Sustainability Research Prepared by Heather Macleod, Reed Business Insight On behalf of Steve Weiss, Genomatica Inc.

August 2014 Job Ref: 5841

Background, Sample & Methodology

2

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.

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 email

Screenshot of the survey

Respondent Profile

4

24%

22%

17%

10%

7%

6%

5%

9%

40%

27%

10%

5%

7%

3%

3%

5%

Europe

North America

South East Asia

Middle East

South America

Africa

North East Asia

Other

2014

2012

Region

Base: all responding (550)

20%

13%

12%

10%

4%

41%

12%

22%

14%

16%

5%

31%

Chemicals distributor

Speciality chemicals manufacturer

Commodity / bulk chemicals manufacturer

Polymers manufacturer

Fine chemicals / intermediates manufacturer

Other

2014

2012

Type of company

Base: all responding (548)

18%

6%

3%

5%

22%

47%

15%

6%

1%

5%

24%

50%

CEO / Chairman / President

Other CXO

Executive vice president

Vice president

General manager

Other

2014

2012

Job title

Base: all responding (537)

62%

9%

12%

6%

11%

50%

9%

18%

8%

16%

$499m or less

$500m to $999m

$1bn to $4.9bn

$5bn to $10bn

Over $10bn

2014

2012

Global revenue

Base: all responding (487)

Average: 2014 $1.2bn 2012 $3.3bn

Main Findings

Whether the company has a sustainability strategy/policy

47%

22%

18%

13%

Yes - there is a sustainability strategy / policy already in place

Yes - we are currently developing a sustainability strategy / policy

No - but we are likely to develop a policy over the next 2 - 3 years

No - there is little interest at the moment

6 Q. Does your company have a sustainability strategy / policy? Base: all responding (1,058)

Sustainable initiatives over the next 5 years

71%

42%

40%

37%

28%

24%

Improve processes (by reducing energy use, waste)

Reduce / eliminate the use of toxic chemicals

Use / increase recycled raw material

Use / increase bio based / renewable content in materials

Develop new products that last longer

Develop biodegradable products

7

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)

Top business priority in terms of sustainability

31%

18%

18%

11%

10%

9%

2%

Promote / market sustainable products

Take an active lead on sustainability issues

Engage sustainability-conscious customers at a business level

Sustainability is not a priority

Ability to respond to questions about your position on sustainability

Raise public profile in sustainability

Other

8 Q. Which of the following best describes your company’s top business priority in terms of sustainability?

Base: all responding (799)

89% see sustainability as a priority

Engagement in sustainable chemistry practices

Yes, 51% No, 34%

Don't know, 15%

9 Q. Is your company already engaged in sustainable chemistry practices?

Base: all responding (789)

Is your company … ?

29%

25%

20%

26%

Primarily a user of chemicals / producer of finished chemical products

Primarily a producer of basic / intermediate chemicals

Chemicals distributor

Other

10 Q. Is your company …..?

Base: all responding (765)

Producers of basic/intermediate chemicals

Company strategy regarding use of renewable feedstocks

12

35%

31%

24%

22%

22%

17%

16%

12%

Currently investing in research and development

Have strategic commitment to the use of renewable feedstocks

Already using some renewable feedstocks in commercial offerings

Actively investing and planning

Currently partnering with other companies

Currently investing in renewables-based production facilities

Little interest at this time

Considering

Q. Which of the following describes your company’s strategy with regard to the use of renewable feedstocks, such as sugars, starches or biomass? Base: producers of chemicals (178)

Expectations of offering more sustainable versions of chemicals

13

31%

14%

27%

13%

16%

Yes, we already are

Yes - within the next year

Yes - within the next 1-2 years

No

Don't know

Q. Do you expect to offer more sustainable versions of chemicals? Base: producers of chemicals (177)

Importance of factors when considering renewable-based production

68%

68%

64%

61%

57%

54%

51%

50%

39%

29%

27%

28%

26%

32%

34%

32%

38%

38%

45%

50%

45%

39%

Customer demand (152)

Safer operations (152)

Minimal impact on downstream products and customers (155)

Reduced operating cash costs of production (154)

Availability of renewable feedstocks (152)

Potential performance advantage (154)

Smaller environmental footprint for chemicals (152)

Strategic flexibility (150)

