ESG Questionnaires comparison on Chemical Product Stewardship

There are various ESG Questionnairs, but those are not well unified or aligned.
This will be equally applied to Social part, “Responsible on Product”. Which is Product Stewardship function in Chemical industry.
This is not simple to understand what would be the part of “Responsible on Product” because this part is not direcly recognized in common sense.

Root cause of trouble is hidden.

Responsibility is always hidden at “Process of manufacturing” and “Ethics of commercial”. No one would like to guarantee where they are not directly involved.
Therefore, wrong on manufacturing is not appeared on sales department, wrong on sales is not appeard on customer’s site. but the consiquence on “consumer” must have its root cause.

Chemical industry is putting their efforts avoiding blame from consumer, futher than that, improving their reputation through voluntary activities, called “Responsible care”. Their effort may be enough, but only in voluntarily selected area. How can we evaluate entire responsibility on chemical product?

ESG evaluation questionnairs tries to show some points

ESG evaluation on Product Stewardship (Chemical)

1. Hazardous & Risk assessment
Questions are thoroughly specific and technical. ESG evaluators (especially for financial) does not fully understand that has been described.

1) % product by revenue, contain GHS category 1 or 2 human and environmental hazard
    Answer must be showing “Revenue by human and environment hazard product, classified under GHS method”
    PROS : Possible to see the portion of revenue is created by hazardous product
    CONS : Uncertainty of GHS method (especially in mixture classification) leads too much conservativity.
2) % product that have undergone a hazard assessment
    Answer must be showing “Product numbers of progress with hazard assessment”
    PROS : Possible to see the products which are assessed on hazard
    CONS : When Hazard assessment is done without right understanding, there must be hazard underwater.
3) % product, by revenue GHS classified that have hazard assessment
    Answer shows GHS classified products and progress of hazard assessment.
    PROS : possible hazard can be filtered out by GHS, and again filtered by hazard assessment
    CONS : uncertainty of GHS classification (specially on mixture) multiplies to lack of understanding to hazard assessment can lead accident.
4) # or % of product contains REACH SVHC
    Answer shows chemicals purchased and/or sold chemicals listed in SVHC
    PROS : Significant impact by SVHC (Substances Very High Concern) can be monitored
    CONS : Non-significant, but still having impact to human and/environment will not be disclosed.
5) # of chemicals classified as hazard by WHO
    Answer shows WHO listed chemicals treated.
    PROS: Can focus on human health impacting product/chemicals.
    CONS: Environmental impact may not be thoroughly considered. Volume of chemicals may not be disclosed.
6) # of chemicals listed in California PROP 65
    Answer shows any chemicals treated and listed in California Proposition 65.
    PROS: Possible hazardous chemicals to human and environment can be eliminated on consumer side
    CONS: Lack of Scientific approach due to all data are only from out of California. Some “impossible to find alternative” will lose the market.

2. Managing Chemicals of Concerns
Questions are understandable and the procedure existence will make further confident on S in ESG.

1) Detailed strategy and procedures for managing hazardous chemicals
    Strategy and/or Procedures document must be disclosed with right level.
    PROS: Shows that the will by management
    CONS: cannot check if procedures are applied to non-hazardous chemicals or uncertain chemicals.
2) Approach and commitment to developing alternatives to reduce (or avoid) the use of chemicals of concern.
    Answer may contain current chemicals of concern and efforts to make/find alternatives.
    PROS: Can see the possibility of alternate chemicals of concern.
    CONS: alternation may lead more cost/price structure which leads less competitiveness.
3) Narative on the use of alternative assessment tools
     Result of alternative assessment tools needs to be disclosed.
     PROS: Any concerned product can be altered by the tool.
     CONS: Understanding of tool makes the differences on result.
4) Description of how we use “green chemistry” principles to reduce hazard and design safer chemicals
     Green chemistry will be in the report for various viewpoints.
     PROS: All reducing hazard and safer chemicals will be disclosed under “Green chemistry” umbrella.
     CONS: Some “Green chemistry”(eg. recyling, low carbon emission) but not about reducing hazard/safer chemical activities will be shown at one paragraph.
5) # of chemicals of concern
     Chemical list will be listed in Sustainability report, which may seem “non-sustainable”.
     PROS: Readers can recognize that there are chemicals of concern in business.
     CONS: Business or writers does not want to disclose 100% of “non-sustainable” portfolio.
6) # of safer chemical alternatives
     Already altered chemicals will be appeared in the report.
     PROS: can see safer chemicals altered by writer.
     CONS: depends on its use, altered safer chemical does not “enoughly” safer. (eg. BPA to BPS)

3. Product Stewardship related compliance incidents
Accident report is popular in Safety in plant and manufactruing, but not happening between businesses. This incident is always rely on “up-down stream” which sometimes covered by upstream and/or downstream. this sometims lead to see this non-accidental behavior.

1) # of incident about product non-compliance (including volunatry codes)
    Statistics of incident has power to learn from failure.
    PROS: Showing “Value chain incident” so that the relationship management can be shown as well.
    CONS: When only focus on number, that does not lead to learning and improving.

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By scoring method.

GRI is the wide spread method of sustainability report. it covers most of area, but not in detail. that is why the writers prefer to go on GRI.
SASB is focus on “detail” specially in chemical safety. they do almost every part (except incident data disclosure) however, it does not mean that this is the best disclosure method. please see my CONS above.
DJSI is the oldest kind of ESG questionnair with preference from companies with longevity. In the past, DJSI may be right tool for sustainability. Uncertain for ESG.
MSCI is assessing “finalcial portfolio” mainly. Strong at systematical approach in general. Not really fit to chemical business, and not necessary to.

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All questionnaires are having PROS and CONS, you can select what you would like to focus on. GRI is for Sustainability report, SASB is for assessing detail, DJSI is for longevity of business, MSCI is for financial, in my point of view. :)

Chemical Product Stewardship is not fit for “assessing” but guaging ethics of business and management. you can get trend to be perfect, but not necessary at once.

-fin-