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Dow
About the company
Grade Summary
Dow has a very large production of hazardous chemicals and data tells us that it is producing 71 highly hazardous chemicals this year, compared to 63 last year. Fortunately, the production of persistent chemicals has decreased, but only slightly – from six substances to five. This large production of very problematic chemicals is a big reason behind Dow’s poor score in this category (zero points) and also in the ranking as a whole. Another poor area for Dow is the Lack of Controversies category, where it scores yet another zero points due to several litigations and huge penalty fines. Dow scores fairly high in the Development of Safer Chemicals category, as it is actively marketing safer chemicals and also recognizes the inherent toxicity of its ingredients.
Opportunities for improvement
- Dow currently has five 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 Dow prioritise phasing out persistent chemicals from its product portfolio.
- The company should also reduce its hazardous portfolio overall, which currently consists of 71 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 Dow 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.
- Dow has started its circular journey, achieving three out of eight circularity points. As ChemScore only evaluates technologies that are used in practice and at scale, making an overall contribution to sustainability, we haven’t rewarded the company’s chemical recycling. We are critical that Dow uses a mass balance approach, which allows for misleading accounting, since it doesn’t require a physical connection between the input waste material and the end product, claiming to contain renewable or recycled content. Instead, the company should scale up mechanical recycling, and be honest and transparent about material flows
Category breakdown
DOW produces/uses 71 highly hazardous substances – 67 SIN List chemicals, 7 PICs, and 10 HHPs – 15 of which are included on the EU’s REACH Candidate List. 4 of these highly hazardous substances are either banned or severely restricted, with set dates when production needs to cease (4 Authorisation List substances, and 1 POPs). The company produces 5 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 51 % 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.
Dow has a method in place to screen and assess the sustainability of its products and includes intrinsic hazards of ingredients in the screening. It does not, however, exclude substances with toxic properties from its new products. Dow actively markets safer alternatives both on its own website as well as on ChemSec Marketplace. The company has no true circular product, process or innovation. Dow 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. Dow is actively reducing the hazardous waste it generates.
The American 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 chemical safety information on its website and is following a credible code of conduct standard.
Dow did not respond to ChemSec’s attempts to communicate around its ChemScore ranking and it does not share any information about what kind of chemicals it produces in regions with low regulatory demands for transparency (e.g. Asia).
Dow does have a circular economy program in place, but it is lacking objective and measurable circular economy targets.
In 2019, the chemical giant was fined almost 100 million USD for damages to natural resources caused by the release of hazardous substances from a company facility in Michigan, USA. According to the violation tracker project of Good Jobs First, Between 2011 and 2020, Dow has paid over 111 million USD in penalties for 64 environmental violations the last ten years.
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