Global chemical companies could gain about one billion Euro ($1.4 billion) in cash flow if they increase their sustainability performance, according to a new study that evaluates the performance of nine global chemical companies through 2004 to 2007.
The study, “Sustainable Value Creation by Chemical Companies” (PDF), published by an European research team including academics from the Queen’s University Management School in Belfast, used a “Sustainable Value” approach to assess corporate sustainability performance based on the value created with the resources used by the companies. This method takes into account economic capital as well as environmental and social resources.
The study found that leading chemical companies such as Air Liquide and BASF use their resources up to five times more efficiently than their competitors, creating a sustainable value of about one billion Euro ($1.4 billion) in 2007. Researchers say this directly translates into about one billion Euro more in cash flow than competitors would have created with the same amount of resources.
BASF also was ranked one of the 100 most sustainable companies in 2009.
Dow Chemical was ranked at the bottom of the report card, using resources only half as efficiently as its competitors on average. The study found that the Dow created a negative sustainable value of -2.2 billion Euro ($2.9 billion). DSM and AKZO also did not generate a positive sustainable value in the years assessed.
Dow Chemical announced in January that it is saving about $4 million a year in reduced energy, maintenance and water costs, as well as reduced emissions, through a variety of efforts. So far, the company has saved an estimated 75 billion gallons of water.
The study evaluated the companies’ total assets, water use, chemical oxygen demand of waste water, hazardous waste creation, emissions of greenhouse gases and volatile organic compounds, as well as acidification potential. Social indicators were also included in the assessment.