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DIC Corporation
About the company
Grade Summary
Just barely escaping ChemScore’s bottom five, DIC Corporation produces 17 hazardous substances, one of which is persistent. The production of problematic chemicals is one reason for the poor score, but also the fact that there’s no available data for the 80 percent of the company’s production that takes place outside of the EU and US. This low transparency is a big issue for investors, as it makes it hard to do a proper evaluation of the risks connected to the product portfolio. Another poor area for DIC Corporation is the Lack of Controversies category, where the Japanese company scores zero points due to several serious accidents. In the remaining categories, DIC Corporation’s performance is weak across the board.
Opportunities for improvement
- DIC Corporation should reduce its hazardous portfolio, which currently consists of 17 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 four PIC substances that DIC Corporation 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.
- We can only rank 20% of DIC Corporation’s overall production, since the rest takes place outside the EU and US, where there are no reliable and publicly available sources for identifying producers of hazardous chemicals. Informing ChemSec about hazardous chemical production outside the EU and US could raise the company’s score considerably.
- DIC Corporation states that it is developing environmentally friendly and less hazardous products. We would like to see products completely without hazardous ingredients, replacing the “less hazardous” ones. If the company has such products in its portfolio, we urge it to promote them publicly.
Category breakdown
DIC Corp produces/uses 17 highly hazardous substances – 15 SIN List chemicals, 4 PICs, and 3 HHPs – 3 of which are included on the EU’s REACH Candidate List. None of these highly hazardous substances are either banned or severely restricted (no Authorisation List substances, and no POPs). The company produces 1 persistent chemical. 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 80 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.
DIC Corporation 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. DIC Corporation actively markets safer alternatives on its own website, but not on ChemSec Marketplace. The company has no true circular product, process or innovation. DIC Corporation 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. DIC Corporation is actively reducing the hazardous waste it generates.
The Japanese 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 does not share chemical safety information on its website, but it is following a credible code of conduct standard. DIC Corporation 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). DIC Corporation does not have a circular economy program in place, and it is lacking objective and measurable circular economy targets.
During the last 10 years, there has been many incidents at factories and plants operated by DIC Corporation. Although the fines for different environmental violations are limited, the reported incidents have resulted in both one causality and several injuries. Many of the incidents are connected to the DIC Corporation subsidiary, Sun Chemical.
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