Research among chemicals industry professionals to measure attitudes towards sustainability

Prepared by:Heather Macleod, Reed Business Insight

On behalf of:Joey Marquart, Genomatica

Sustainability Research

June 2009

Reference Number: 5004

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56%

53%

38%

The environmental qualities ofend-products

The carbon footprint of internalprocesses

The energy consumptionassociation with external

processes

Company definition of sustainability

Base: All respondents (977)

‘Which of the following describes how your company defines sustainability?’

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67%

65%

45%

27%

27%

45%

6%

8%

10%

The environmental qualities ofend products (859)

The carbon footprint of internalprocesses (822)

The energy consumptionassociation with external

processes (809)

Very important Somewhat important Not at all important

Importance of sustainability factors

Base: All respondents (individual base sizes shown)

‘Please rank each of the following in terms of importance towards sustainability as it applies to your company?’

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46%

24%

10%

7%

5%

7%

Company wide priority

Management priority

Business unit-specific

Espoused mostly by a few "green"advocates within company

PR priority only

Not a priority

Company’s sustainability priorities

Base: All respondents (863)

- Manufacturing – 5 mentions- Oil – 5 mentions- Chemicals – 3 mentions

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

53%

39%

34%

30%

24%

18%

16%

15%

12%

20%

Raw materials sourcing/ pricing

Strategic cost reductions

Maximising cash flow

New product development

Energy usage/ pricing

Improving health and safetyperformance

Reducing enivornmental impact ofoperations

Managing inventory

Increasing shareholder value

Reducing environmental impact ofproducts

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Most critical short-term priorities

Base: All respondents (849)

‘Which of the following are the most critical short-term priorities for your company?’

44%

34%

34%

32%

25%

23%

21%

19%

9%

23%

New product development

Increasing shareholder value

Raw materials sourcing/ pricing

Strategic cost reductions

Reducing enivornmental impact ofoperations

Maximising cash flow

Improving health and safetyperformance

Energy usage/ pricing

Reducing environmental impact ofproducts

Managing inventory

6

Most critical long-term priorities

Base: All respondents (825)

‘Which of the following are the most critical long-term priorities for your company?’

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Company engagement with sustainable chemistry practices

Base: All respondents (836)

No 25%

Yes57%

Don't know18%

‘Is your company already engaged in sustainable chemistry practices?’

‘Is your company maintaining the commitment to sustainable chemistry practices during the current

economic downturn?’

Base: Those who are already engaged in sustainable chemistry practices (468)

Yes 93%No 4%Don’t know 3%

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Whether an economic advantage to switching chemical manufacturing process inputs to renewable feedstocks

Base: All respondents (825)

No 31%

Yes46%

Don't know23%

‘In your opinion, is there an economic advantage to switching chemical manufacturing process inputs to renewable feedstocks, like sugars, starches or biomass?’

9

Whether companies should reduce exposure to petroleum-based commodity market

Base: All respondents (821)

No 30%

Yes57%

Don't know13%

‘In your opinion, should your company reduce its exposure to the petroleum-based commodity market?’

10

The future of sustainable chemical processes within company

Base: All respondents (804)

‘What of the following best describes your view of sustainable chemical processes within your company in the future?’

43%

31%

6%

9%

11%

Will be a priority in the long-term

Is already a priority

Is a priority in the short-term

Will not be a priority

Not sure

58%

44%

36%

26%

Cost

Technical capabilities

Adapting infrastructure andprocesses

Attitude/ awareness of internalmanagement

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Most prohibitive component of a sustainable chemical program

Base: All respondents (800)

‘What do you perceive as the most prohibitive component of a sustainable chemical program?’

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Length of time to launch a sustainable programme to using it at a commercial volume

Base: All respondents (787)

‘In your opinion, how long would it take from launching a sustainable program to using such processes at commercial volume?’

39%

47%

10%

4%

Less than 5 years

5-10 years

10-15 years

More than 15 years

Average: 6.5 years

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Base: All respondents (796)

Not at all important (1)7%

Important (3)41%

Very important (4)30%

Not very important (2)22%

Importance to company being a sustainable chemicalsfront-runner

‘How important is it for your company to be a front-runner in terms of sustainable chemicals?’

