Episode 29: Transforming towards sustainable chemicals featuring WBCSD and Syensqo

The transcript highlights below have been edited for clarity. 

Mark Lee 

Today's conversation is framed around a recent report that was generated by the World Business Council for Sustainable Development (WBCSD), ERM and other partners called “Towards Planet Positive Chemicals, A Chemical Transformation Roadmap Enabled by the Circular Economy”. We will shorthand it to chemical transformation or chemical transformation road map as we go. We have three guests with me on today's episode. One is Anne-Laure Brison, who is the Senior Manager of the Chemicals group at WBCSD. Second is Titta Rosvall-Puplett from Syensqo, where she is the Chief Sustainability Officer. Third is one of my colleagues and partner at ERM, Cristina Pellegrino, who is also our Global Industry Lead for Chemicals. All of whom are really tied into this chemical transformation work. I'd love each of you to tell everybody about your role; something about your role that you really love; and part of the work that's motivating and interesting you in the moment.  

Anne-Laure Brison 

Thank you Mark for the warm welcome. I lead all the work we do in WBCSD on chemicals as well as product sustainability. What I really love about the work I do is engaging with thought leaders and exploring with them on how we can use the power of collective action to create impact. 

Mark Lee 

Sounds perfect for sustainable connections. Titta, how about you? 

Titta Rosvall-Puplett  

Thanks so much. I'm really proud and happy to lead Syensqo’s corporate sustainability function as Chief Sustainability Officer. I love to work with so many different experts, engineers and scientists in our company and partner together with them on solutions and with external partners. That really drives me and it's like what Anne-Laure said, it’s all about the impact we can drive together. 

Mark Lee 

Cristina, please introduce yourself. 

Cristina Pellegrino 

Thanks Mark. I co-led the WBCSD efforts in developing the chemical transformation roadmap with various companies and various stakeholders across the value chain. I globally lead the chemical industry and the part that I'm enjoying the most is working closely across the industry with companies, with organizations such as the WBCSD, to make an impact and to shift the industry to a level where we can really state that it is now a sustainable industry. 

Mark Lee 

Anne-Laure, I'm going to return to the “Towards Planet Positive Chemicals” report. Why this report at this time?  Can you talk about what sustainability and nature positive mean in the context of the chemical industry? 

Anne-Laure Brison 

I'm a chemical engineer, so I'll use that allegory to say it's been the catalyst of an 18-month journey. And what that catalyst is, is a strong emphasis on building resilience in business, that's inherited by the COVID pandemic and that has been obviously reinforced by the Ukraine war since 2022. It's also been anchored into the acknowledgment of two key facts. On one hand, if we look from healthcare to energy, from mobility to communication. More than 95 per cent of all the manufactured products and materials rely on industrial chemical processes. That means chemicals are crucial for the global economy. But, the industrial production and use of chemicals contribute to significant global greenhouse gas emissions and environmental degradation. So that has been the driver for nine leading companies, including Syensqo, to join forces with WBCSD and the support of ERM to shape this roadmap, to transform how chemicals are produced, used, disposed and recycled. In that context, there is no universal answer to define what sustainable chemicals are. That's also what motivated our work. As part of this, we have built a shared vision on what a sustainable chemical system is, because it goes way beyond just the industry. We define it as a system that is net zero, nature positive, achieving and maintaining this status through a Just Transition. To make that happen we need to empower the circular economy, demonstrate and scale up sustainable chemistry as a solution and of course address pollution. 

Current challenges confronting the chemical industry 

Mark Lee 

Can you give us one or two examples of specific challenges that the industry is facing and how the report starts to say you can overcome these. 

Anne-Laure Brison 

The business case shapes that sustainable chemical ecosystem is really rooted in the challenges that not only that industry, but the value chain relying on chemicals are facing. It's very similar to the broad WBCSD global business community. We recognize that sustainability performance is now a key driver for competitiveness. While geopolitics can influence how businesses communicate and plan for future, while there is some uncertainty which is natural when policy may shift, the core remains the same. Small businesses understand that it is key to take into account any material opportunity and risk that can affect the performance and the growth of companies. We believe that addressing issues like climate change, restoring nature and key societal challenges will continue to be key to staying competitive. This is completely applicable to the chemical ecosystem. What we need for that is to craft the supporting environment to move from the current supply, asset base, the solutions, and the business model towards that net zero nature positive vision. Again, as I mentioned, enabling circular economy, scaling sustainable chemistry, tackling pollution are crucial to enable that move. 

