Action points 🔍

1. Increase transparency

Although Daikin has responded to our requests for more information regarding the company’s chemicals management, much is still unknown about Daikin’s production and use of hazardous chemicals. To demonstrate a commitment to transparency, Daikin should disclose both the share of revenue and production volume of products that are, or contain, hazardous chemicals. This information should cover all operations, including subsidiaries, worldwide. SABIC provides a good example, as it has disclosed its full chemicals portfolio, including production volumes and locations.

2. Map and phase out persistent chemicals

Daikin is responsible for placing at least 12 persistent chemicals on the US/EU market, where all or most are PFAS substances. The risks linked to these “forever chemicals” are becoming increasingly clear, not only for human health and the environment but also for companies and their shareholders. The regulatory tightening, high-profile lawsuits, and rising consumer awareness make business models based on persistent chemicals increasingly risky. Daikin should first identify all uses and the share of total revenue derived from products that are or contain persistent substances. Then, the company should publish a time-bound plan to phase out persistent chemicals from each product group or business segment. Sika and LyondellBasell have both published the share of revenue that is generated from products containing PFAS. 3M has also published those numbers and committed to exiting the manufacture of PFAS by 2025.

3. Develop safer solutions

Daikin currently lacks a strict policy for limiting hazardous chemicals in its new product development. As a result, both its existing and future product lines are dependent on substances that run the risk of becoming regulated. Therefore, Daikin may face growing challenges in maintaining profitability in the long term. The company should set a 2030 target for the share of revenue generated by products free from hazardous chemicals and develop a strategy to achieve it. A first step should be to, similarly to Lanxess, publicly state that it will not develop or market new end-products containing more than 0.1% of substances that have the characteristics of a Substance of Very High Concern (SVHCs).