Corporate social responsibility (CSR) reporting is becoming an increasingly important tool for businesses to demonstrate openness and honesty. Carbon disclosure methodologies help to show stakeholders that companies are taking their environmental responsibilities seriously and making considerable efforts to meet government targets aimed at promoting sustainability and combating climate change.

CSR reporting covers a wide range of aspects of a company’s actions and policies, and a part of this is revealing their carbon footprint. This includes making data available relating to energy usage and other carbon-related expenditures. Gathering this data into one place allows companies to communicate their efforts and compare with others.

Europe’s chemical industry operates in a highly competitive global market, and it remains a world leader in know-how, R&D and production. Preserving and developing these unique skills are necessities in the race to tackle the global challenge of climate change, and being able to report on these abilities is a vital element to achieving the support and trust of stakeholders.

Chemical companies in particular are exposed to high energy costs, particularly commodity polymers and inorganic chemicals. The majority of these companies within the chemicals industry are realising the importance of monitoring and reducing their carbon emissions – not just because legislation is forcing them to, but because they are realising the significant cost implications of cutting energy use. These surging costs are resulting in many companies looking for reliable and effective energy saving products.

However, over the passed 20 years the chemicals industry has already made significant inroads in energy efficiency. Figures from the European Chemistry Industry Council (Cefic) show that although production in the chemical industry has increased by more than 50percent since 1990, greenhouse gas emissions have fallen by more than 20percent. With a reduction of 96million tonnes of carbon dioxide equivalents since 1990, the chemical industry alone has achieved nearly one third of the EU commitment under the Kyoto Protocol to reduce greenhouse gas emissions by eightpercent between 1990 and 2012. Now stricter regulations are forcing the industry to tighten its belts even further – and the quest to find ever-more innovative energy efficient products is more frantic than ever.

The current legislation-led aim within the industry is to achieve a 14percent improvement in energy efficiency, a 20percent reduction in water usage per tonne of production and a 25percent reduction in hazardous waste per tonne of production by 2010. The goal is based on the sector’s Climate Change Agreement (CCA) target, as agreed with DEFRA. The CCA targets were reviewed with DEFRA in 2004 and strengthened from the 2010 milestone’s previous level of 11percent. The CCA targets are biennial and apply to even years through to 2010. As a consequence progress is reported every two years, with the next data collection and reporting due to take place soon, for performance in 2006. 2004 results showed that the chemical sector had improved energy efficiency by 14percent from the year 2000. This is equivalent to an annual saving of around 2.5million tonnes of carbon dioxide over potential emissions had they operated at base year efficiencies.

Energy fears

One of the big fears within the chemical industry is that new legislation will push energy prices even higher – particularly the price of natural gas. Depending on the design of the policy instruments used to restrict emissions, companies could potentially face increased compliance costs from purchasing large quantities of expensive emissions credits, from implementing emissions control technology or from upgrading manufacturing facilities to meet standards.

Also of concern is the potential for conflicting or duplicate regulations that could result from a ‘patchwork quilt’ of regulations across the globe. Cefic stated earlier this year that, while fully supporting the EU goals to cut carbon emissions, the measures proposed to achieve truly competitive energy, the emphasis on energy efficiency and on security of supply, and the proposal for a European Strategic Energy Technology Plan in 2007, it feels that the many good proposals to build an effective European Energy Policy are countered by the Commission’s proposal for further unilateral carbon dioxide reduction targets by 2020. Many within the industry believe that further strong carbon dioxide reduction targets that have not been adopted by other major emitting nations will weaken the European industry’s competitiveness within the global business environment without achieving effective environmental benefits.

Those organisations that have already made and continue to make significant efforts towards cutting their emissions are often in the position where they feel they are not being recognised for their actions – and the industry as a whole is not always acknowledged as having made the impact that it has upon carbon emissions. So the introduction of organisations dedicated to disclosing data emission-related data has been welcomed by the chemical sector.

The Carbon Disclosure Project (CDP) has become the gold standard in carbon reporting and its website is the largest repository of corporate greenhouse gas emissions data in the world. Thousands of companies have chosen to reveal the details of their carbon data online in the form of a response to a standard questionnaire.

CDP provides a co-ordinating secretariat for institutional investors with a combined US$41trillion of assets under management. On their behalf it seeks information on the business risks and opportunities presented by climate change and greenhouse gas emissions data from the world’s largest companies: 2400 in 2007.

An example of an organisation disclosing its footprint is chemical company Dow, which supplies products too over 175 countries. With annual sales of US$46billion, Dow employs 42000 people and is among the FT500. In 2006, for example, Dow spent nearly US$22billion on energy and hydrocarbon feed stocks.

Dow was included in the ‘Climate Leadership Index’ of a recently released CDP report where it was named ‘best in class’ due to its approach to climate change. The company has described itself as in the ideal position to innovate concepts that lead to energy alternatives, less carbon-intensive raw material sources, and other solutions not yet imagined.

Holliday Pigments is another chemicals company that believes sustainability is vital to its ongoing success. Pursuing a comprehensive sustainable development policy is one way that the UK company feels it can fight to stay ahead of European competition as well as respond to increasingly stringent legislation and protests from green pressure groups. This company was one of the first of its kind to appoint a full time sustainable development manager whose remit was to develop environmental policies and in particular focus on all elements of energy efficiency.

The most significant impact of the programme has been the reduction in sulphur dioxide emissions from 7000t/y to less than 100t/y. This has been achieved by an £11million investment in a flue gas desulphurisation (FGD) unit. Energy efficiency has been a key area of activity and has resulted in plant modifications, which have enabled heat recovery to the tune of £50000 per year to be made.

Being able to use corporate reporting to promote sustainable actions is an attractive opportunity for those who are spending considerable time and money on installing products and practices that cut carbon emissions.

No stranger to innovation itself, there is an ever-growing interest within the chemicals sector in innovative solutions that offer significant energy savings – once all the obvious processes have been put in place, there is a demand for something more – and there are an increasing number of products out there that can achieve savings beyond the norm.

Maxsys Limited produces an innovative energy saving product called the Fuel+ system. This applies a magnetic field to maximise fuel efficiency and guarantees users a minimum fivepercent saving on energy costs. v

Paul Finnegan is sales director of Maxsys Limited, Walsall, UK. www.maxsysltd.com