Action points 🔍

1. Increase transparency

Although Shin-Etsu has responded to our request for more information regarding the company’s chemicals management, much is still unknown about Shin-Etsu’s production and use of hazardous chemicals. To demonstrate a commitment to transparency, Shin-Etsu should disclose both the share of revenue and production volume of products that are, or contain, hazardous chemicals. This information should cover all operations, including subsidiaries, worldwide. Sabic provides a good example, as it has disclosed its full chemicals portfolio, including production volumes and locations.

2. Map and phase out persistent chemicals

Shin-Etsu is responsible for placing at least five persistent chemicals on the US/EU market, including several PFAS substances. The risks linked to these “forever chemicals” are becoming increasingly clear, not only for human health and the environment, but also for companies and their shareholders. The regulatory tightening, high-profile lawsuits, and rising consumer awareness make business models based on persistent chemicals increasingly risky. Shin-Etsu should, first, identify all uses and the share of total revenue derived from products that are or contain persistent substances. Then, the company should publish a time-bound plan to phase out persistent chemicals from each product group or business segment. Sika and LyondellBasell have both published the share of revenue that is generated from products containing PFAS. 3M has also published those numbers and committed to exiting the manufacture of PFAS by 2025.

3. Develop safer solutions

Shin-Etsu currently lacks a strict policy for limiting hazardous chemicals in its new product development. As a result, both its existing and future product lines are dependent on substances that run the risk of becoming regulated. Therefore, Shin-Etsu may face growing challenges in maintaining profitability in the long term. The company should set a 2030 target for the share of revenue generated by products free from hazardous chemicals and develop a strategy to achieve it. A first step should be to, similarly to Lanxess, publicly state that it will not develop or market new end-products containing more than 0.1% of substances that have the characteristics of a Substance of Very High Concern (SVHCs).