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Wanhua Chemical
About the company
Grade Summary
Wanhua Chemical Group, one of ChemScore’s new additions, makes out the rankings bottom three along with Sinopec Shanghai Petrochemical and Formosa, scoring a total of 4 points. The 15 highly hazardous chemicals that the company produces is one reason for the poor score. But there is also the fact that there is no available data for 75 percent of Wanhua Chemical Group’s production, which takes place outside of the EU and US, leaving the company without a single point in the first category. This low transparency is a big issue for investors as it makes it hard to do a proper evaluation of the risks connected to the product portfolio. Like all companies in the ranking, Wanhua Chemical Group has been encouraged to share information about its production, but it has declined to do so. The company’s performance in the remaining categories is weak across the board – especially in the Lack of Controversies category, where it scores 0 points due to a fatal incident back in 2016.
Opportunities for improvement
- Wanhua Chemical should reduce its hazardous portfolio, which currently consists of 15 banned, severely restricted or SIN-listed substances. Quite many, considering we only have data for 25 percent of the company’s total production. 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 two PIC substances that Wanhua Chemical 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.
- Along with its Chinese peer Sinopec Shanghai Petrochemical and Taiwanese Formosa Chemicals & Fibre Corporation, Wanhua Chemical is the taillight of the ChemScore ranking. The company has established a chemical safety management and hazard information system, but lacks a pro-active strategy to minimize, phase-out and design-out hazardous chemicals. In addition, Wanhua Chemical doesn’t present safer alternatives on any of its public platforms.
- The deadly explosion in one of Wanhua Chemical’s Chinese production plants in 2016, killing four people, should result in a thorough revision and investments in safety measures and employee training.
Category breakdown
Wanhua Chemical produces/uses 15 highly hazardous substances – 15 SIN List chemicals, 2 PICs, and 5 HHPs – 5 of which are included on the EU’s REACH Candidate List. 3 of these highly hazardous substances are either banned or severely restricted, with set dates when production needs to cease (3 Authorisation List substances, and no POPs). The company produces no persistent chemicals.
Please note that there is no available data for the 75 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.
Wanhua Chemical 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. Nor does it actively market safer alternatives on its own website or on ChemSec Marketplace. The company has no true circular product, process or innovation. Wanhua Chemical does not use biobased resources. Nor does it source and treat recycled materials in a sustainable way, which is one of the key elements of a circular economy. Wanhua Chemical is not actively reducing the hazardous waste it generates.
The Chinese company does not produce only sustainable products. Nor does it have a phase-out strategy for hazardous substances that go beyond regulatory compliance. It shares chemical safety information on its website, but lacks a credible code of conduct standard. Wanhua Chemical did not respond to ChemSec’s attempts to communicate around its ChemScore ranking. Nor does it share any information about what kind of chemicals it produces in regions with low regulatory demands for transparency (e.g. Asia). Wanhua Chemical does not have a circular economy program in place, thus lacking objective and measurable circular economy targets.
The controversies surrounding Wanhua Chemical over the past ten years may not have been numerous, but they have been fatal and created headlines. In September 2016, an explosion at a Wanhua Chemical plant in Yantai, China, killed four people and injured another four. The company was fined approximately 125,000 USD for the incident.
Download Controversies Wanhua Chemical (PDF, 99 KB)How did we come to this score?
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