Sustainability Research Prepared by Heather Macleod, Reed Business - PowerPoint PPT Presentation

Sustainability Research Prepared by Heather Macleod, Reed Business Insight On behalf of Steve Weiss , Genomatica Inc. August 2014 Job Ref: 5841

Background, Sample & Methodology î Research was undertaken in December 2012 amongst professionals working in the chemicals industry. The results were featured in an article in ICIS Chemical News. In the summer of 2014, there was a requirement to repeat this research, with the results appearing in ICIS Chemical News in September. î In order to provide a robust sample for the study, research was conducted via a quantitative online questionnaire amongst professionals working in the chemicals industry. î In total 958 respondents participated in the survey. Screenshot of the email î A co-branded email was sent to a sample drawn from the ICIS database inviting potential respondents to take part in the online questionnaire. î The fieldwork was conducted in July 2014. î Results are shown on those answering each question. Screenshot of the survey 2

Respondent Profile

Region Job title 24% 18% CEO / Chairman / Europe 40% President 15% 22% North America 6% 27% Other CXO 6% 17% South East Asia 10% 3% Executive vice president 2014 10% 1% Middle East 2014 5% 5% 2012 7% Vice president 2012 South America 5% 7% 22% 6% Africa General manager 3% 24% 5% 47% North East Asia 3% Other 50% Base: all responding (537) 9% Other 5% Base: all responding (550) Global revenue Type of company 62% $499m or less 50% 20% Chemicals distributor 9% 12% $500m to $999m 9% 13% Speciality chemicals 2014 manufacturer 22% 12% $1bn to $4.9bn 18% 2012 12% Commodity / bulk chemicals 2014 manufacturer 14% 6% $5bn to $10bn 10% 2012 8% Polymers manufacturer Average: 16% 11% 2014 $1.2bn 4% Fine chemicals / intermediates Over $10bn 16% 2012 $3.3bn manufacturer 5% 41% Other 31% Base: all responding (487) Base: all responding (548) 4

Main Findings

Whether the company has a sustainability strategy/policy Yes - there is a sustainability strategy / policy already 47% in place Yes - we are currently developing a sustainability 22% strategy / policy No - but we are likely to develop a policy over the next 18% 2 - 3 years No - there is little interest at the moment 13% Base: all responding (1,058) Q. Does your company have a sustainability strategy / policy? 6

Sustainable initiatives over the next 5 years Improve processes (by reducing energy use, waste) 71% Reduce / eliminate the use of toxic chemicals 42% Use / increase recycled raw material 40% Use / increase bio based / renewable content in 37% materials Develop new products that last longer 28% Develop biodegradable products 24% 9% have no sustainable initiatives over the next 5 years Q. What are the sustainable initiatives within your organisation over the next 5 years? Base: excluding ‘none’ (806) 7

Top business priority in terms of sustainability Promote / market sustainable products 31% Take an active lead on sustainability issues 18% Engage sustainability-conscious customers at a 18% business level Sustainability is not a priority 11% Ability to respond to questions about your position on 10% sustainability Raise public profile in sustainability 9% Other 2% 89% see sustainability as a priority Q. Which of the following best describes your company’s top business priority in terms of sustainability? Base: all responding (799) 8

Engagement in sustainable chemistry practices Don't know, 15% Yes, 51% No, 34% Q. Is your company already engaged in sustainable chemistry practices? Base: all responding (789) 9

Is your company … ? Primarily a user of chemicals / producer of 29% finished chemical products Primarily a producer of basic / intermediate 25% chemicals Chemicals distributor 20% Other 26% Q. Is your company …..? Base: all responding (765) 10

Producers of basic/intermediate chemicals

Company strategy regarding use of renewable feedstocks Currently investing in research and 35% development Have strategic commitment to the use of 31% renewable feedstocks Already using some renewable feedstocks in 24% commercial offerings Actively investing and planning 22% Currently partnering with other companies 22% Currently investing in renewables-based 17% production facilities Little interest at this time 16% Considering 12% Q. Which of the following describes your company’s strategy with regard to the use of Base: producers of chemicals (178) renewable feedstocks, such as sugars, starches or biomass? 12

