Grade summary

Formosa ends up third to last in this year’s ranking, largely because so little is known about its chemical portfolio. Only 11 percent of the company’s revenue comes from EU and US markets, where information is available in public records. The company has methods in place to measure energy emissions and water consumption. Yet, we could not find any assessment of the hazardous properties of its products, no circular products or processes, and no use of biobased or recycled feedstock. The company gets rewarded one point in the Management & Transparency category for having a Code of Ethics and a Supplier Code of Conduct. However, Formosa receives zero points in the Lack of Controversies category because of an incident-ridden track record.

How did we come to this score?

Opportunities for improvement 

1. Increase transparency
   Not much is known about Formosa’s production of hazardous chemicals. We have requested that the company disclose information about its chemicals management, but it has not responded to that request. In order to be more transparent, the company should disclose the full list of hazardous chemicals that it produces, including the volume of each of these chemicals as well as its percentage of the total revenue. It would also be wise to specify which chemicals are intended for end products and for intermediate use. Generally speaking, information about chemicals sold in EU and US markets is available through public records, which is not the case in other parts of the world. For that reason, Formosa should make the details of its revenue generated outside of these regions public to ensure chemical transparency and allow for a comprehensive global evaluation.
2. Market sustainable products
   Formosa either does not have or does not market any sustainable products in its portfolio. These products are not restricted to the use of safer chemicals, but include a wide spectrum of environmental sustainability aspects such as, for example, water and energy efficiency. Sustainable products are important not only for environmental reasons, but also in light of future regulation and a growing consumer demand. The company should, therefore, start producing sustainable products or market existing ones.
3. Prevent further controversies
   Formosa has been involved in incidents leading to fatalities or liabilities of over 10 million USD and should re-design or dramatically improve its Environment, Health and Safety strategy. This would help the company to better avoid incidents and make sure that controls – functioning even when human errors occur – are in place. If an accident or spill should happen, it is important that the company identifies the cause and publishes a document on strategies that will be implemented to avoid similar occurrences in the future. It is possible to prevent human suffering and environmental pollution when producing chemicals, but it requires a thorough Environment, Health and Safety system.

Category breakdown