Mark Lee 

Titta, can you tell people a bit more about Syensqo, which spun off from Solvay in 2023.  It is a new company with a long heritage. In the context of the report and what Anne-Laure has just said, how is Syensqo working towards sustainability transformation? How does this play out at an individual company level? 

Titta Rosvall-Puplett  

Syensqo is a specialty chemicals company, and just over 12 months old, following the successful demerger from Solvay. As you said, our legacy and history dates back 160 years. We operate across 30 countries with 62 manufacturing sites around the world and 12 research and innovation hubs. So, we are investing a lot in research and innovation as well. We are very close to our customers today and we're headquarters in Brussels, Belgium. Today 41 per cent of our customer share and sales are in the Americas, 36 per cent in Asia and 23 per cent in Europe. We operate globally and I see this future for us and what Anne-Laure just explained, about the role of chemistry and chemicals being part of the solution. I can really see the future is exciting because we can drive that, and we can enable sustainability for our customers and therefore for society. Let me give you a few examples, we are in multiple applications, and we use chemistry to enable lightweighting, electrification or address resource scarcity even. And because we particularly use innovation and science to commercialize these innovations, we drive some of the key societal trends that impact our lives every day. We're in semiconductors, membranes in your smartphones; in aerospace, enabling lightweighting as a body part for airplanes; and battery materials in your EV batteries. Every other EV battery has some of our materials in them and even in medical devices. So, chemistry can be used in so many different ways and we're doing just that.  

I see this as an opportunity to transform sustainability but also transform businesses. For us in Syensqo, sustainability is really central to what we do. On the one hand, we recognize that our long-term success is absolutely, intrinsically linked to the health of broader social and environmental ecosystems within which we operate. But sustainability is also good for our business and profitability. I just explained some of the applications and the products that we provide our customers with. So, in a way, we are practically part of the solution. I like to discuss with my team about when we focus on higher yields with lower impacts, we’re operating by default, you would say more efficiently, and we regenerate resources and build resilience. That alone enables long-term growth. I'd like to see more of that in our sector. 

Mark Lee 

Titta, can you tell us about one specific nature or sustainability goal that you've set and how the company maps out a path to that target? 

Titta Rosvall-Puplett  

I see and I think we all see, everything in our planet is connected and certainly in nature. In the same way I'd like to see companies, like what we do in Syensqo, is our sustainability integrated into the business. Therefore, there is no sustainability strategy. There is one strategy, that's the company strategy that includes sustainability and it's integrated. We took nature at the very heart, we've been working on biodiversity actions, water, waste and pollution for years. And now in Syensqo, last year we launched our very first target on nature. We addressed water scarcity in particular. Here we really aim for reducing freshwater intake by an average of 20 per cent by 2030 compared to the 2021 baseline. This is interesting because we look at specific sites that are experiencing water availability challenges. We can go to where the hot spots are and we're doing this by putting in place action plans with our business, and our site leadership and management. We are installing water stewardship roadmaps that we will equip across 15 sites across the world. These sites represent 90 per cent of our whole water intake across the group. I think this is just one very concrete example of how we are addressing nature very concretely. And there is more, we're increasing our attention on broader environmental stewardship. 

Mark Lee 

Cristina, is the industry all aligned with this kind of transformation? How much of a step change is this going to beg of the industry to go through this kind of transformation? 

Cristina Pellegrino 

I would say a significant step change is needed. If you think about the six pathways that Anne-Laure highlighted, you know the three imperatives, the three transformational enablers. There are elements that require a step change in collaboration and industry engagement. We know that the chemical industry is well known for being competitive and we also know that there are fragmented efforts towards the sustainability goals. However, companies now need to collaborate more effectively within and beyond the industry. So, across a much wider group of stakeholders, regulators, suppliers, NGO's and customers, to really try to build industry wide solutions. This might include the common standards, development for sustainable practices, data sharing or even co-developing infrastructure for things like recycling or waste management. So, the collaborative mind set embracement is really crucial.  

The second one that comes to my mind and has been a debate in many workshops and discussions that were held throughout the development of the chemical transformation roadmap, is the shift of mind set to circularity, which is really key. Moving from an attitude of production disposal to design for usability and sustainability, implementing more circular business models that really focus on the entire life cycle of the chemicals and the materials. I would also say that innovation in products and technologies is key to aligning with goals that the roadmap has set and therefore the fact that companies really need to integrate quicker, sustainable design principles into product innovation. So maybe even accelerate the development of low carbon or carbon neutral processes but there is a challenge associated with that. The financial challenge and the investment challenge versus the timing of the return.  

