are available at present. In such a case, the company should also state the share of the R&D budget spent on finding a safer alternative for that particular substance.
3. Increase transparency in product portfolio
   To improve transparency, Covestro should consider disclosing the percentage of revenue generated by products containing Substances of Very High Concern (SVHCs). Additionally, the company should expand the publication of its global hazardous portfolio to regions beyond the EU and US markets. This will provide stakeholders with a more comprehensive view of its hazardous product portfolio and bolster transparency efforts.

Category breakdown