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Lanxess
About the company
Grade Summary
Lanxess has a very large production of hazardous chemicals – surpassed only by BASF in the ChemScore ranking. Data tells us that it is producing 88 highly hazardous chemicals, including 17 persistent chemicals, which leaves the company without a single point in the first category. And these numbers concern just over half of Lanxess production, taking place in the EU and US, where reliable data is available. In the other categories, the company places itself very much in the middle; it doesn’t really excel in anything, but is not among the worst performers either. Despite not being involved in any serious accidents over the past ten years, Lanxess is only awarded three points in the Lack of Controversies category, due to pollution scandals and huge penalty fines.
Opportunities for improvement
- Lanxess currently has an alarming 17 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 Lanxess prioritises phasing out persistent chemicals from its product portfolio.
- The company should also reduce its hazardous portfolio overall, which currently consists of as many as 88 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 15 PIC substances that Lanxess 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 recommend that Lanxess re-thinks its mindset regarding hazardous substances and acknowledges the far-reaching negative impact of chemical pollution. We need clean, hazard-free material streams – not a continuous pollution cycle – especially in a circular economy. Creating a polystyrene loop sounds good in theory, but will also lead to the re-circulation of hazardous, brominated flame retardants.
Category breakdown
Lanxess produces/uses 88 highly hazardous substances – 81 SIN List chemicals, 15 PICs, and 10 HHPs – 22 of which are included on the EU’s REACH Candidate List. 7 of these highly hazardous substances are either banned or severely restricted, with set dates when production needs to cease (6 Authorisation List substances, and 1 POP). The company produces 17 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 43 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.
Lanxess 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. However, it does not exclude substances with toxic properties from its new products. Lanxess actively markets safer alternatives on ChemSec Marketplace, but not on its own website. The company has no true circular product, process or innovation. Lanxess use biobased resources. However, the company uses them to produce hazardous materials. It does, however, source and treat recycled materials in a sustainable way, which is one of the key elements of a circular economy. Lanxess is actively reducing the hazardous waste it generates.
The German company does not produce only sustainable products. Nor does it have a phase-out strategy for hazardous substances that go beyond regulatory compliance. It does not share chemical safety information on its website, but is following a credible code of conduct standard. Lanxess 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). Lanxess has a circular economy program in place, but it is lacking objective and measurable circular economy targets.
Lanxess and its subsidiaries have been involved in quite a few incidents this past decade, though none have resulted in deaths or serious injury. In October 2020, it was announced that the North Charleston area, South Carolina, will be tested for ethylene oxide, a toxic air pollutant known to cause cancer, using a new EPA grant. A report pointed to the Lanxess chemical plant on King Street Extension as a potential source. Lanxess and its subsidiaries have paid nearly 4.5 million USD in penalties for 28 environmental violations over the last ten years, according to the Violation Tracker at Good Jobs First.
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