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DSM
About the company
Grade Summary
Last year’s winner, DSM, produces eleven hazardous chemicals, one of which is persistent. On a positive note, 77 percent of the company’s production takes place in the EU and/or the US, where legal requirements for transparency is high. This means that investors have a fairly good picture of DSM’ portfolio – something you cannot say for many of the other companies in ChemScore. There’s no record of DSM being involved in any major controversies, rendering the company all six points in the Lack of Controversies category. The company performs rather well in the other categories as well, losing points for not excluding hazardous chemicals from new products, not producing exclusively sustainable products, and not disclosing information about its production outside of the EU and US. However, the major hurdle standing in the way between DSM and an even better score remains its hazardous product portfolio.
Opportunities for improvement
- DSM’s resin and coating business, with its strict commitment to phase out hazardous chemicals by 2025, has been sold to Covestro. However, in this year’s ChemScore ranking – which takes year 2011-2020 into account – the business is still regarded as a part of DSM. The company’s timed-bound phase-out plans for the resin and coating business is awarded, but for next year’s ranking, we would like to see DSM adapt a time-bound phase-out plans for the whole company.
- DSM is the only company achieving all eight points in the circularity category. It makes us pleased that the company states: “We also see the opportunities for safer products with fewer or no hazardous properties in the circular economy.” We at ChemSec are looking forward to seeing an even broader application of the circular concept – for the entire company.
- A top score in ChemScore can be only achieved by decreasing hazardous substances. In DSM’s case, this means having clear, cut-off hazard criteria for new products, as well as phasing out the persistent chemical and two PIC substances that the company 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.
Category breakdown
DSM produces/uses 11 highly hazardous substances – 10 SIN List chemicals, 2 PICs, and 2 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 33 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.
DSM 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. DSM actively markets safer alternatives both on its own website as well as on ChemSec Marketplace. The company has at least one true circular product, process or innovation. DSM uses biobased resources without occupying extra land or competing with food production. It also sources and treats recycled materials in a sustainable way, which is one of the key elements of a circular economy. DSM is actively reducing the hazardous waste it generates.
The Dutch company does not produce only sustainable products, but it does 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. DSM 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). DSM does have a circular economy program in place, and it has objective and measurable circular economy targets.
Between 2011 and 2020, DSM paid 307,962 USD in fines for 8 environmental violations according to the violation tracker project of Good Jobs First.
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