I think there is one last important element that was identified. The Just Transition that Anne-Laure mentioned, so the social impact, looking into the inclusion of better labor practices, the community engagement. There is more proactiveness required from the company in addressing societal concerns and in working towards a Just Transition with workers, the communities and really paying more attention to these dimensions of sustainability. 

Portfolio transformation and how it can be achieved

Mark Lee 

Anne-Laure, I wanted to ask you about portfolio transformation and if this is going to happen across the value chain. What does that look like and where do the companies who are participating in the value chain transformation start their work? 

Anne-Laure Brison 

That's actually a great question and I'd like to start with one thing that may not be super obvious for our listeners. Unlike in fuel or energy in the material world, sustainable materials in general do not benefit from regulatory mandates or regulatory driven incentives. That's why the shift really relies on market demand so far. It's true that we're seeing growing actors across the value chain calling for sustainable solutions. But what we see lacking is on the one hand, a clear demand aggregation and signaling for sustainable solutions, and on the other hand, a harmonized language on sustainable products. Portfolio transformation is really a cornerstone for companies to implement climate, nature and social equity goals. It's to meet the sustainability commitments companies have made. They need to get more granular and look into their portfolio. That's why it's so important. But when you do so, it can get quite easily overwhelming. So, it's really important to strive to reduce complexity while integrating holistically sustainability action into business decisions. And of course, that requires value chain perspective, which means building trust, collaboration, but also creating a harmonized language which doesn't exist today.  

With this said, how do we get started and what does portfolio transformation mean? It usually starts with understanding the material sustainability related risk and opportunity that exists in the offering. That must be done considering all the stages of a product life cycle. Then you would categorize product group according to their sustainability performance and then turn that into insights and actions. What I mean here is strategic and operational decision making that can include developing new innovative products, mitigating issues identified or even phasing out some of those worst performing products. An effective way to get started is to set up a dedicated portfolio sustainability assessment and steering process. That's what we've observed companies do, but it's also super important to stay pragmatic on the way we've seen companies start from various ends. From starting at high level and doing portfolio scans and then getting more granular over time, others start first with innovation or with a business where you have identified appetite for portfolio transformation and then scaling steps. But across the board, all our members who practice those types of portfolio transformation processes say it is important to mobilize cross functional teams in the organization as well as leveraging all the data that already are available.  

I wanted to finish answering your question by stressing to our podcast listeners the importance of considering a broad set of drivers to really avoid burden shifting. That's where portfolio assessment and steering bring value to companies because it helps scanning risk, prioritizing actions, investments and innovation efforts, while ultimately reducing the level of complexity that are required when you try to integrate sustainability into business decisions. 

Mark Lee 

Cristina, what other obstacles is the industry facing in terms of embracing and then moving forward on this transformation pathway. 

Cristina Pellegrino 

In terms of the challenges, clearly this often stems from the complexity of the operation, the need for significant capital investment. Also, the pressure of balancing sustainability with profitability. There might be high capital costs for sustainable innovation. If you think about the transition to more sustainable practices and technology like biobased feedstock, carbon capture storage or even sustainable chemistry, they often require significant upfront investment, and returns might take years to materialize. Potentially companies can explore green finance options like green bonds, ESG investing, but also looking into collaboration with industry peers, research institutions and maybe even starting on joint R&D initiatives so that they can somehow reduce those associated costs. 

The other one is the gap associated with technology and infrastructure. The transition to new technologies could require significant upgrades or even completely new infrastructure. Maybe the way to approach this for companies is almost a staged approach into existing technology, gradually scaling up investment in new solutions. Again here, what is better than collaborating with external partners. Think about equipment manufacturers, technology providers or even innovation hubs, and really try to accelerate the adoption of cleaner, more efficient technologies.  

There is one third element that comes up often and it is the potential cultural resistance to change. Some well-established companies might face internal resistance to change, in particular where employees or management are accustomed to traditional practices.  Where sustainability is seen as a secondary element to take into consideration. Everything associated with organizational culture can present a barrier to the transformation. Again, what do I hear is the best way to address it? Strong leadership - Titta and Syensqo are a great example of this, where sustainability is really embedded in the way you operate, building that culture by engaging employees at all levels. Incentivizing sustainable behavior and creating clear goals and rewards can definitely help organizations with the transformation agenda. 

Mark Lee 

Titta, can you tell us a bit more about Syensqo’s portfolio strategy and how you're navigating that difficult terrain in moving towards a sustainable portfolio for yourself? 