Reduced capex per round of capacity (152)

Economical to deploy smaller plants (150)

Disconnecting your feedstock from petroleum (152)

Very important Moderately important

14 Q. How important are each of the following factors when considering renewable-based production? Base: producers of chemicals (shown)

Main issues regarding production of bio-based chemicals

15

58%

37%

32%

31%

26%

22%

21%

8%

Reliability of supply of feedstock

Predictability of cost of feedstock

Consistent quality of feedstock

Customer qualification and acceptance

Development of effective supply chain

Customer acceptance of bio-based product

Current and potential legislation

Time for your customers to develop and test new products

Q. What do you see as the main issues around the use of bio-based chemicals? Base: producers of chemicals (154)

Long-term economic advantage in switching to renewable feedstocks

Yes, 43%

No, 28%

Don't know, 29%

16

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)

Reducing exposure to the petroleum-based commodity market

Yes, 51% No, 34%

Don't know, 15%

17

Q. In your opinion, should your company reduce its exposure to the petroleum-based commodity market? Base: producers of chemicals (149)

How the level of interest from customers in sustainably produced chemicals has changed

18

10%

26%

44%

13%

7%

Much greater now

Slightly greater now

Stayed the same

Slightly lower now

Much lower now

Q. In the last year, how has the level of interest your customers have shown in sustainably produced chemicals changed? Base: producers of chemicals (145)

Time from launching a sustainable program to using it at commercial volume

19

7%

21%

26%

18%

8%

3%

17%

Less than a year

1 - 2 years

3 - 4 years

5 - 6 years

7 - 8 years

9 - 10 years

Over 10 years

Q. In your opinion, how long will it take from launching a sustainable chemicals program to using such processes at commercial volume?

Average: 5.2 years

Base: producers of chemicals (146)

Importance of being a front-runner in sustainable chemicals

Very important,

38% Moderately important,

43%

Not important, 19%

20 Q. How important is it for your company to be a front-runner in terms of sustainable chemicals?

Base: producers of chemicals (145)

21

In 62% of cases customers have expressed interest in sustainably produced chemicals

Yes, 62%

No, 38%

Q. Have your customers expressed interest in sustainably produced chemicals? Base: all responding (144)

Chemicals or classes of chemicals interested in producing using renewable feedstocks

22

45%

38%

29%

28%

27%

22%

11%

7%

14%

Specialty chemicals

Polymers

C4s (e.g. butadiene, butanediol etc.)

C3s (e.g. propylene, propanediol etc.)

Polymer intermediates

Aromatics

C6s (e.g. adipic acid etc.)

C5s

Other

Q. Which chemicals or classes of chemicals are you most interested in producing, using renewable feedstocks? Base: producers of chemicals (139)

Applications in which customers are asking for increased renewable content

23

53%

44%

42%

22%

19%

15%

Personal care

Packaging plastics

Engineering plastics

Fabrics / fibers

Rubber

Other

Q. In which applications are your customers asking for increased renewable content?

For 23%, their customers have asked for none of the prompted applications.

Base: excluding ‘none’ (118)

The most effective strategies for promoting the sustainability benefits of products

24

51%

38%

35%

34%

31%

29%

Reference feedstock source

Publish standardised test results (e.g. ASTM) for sustainability attributes

Display third-party marks for sustainability

Describe conversion technology

Publish lifecycle data

List ingredients

Q. Which of the following do you believe are the most effective strategies for promoting the sustainability benefits of your products? Base: producers of chemicals (133)

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

Ways of improving the sustainability of products and processes via suppliers

26

48%

41%

34%

30%

29%

18%

Require information from them on their sustainability practices

Jointly develop approaches to improving sustainability

Already using some renewables based chemicals in commercial offerings

Provide measurable sustainability requirements to suppliers

Include sustainability as a factor on supplier scorecard ratings

Drop suppliers that don't meet sustainability criteria

Q. In which of the following ways do you work with your suppliers to improve the sustainability of your products and processes?

16% do none of these.