Expectations of offering more sustainable versions of chemicals Yes, we already are 31% Yes - within the next year 14% Yes - within the next 1-2 years 27% No 13% Don't know 16% Q. Do you expect to offer more sustainable versions of chemicals? Base: producers of chemicals (177) 13

Importance of factors when considering renewable-based production Very important Moderately important Customer demand (152) 68% 28% Safer operations (152) 68% 26% Minimal impact on downstream products and customers (155) 64% 32% Reduced operating cash costs of production (154) 61% 34% Availability of renewable feedstocks (152) 57% 32% Potential performance advantage (154) 54% 38% Smaller environmental footprint for chemicals (152) 51% 38% Strategic flexibility (150) 50% 45% Reduced capex per round of capacity (152) 39% 50% Economical to deploy smaller plants (150) 29% 45% Disconnecting your feedstock from petroleum (152) 27% 39% Q. How important are each of the following factors when considering renewable-based production? Base: producers of chemicals (shown) 14

Main issues regarding production of bio-based chemicals Reliability of supply of feedstock 58% Predictability of cost of feedstock 37% Consistent quality of feedstock 32% Customer qualification and acceptance 31% Development of effective supply chain 26% Customer acceptance of bio-based product 22% Current and potential legislation 21% Time for your customers to develop and test 8% new products Q. What do you see as the main issues around the use of bio-based chemicals? Base: producers of chemicals (154) 15

Long-term economic advantage in switching to renewable feedstocks Don't know, 29% Yes, 43% No, 28% Q. In your opinion, will there be long term economic advantage to you in switching chemical manufacturing process inputs to renewable feedstocks, like sugars, starches or biomass? Base: producers of chemicals (150) 16

Reducing exposure to the petroleum-based commodity market Don't know, 15% Yes, 51% No, 34% Q. In your opinion, should your company reduce its exposure to the petroleum-based commodity market? Base: producers of chemicals (149) 17

How the level of interest from customers in sustainably produced chemicals has changed Much greater now 10% Slightly greater now 26% Stayed the same 44% Slightly lower now 13% Much lower now 7% Q. In the last year, how has the level of interest your customers have shown in sustainably produced Base: producers of chemicals (145) chemicals changed? 18

Time from launching a sustainable program to using it at commercial volume Less than a year 7% 1 - 2 years 21% 3 - 4 years 26% 5 - 6 years 18% 7 - 8 years 8% Average: 5.2 years 9 - 10 years 3% Over 10 years 17% Q. In your opinion, how long will it take from launching a sustainable chemicals program to using Base: producers of chemicals (146) such processes at commercial volume? 19

Importance of being a front-runner in sustainable chemicals Not important, 19% Very important, 38% Moderately important, 43% Q. How important is it for your company to be a front-runner in terms of sustainable chemicals? Base: producers of chemicals (145) 20

In 62% of cases customers have expressed interest in sustainably produced chemicals No, 38% Yes, 62% Q. Have your customers expressed interest in sustainably produced chemicals? Base: all responding (144) 21

Chemicals or classes of chemicals interested in producing using renewable feedstocks Specialty chemicals 45% Polymers 38% C4s (e.g. butadiene, butanediol 29% etc.) C3s (e.g. propylene, propanediol 28% etc.) Polymer intermediates 27% Aromatics 22% C6s (e.g. adipic acid etc.) 11% C5s 7% Other 14% Q. Which chemicals or classes of chemicals are you most interested in producing, using Base: producers of chemicals (139) renewable feedstocks? 22

Applications in which customers are asking for increased renewable content Personal care 53% Packaging plastics 44% Engineering plastics 42% Fabrics / fibers 22% Rubber 19% For 23% , their customers have asked for none of the prompted applications. Other 15% Q. In which applications are your customers asking for increased renewable content? Base: excluding ‘none’ (118) 23

The most effective strategies for promoting the sustainability benefits of products Reference feedstock source 51% Publish standardised test results (e.g. 38% ASTM) for sustainability attributes Display third-party marks for 35% sustainability Describe conversion technology 34% Publish lifecycle data 31% List ingredients 29% Q. Which of the following do you believe are the most effective strategies for promoting the Base: producers of chemicals (133) sustainability benefits of your products? 24

Users of chemicals/producers of finished chemical products & chemical distributors