Titta Rosvall-Puplett  

You know a lot has been said, both Cristina and Anne-Laure talked about a proactive approach. I'd like to lean on that because in the end it comes down to that. Having the foresight, either it means cultural change shift, but also the foresight to understand what questions to ask. In Syensqo, when we look particularly at portfolio transformation, I tend to think when we focus on lower impact or renewable based products for instance, those enhance our customer operations and therefore contribute to our top line growth. By doing so, we're signaling to the market that this is possible. I think in all this complexity, it's also critical. I tend to always try to think how we can simplify things without making things simple in this complex world. But being concrete and very targeted in our portfolio. For instance, natural and bio-based polymers that are used for consumer care and perhaps polymers that use recycled raw materials from the beginning for automotive or consumer devices - all of this supports circular economy, and this is who we are and what we do.  

Another example of how we incorporate sustainable portfolio transformation is in light weighing and composite materials, particularly for aerospace. All of these advances clean mobility and therefore actually give examples for our customers and society on how we can jointly create value and share success together. I spoke a little bit about circularity and solutions, we have set ourselves a target for circularity. We aim for 18 per cent circular sales by 2030 and this is really defined as how we enable circularity for our customers. In fact, today we're at 16 per cent of our goal.  

For all solutions, we're using a sustainable portfolio management tool that helps us to make business decisions based on what is sustainable and today 80 per cent of our innovation pipeline is focused on creating sustainable solutions. We're using tools to help our decision making internally and today the share of sales on sustainable solutions represents 63 per cent of our revenue based on 24 performance. When you look at these numbers and trajectories, two of these portfolios that I just mentioned, they show year on year resilient growth, and I like to look forward to how this can be further accelerated because it really demonstrates this is possible. The way we look at this is, here are our solutions, this is our innovation. I think we also need to look beyond that and look at the value chain wide approach proactively. Let me give an example. For instance, we aim to be carbon neutral by 2040, and we're halfway there with our 2030 carbon reduction targets. These 2030 carbon reduction targets were validated by science-based targets initiative just recently. I'm not going to lie to say this is easy, it is really hard. For most companies like ours, scope 3 represents a lion's share of carbon emissions. When we talked about productivity, I'd like to mention we looked at this challenge and looked at where the carbon emissions particularly sit, and we learned that it really is in our top key suppliers. In order to bring our suppliers on board the net zero journey, we've just launched a supplier climate pledge that targets our top 70 key supplier. These actually represent 80 per cent of our carbon emissions in our raw materials that we procure.  

I think working in this way where you look at what really is material for you and working in partnership internally, for example we work hand in hand with our Chief Procurement Officer and his team to make things like this happen and then working also together with our suppliers. I think it's just one example where, you know we talked a little bit about the market demand creating market demand, so examples like this make me hopeful that it can help to create the market push and pull at the same time, depending on which part of the value chain you sit. By taking such a proactive approach to manage resource scarcity and the value chain up front, I think this is the way to go to see the result and impact overtime. Finally, this is Syensqo doing it, imagine if we would do this sector wide, what would the impact be, the ripple effect we can create across the value chain. I think it would be amazing to see. 

What does nature positivity mean for the chemical industry 

Mark Lee 

There is considerable emphasis in the report on nature positive. Anne-Laure, if there's a need to transform portfolios to not just reduce impact but to be able to start demonstrating restoration of the natural environment, what's an example of how chemical companies are stepping up on nature restoration and remediation? 

Anne-Laure Brison 

The chemical industry is built on solid environmental, health and safety policy. But as you laid that out already, nature positive requires much more, to go beyond just product safety compliance to reverse nature loss and have restoration and regeneration of the ecosystem. We see great individual progress, and Titta has mentioned how they set up a target for their freshwater intake and implement that through the 15 priority sites. What we see required to step up is to get the narrative right to mobilize the c-suite on the nature action agenda, because today we're not there yet. To then prioritize key actions and that needs to be done considering all stages of the life cycle, from extraction to disposal and resource regeneration for chemicals. Both consider the current states, but most importantly the decarbonized scenario to ensure that when companies prioritize actions that support that transition, and because what gets measured gets done, it's also important to select the priority metrics that helps track the progress. This is the necessary foundation to really change scale on nature loss and that's where we are helping companies to progress, making sure that they develop nature positive strategies without burden shifting, that focus on remediating and restoring nature, and it’s also incentivized by a shift to a well-functioning circular economy because the two are completely linked. That's part of the work that we will do this year and that we will do next year. I hope we will have a new publication very soon on the progress that we, together with our members are making. 

Mark Lee 

Titta again, how did you define or redefine environmental stewardship for Syensqo in launching the new entity. And does it make you more convinced that nature positive is attainable for the industry? 