Mean score: 2.9

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Customers’ interest in sustainably produced chemicals

Base: All respondents (782)

No43%

Yes57%

‘Have your customers expressed interest in sustainably produced chemicals?’

17%

12%

11%

7%

5%

4%

4%

3%

3%

3%

4%

BASF

Dow

DuPont

Cargill

BP

Bayer

ADM

Nature Works

Shell

Clariant

Proctor & Gamble

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Spontaneous awareness of sustainable chemical companies (mentions 3%+)

Base: All respondents (304)

‘When you think of sustainable chemicals, which companies come to mind?’

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Base: All respondents (771)

51%

49%

22%

15%

13%

Sugars / othercarbohydrates

Plant origin

Bacteria

Yeast

Algae origin

Feedstocks and agents incorporated into processes

‘Which of the following feedstocks or agents does your company incorporate into its processes?’

None 53%

1 or more 47%

Base: All respondents incorporating feedstocks or agents into processes (366)

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Base: All respondents (772)

53%

52%

32%

26%

23%

12%

8%

17%

Future pricing of feedstock

Availablility of feedstock

Need to invest in new/retrofittedfacilities

Chemicals won't be the same

Might not be predictable,repeatable

Might not scale

Need to train staff

None of above

Reservations about sustainable chemistry processes‘Which of the following reservations do you have about sustainable chemistry processes?’

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15%

7%

5%

4%

25%

3%

3%

7%

CEO/ Chairman/ President

VP

A/O directors

Executive VP

General Manager

Purchasing Manager

Marketing Manager

Sales Manager

Job title (mentions 3%+)

Base: All respondents (688)

Strategic functions 31%

Operational functions 38%

‘Which of the following job titles best reflects your position?’

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37%

34%

34%

16%

16%

9%

12%

Speciality chemicals

Petrochemicals

Polymers

Agrochemicals / Fertilisers

Fine chemicals

Pharmaceuticals

Commodity Inorganics

Segments within which company operates (mentions 9%+)

Base: All respondents (748)

‘In which of the following segments does your company operate?’

20

Base: All respondents (758)

15%

8%

12%

11%

40%

14%

$10billion or more

$5billion - $10billion

$1billion - $5billion

$500million - $1billion

Up to $500million

Don't know

Total global revenue of company

Average $3.8 billion

‘What is the total global revenue of your company?’

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Base: All respondents (745)

32%

31%

21%

5%

4%

3%

4%

Europe

North America

Asia

Middle East

Australasia

South America

Africa

Region company based in‘In which region is your company based?’

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Key findings / 1 … The most critical short-term priorities were found to be raw materials sourcing/pricing, strategic cost

reductions and maximising cash flow. While from a long-term view, new product development, increasing

shareholder value and raw materials sourcing/pricing were the priorities. Sugars/other carbohydrates are the

feedstocks and agents most likely to be incorporated currently into processes. Over half of company’s

define sustainability as “environmental qualities of end products” or “carbon footprint of internal processes”.

Just under half say that sustainability is a company wide priority, although another quarter say it is a

management priority. Two in three indicate environmental qualities of end products and carbon footprint of

internal processes are very important factors towards sustainability.

Over half of respondent companies are already engaged in sustainable chemistry practices, with the

significant majority of these maintaining this commitment during the economic downturn. Indeed almost

three quarters of the sample feel it is important for their company to be a front-runner in terms of sustainable

chemicals. Three in ten are already giving sustainable chemical processes priority, while four in ten say that

it’s a long term priority.

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Key findings / 2 … BASF was the company most likely to spring to mind spontaneously when thinking of a sustainable

chemical company.

The greatest reservation around sustainable chemistry processes is future pricing of feedstock. Cost is the

most prohibitive component of a sustainable chemical program, followed by technical capabilities. Almost

half consider there to be an economic advantage to switching chemical manufacturing process inputs to

renewable feedstocks, while almost six in ten feel that their company should reduce its exposure to the

petroleum-based commodity market.

Respondents indicated that almost six in ten of their customers had expressed interest in sustainably

produced chemicals.

In terms of timescale, the majority (almost half of the sample) feel it would take less than 10 years to go

from launching a sustainable program to using such processes at commercial volume. However, over a third

believe it would take less than 5 years. The average is 6.5 years.