NOT CURRENT YEAR
In this year’s ranking, LG Chem has doubled the number of hazardous substances it produces or uses, from 9 to 18. Last year, the company had no known persistent chemicals in its portfolio. Now, it has five – one of which is a globally banned POP (Persistent Organic Pollutant). This problematic portfolio, combined with the fact that there is no available data for 65 percent of the company’s production, results in a meager three points in the Product Portfolio category. LG Chem gets eight points in the Development of Safer Chemicals category for its environmental and hazard assessment systems and for offering biobased and biodegradable products. The company is one of few outside of Europe that uses the EU taxonomy as a guide for developing sustainability standards and indicators. LG Chem gets zero points in the Lack of Controversies category, in part for a toxic gas leak at one of its subsidiary’s plants on the Indian east coast in 2020 that killed 15 people and injured hundreds.
Opportunities for improvement
- Map and phase out persistent chemicals
Last year, LG Chem did not use or produce any persistent chemicals. This year, the company has five persistent chemicals in its portfolio, one of which is a globally restricted POP, Persistent Organic Pollutant. This development is highly problematic, since such “forever chemicals” do not break down in nature. Instead, these chemicals — which are linked to many negative health effects — build up over time. The consequences of these substances are becoming increasingly detrimental, not only for human health and the environment but also for investors. Investors risk stranded assets now that the regulatory speed is accelerating, and are also exposed to significant liability risks since more chemical companies are being sued for contamination. The company should therefore make sure to identify all uses, and publish volumes and percentages of total revenue of its persistent substances so that this is well understood by investors and other stakeholders. The company should also publish a time-bound phase-out plan of each persistent chemical and an annual progression report to go with it.
- Reduce hazardous portfolio
Scientists agree that chemical pollution has crossed a planetary boundary and become an urgent global problem. This threatens the stability of global ecosystems upon which humanity depends, by damaging the biological and physical processes that underpin all life. Unfortunately, LG Chem has doubled its portfolio of hazardous chemicals. A paramount improvement point for the company is to reduce this number. LG Chem should therefore make sure to identify all uses, and publish volumes and percentages of the total revenue of its hazardous substances. It should also publish a reduction road map of each hazardous chemical and an annual progression report. If the company continues to produce any hazardous substances, it needs to present a rationale for its essential use, motivates the production volume, and state how much money it spends on research and development to find a safer alternative.
- Prevent further controversies
LG Chem has been involved in several scandals and incidents during the last decade 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 LG Chem 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.