In a surprising development, several of Europe’s largest chemical companies claim that hazardous substances are not relevant enough to include in their mandatory sustainability reporting under the EU’s new Corporate Sustainability Reporting Directive (CSRD).
The finding comes from a new analysis published today by pollution watchdog ChemSec, which has compiled and compared the CSRD reports from the companies ranked in this year’s ChemScore. This marks the first third-party evaluation of how the chemical sector is handling the EU’s most ambitious sustainability reporting framework to date.
“We wanted to understand what the chemical industry actually reports under CSRD, who is doing a credible job, and who is avoiding the issue. Our goal is to highlight best practices and help companies improve”, says Sonja Haider, Head of Sustainable Finance at ChemSec.
Hazardous substances dismissed as “not material” by some
Under CSRD, companies must conduct a double materiality assessment — a process that determines which environmental, social, and governance topics are significant enough to report on. Yet ChemSec’s analysis shows that only three of the 13 companies assessed (Bayer, Lanxess, Merck) report hazardous substances as material to their business.
Despite being major producers of toxic substances, the remaining companies either explicitly claim that hazardous chemicals are not material, omit the topic entirely, or do not publish in the legally proposed way. These companies are: AkzoNobel, Arkema, BASF, Evonik, Henkel, Solvay, Syensqo, TotalEnergies, Umicore, and Yara.
“I find it absurd that chemical companies can argue that hazardous chemicals aren’t material to their environmental impact”
Sonja Haider, Head of Sustainable Finance at ChemSec
“I find it a bit absurd that chemical companies can argue that their production and use of hazardous chemicals aren’t material to their environmental impact”, says Ms Haider.
A closer look at pollution reporting
CSRD contains around 500 data points, but ChemSec focused on pollution-related disclosures — the ones most relevant to chemical producers.
Out of the 40 chemical companies ranked in the sustainability index, only the 13 EU-headquartered companies in ChemScore reported this year. Non-EU companies operating in Europe will be phased into CSRD reporting beginning in 2028.
The full compilation is now available on ChemScore, ChemSec’s global sustainability index that ranks the top 40 chemical companies on their chemical footprint.