The global chemical sector is an essential centerpiece of modern economies, touching everything from fertilizers and fuels to construction materials and consumer products. The sector is increasingly under pressure for its significant environmental footprint. Consumers, regulators, investors, and other stakeholders are asking if it is possible to reap the same benefits from the sector, only with a lighter, more sustainable impact.

Across the broad and diverse chemical sector, every company will respond to this shift in its own way, depending on its market position, portfolio, capabilities, ambitions, and the regulatory context in which it operates. While some companies may take a more defensive stance, others may see the shift as an opportunity for growth in new markets and existing product lines. Many of these companies are already responding with bold and innovative approaches to new products and new ways to operate with the following goals in mind:

• Greener production: Reduce scope 1 and 2 emissions by switching to clean or renewable energy, or by incorporating carbon capture and sequestration in production operations. Design products that use less materials or make products that are inherently easier to recycle—for example, by decomplexifying plastic packaging.
• Greener supply chain: Reduce scope 3 emissions by encouraging suppliers to decarbonize their own inputs and operations, and make changes in how employees and downstream users of products operate.
• Green products: Switch to bio-based or recycled feedstock and design more circular products (biodegradable or recyclable) to reduce environmental impact.
• Green enablers: Support the energy transition and broader sustainability goals to reduce overall impact, even if specific products are not themselves greener (e.g., by supporting efforts in more effective waste management and recycling techniques such as chemical recycling).

New business models: Identify where the company is particularly good in some aspect of sustainability, and begin to offer that service to others.

While many companies are investing in sustainability, not all are capturing new value from these efforts. The leaders making these investments pay off define their ambitions clearly, gain a deep understanding of their customers’ needs, and form partnerships that help put their plans into action.

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