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For the second consecutive year, Finch & Beak has conducted a comprehensive benchmark study focusing on Environmental, Social, and Governance (ESG) practices within the chemical distribution industry. This assessment employed the Portfolio Sustainability Assessment, which consists of two critical dimensions:

1. ESG Vulnerability: This dimension delves into the risks and opportunities inherent in chemical distribution companies, highlighting their capacity to navigate ESG challenges, such as Scope 1-3 emissions, percentage of women in the company, energy and renewable energy consumption.
2. Future Preparedness: This aspect assesses how well chemical distributors are aligning themselves with evolving market dynamics and sustainability requirements. This includes KPIs such as conducting a materiality assessment, having a sustainability strategy in place, being a SBTi member, but also among others, the type of targets that companies have in place.

Therefore, this assessment included the reporting requirements relevant to the chemical distribution industry according to the European Sustainability Reporting Standards (ESRS) and taking into account well-known ESG ratings such as CDP and Corporate Sustainability Assessment (CSA).

Based on the two dimensions above, the companies analyzed are ranked.

This study is focused on the 34 largest European chemical distributors, selected based on their revenue. The chemical distribution industry operates within complex supply chains involving manufacturers, distributors, and end-users. Effectively managing these supply chains while aligning with sustainability goals is a formidable challenge. Consequently, it is essential for these companies to seamlessly integrate ESG (Environmental, Social, and Governance) considerations into their operations, with a growing emphasis on developing and offering sustainable products within the sector.

Finch & Beak's benchmark study has unveiled a significant gap in the preparedness of the chemical distributors covered in this research for impending regulatory ESG reporting requirements. The results highlight that only 44% of the companies disclose a materiality matrix. However, not all of these matrices align with the concept of the double materiality assessment, as required by ESRS. A materiality matrix should form the foundation of a company's ESG strategy, allowing them to prioritize ESG issues based on their business impact (inside-out/ outside-in) and stakeholder relevance. The absence of this foundation hinders companies from establishing a robust ESG strategy.

Furthermore, despite the industry's claim that carbon footprint reduction is a top focus area, only 26% of the companies provide information on emissions from all three Scopes.

This benchmark study illuminates the urgent need for chemical distributors to fortify their ESG readiness. As you embark on our ESG-themed escape room adventure, you will gain deeper insights and knowledge, ultimately empowering you to navigate the evolving landscape of sustainability with confidence and competence.

In the download, you will find more information about the Virtual Online Escape Room, how to play (recommended 2-4 people) and what you will learn.

Rally your colleagues, and Click Here to dive into an adventure! Unlock the secrets of our research and forge the path to a more sustainable future.