Base: excluding ‘none’ (297)

Current strategy with regard to the use of renewables-based chemicals

27

31%

24%

23%

23%

19%

19%

14%

14%

9%

Already using some renewable feedstocks in commercial offerings

Strategic commitment to use of renewables-based chemicals

Currently investing in research and development

Actively investigating and planning

Currently partnering with other companies

Considering

Strategic interest to back-integrate and produce raw material

Little interest at this time

Currently investing in renewables-based production facilities

Q. Which of the following describes your company's strategy with regard to the use of renewables-based chemicals?

Base: users of chemical products/distributors (336)

Expectations of offering more sustainable versions of chemicals

28

33%

17%

25%

9%

15%

Yes, we already are

Yes - within the next year

Yes - within the next 1-2 years

No

Don't know

Q. Do you expect to use more sustainable versions of chemicals to make your products? Base: users of chemical products/distributors (323)

Importance of factors when considering using renewable-based chemicals

74%

61%

60%

55%

53%

52%

46%

22%

31%

31%

39%

41%

43%

44%

Minimal impact on product performance or characteristics

Ability to differentiate your products in the market

Customer demand

Potential performance advantage

Minimal impact on production processes and facilities

Similar costs as existing non-renewable chemicals

Smaller environmental footprint for your products

Very important Moderately important

29 Q. How important are each of the following factors when considering using renewables-based chemicals in your products?

Base: users of chemical products/distributors (shown)

Base:

301

301

303

297

294

301

299

Main issues regarding production of bio-based chemicals

30

43%

38%

38%

34%

29%

26%

25%

19%

Reliability of supply of bio-based chemical

Predictability of cost of bio-based chemical

Consistent quality of bio-based chemical

Customer qualification and acceptance

Customer acceptance of bio-based product

Current and potential future legislation

Time to develop and test new products

Development of effective supply chain

Q. What do you see as the main issues around the use of bio-based chemicals? Base: users of chemical products/distributors (303)

Chemicals or classes of chemicals interested in sourcing renewable versions of

31

52%

48%

26%

24%

24%

18%

12%

8%

10%

Specialty chemicals

Polymers

C3s (e.g. propylene, propanediol etc.)

Aromatics

Polymer intermediates

C4s (e.g. butadiene, butanediol etc.)

C6s (e.g. adipic acid etc.)

C5s

Other

Q. Which chemicals or classes of chemicals are you most interested in sourcing renewable versions to make your products?

Base: users of chemical products/distributors (295)

Applications in which customers are asking for increased renewable content

32

52%

36%

34%

21%

21%

18%

Packaging plastics

Engineering plastics

Personal care

Fabrics / fibers

Rubber

Other

Q. In which applications are your customers asking for increased renewable content?

For 17%, their customers have asked for none of the prompted applications.

Base: excluding ‘none’ (244)

The most effective strategies for promoting the sustainability benefits of products

33

55%

41%

39%

32%

30%

26%

Publish standardised test results (e.g. ASTM) for sustainability

attributes

Reference feedstock source

List ingredients

Publish lifecycle data

Display third-party marks for sustainability

Describe conversion technology

Q. Which of the following do you believe are the most effective strategies for promoting the sustainability benefits of your products?

Base: users of chemical products/distributors (284)

Brand Awareness

Technology developers - first mention 2%+ are shown

35

17%

8%

6%

3%

3%

Q. When you think of technology developers for sustainable chemicals, which companies come to mind? Base: all responding (405)

Technology developers - total mentions 5%+ are shown

36

32%

25%

21%

12%

6%

5%

5%

Q. When you think of technology developers for sustainable chemicals, which companies come to mind? Base: all mentions (405)

Producers - first mention 2%+ are shown

37

18%

9%

7%

5%

Q. When you think of producers for sustainable chemicals, which companies come to mind? Base: all responding (397)

Producers - total mentions 4%+ are shown

38

33%

28%

20%

13%

6%

6%

Base: all responding (397) Q. When you think of producers for sustainable chemicals, which companies come to mind?

Overall impression of companies with regard to sustainability

39

21%

24%

29%

35%

36%

37%

37%

40%

44%

67%

58%

57%

51%

53%

43%

50%

45%

47%

7%

15%

11%

13%

9%

17%

12%

12%

9%

4%

4%

3%

2%

2%

4%

2%

2%

1%

Amyris

Braskem

Solazyme

Novozymes

Bayer

Dow

Genomatica

DuPont

BASF

Very positive Fairly positive Fairly negative Very negative

Q. What is your overall impression of the following companies with regard to sustainability?

Base: those who are aware / with an opinion