Over the course of four years, from 2020 to the present, DOW’s sustainability performance has only seen modest gains. Its ranking has inched up from 10 to 12 points, maintaining a consistent D+ rating.
Its portfolio of hazardous chemicals has expanded during 2023, and now sits at 77 SIN List substances (compared to 73 last year) and 12 persistent chemicals (compared to seven last year). However, it’s worth noting that less than half of its sales are publicly registered in EU/US markets, impacting transparency. In category 2, Dow states it does assess all products for human and environmental toxicity, but there remains a significant gap in the design-out of hazardous chemicals in newly developed products.
In conclusion, DOW has made modest strides in its sustainability efforts over the past four years. While some areas show marginal improvement, there is substantial work to be done, particularly in the transparent disclosure of hazardous substances and the active promotion of sustainable products.
Opportunities for improvement
- Map and phase out persistent chemicals
Dow produces or uses at least 12 persistent chemicals, including one persistent organic pollutant (POP). 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. Dow 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.
- 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 Dow has 77 hazardous chemicals in its product portfolio, a key improvement point for the company is to reduce this number. Dow 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.
- Market safer alternatives
Dow does not have any safer alternatives evaluated by independent third parties in its product portfolio. Safer alternatives replace the use of hazardous substances and are crucial in order to put an end to chemical pollution. The company should, therefore, start producing safer alternatives or market existing ones on an independent third-party platform. A good place to advertise is ChemSec’s Marketplace, where buyers and suppliers can find and market safer alternatives.