Titta Rosvall-Puplett  

We really see ourselves as responsible stewards of our environment and it's also how we ensure business continuity in a responsible way. While we comply with all relevant local, national and international environmental laws and regulations, it's really important to take the necessary action to reduce substances of concern or very high concern, emissions and affluence. I like to often think about how we manage our footprint and how we proactively accelerate our handprint. We really see ourselves long term being able to pioneer environmental stewardship within our sector and part of this is through managing and mitigating pollution and waste, particularly around substances of very high concern and hazardous waste. Also, part of that is through our handprint, so the approach to proactively innovate. We have been innovating to find alternatives for substances that may trigger concern. With the current focus on phasing out use of fluorosurfactants and since 2019, we've quadrupled our investment in research and innovation in this area to invent a new polymerization process using non fluorosurfactant technologies efficiently. Therefore, using resources and investing in nature regeneration. So, beyond water, waste and pollution, we're also looking at our process engineering and efficiencies and I think it's a holistic approach with very targeted actions. 

Mark Lee 

Cristina, a little bit different than regeneration is the remediation challenge. What's the best way for the industry going forward to address contamination and remediation responsibly? 

Cristina Pellegrino 

Linking it to what Titta mentioned around innovation, I guess by setting their innovative mindset, there are three elements that are key. The clear definition of the objective. So the firms that that really address the liabilities well, are the ones that have clear strategic and business objectives for their portfolio across the sites, including specific objectives for each site and how this might evolve with time. That depends but clarity is key, and they can be a combination of elements. They can look into cash flow, risk mitigation, and reduction compliance, reputation, M&A, everything.  

The second element is probably the comprehensive implementation plans that needs to be developed. Of course, at the most fundamental level, they need to adhere to the applicable regulation or adopt suitable standards where regulations do not exist. But these actions and the remedies should really consider a mix of stakeholders input, that goes beyond just the regulators and responsible parties, really looking into the social and community aspects of the entire remediation. I think one other element is selecting the right partners. There might be consultants, remedial technology firms, but this needs to be somehow involved more than just as service providers, they need to really be able to partner with the companies to co-develop the strategy, implement effectively the plans so that they can deliver the expected outcome. Finally, I would say that one element that is becoming more of a focus is the adoption of a circular economy principle in the approach to remediation. 

The importance of value chain collaboration   

Mark Lee 

Anne-Laure and Titta, can you close out on this final thought on where and how to extend collaboration to help increase the chances of success and of working through all this faster.  

Titta Rosvall-Puplett  

I think it's quite clear from what we've discussed here today is that collaboration throughout the value chain is really key. But also, I think it goes beyond our sector. I think where we look at sustainable solutions that protect the environment, it also helps society and the planet, that's a given and at times we need to really look beyond our own ecosystem to do so. We at Syensqo partner particularly with some important organizations such as Ellen MacArthur Foundation, that has been known to advance circularity and sustainability agenda for a long time. This partnership has enabled the foundation to continue relying on Syensqo’s input and expertise, while also supporting our efforts and help to define what circularity could mean in the chemical sector. We also partner with the World Business Council for Sustainable Development, particularly on global circularity protocol. This is really important because it aims to establish a harmonized framework for circularity and performance and currently, there is no internationally recognized standard per say, for frameworks on circularity or for our sector. When you look at circularity for most part, people tend to think circularity is imagining recycling. But as we just discussed, for instance, some chemical solutions are invisible in so many applications, so we need to look at a different definition on that. For instance, Syensqo is a mid-stream actor across the value chain and we need to do our part whether improving using low carbon or recycle raw materials or product durability. We cannot do that alone, but we can help to advise what good would look like when it comes to setting a standard and a framework. So that's really helpful in that context.  

There is another collaboration example where we work together with an ambitious initiative and an organization called Climate Impulse, for instance. This is where we're building the first ever plane powered by hydrogen to go nonstop around the world using this revolutionary technology. We're partnering, Syensqo being the main technological partner, alongside with UM6P university in Morocco and the OCP Group. Again, we're building something that's new, that doesn't exist and this groundbreaking endeavor promises a new set of standards for sustainable aviation in our sector towards net zero emissions. Without multidisciplinary cross functional partnerships externally, things like this wouldn't be possible and I think that's fundamentally important. 

Anne-Laure Brison 

I'd like to maybe stick with one point that I made earlier on. Unlike other areas in the world of material, there is no mandate for sustainable products, no harmonized criteria to define what sustainable products are. Getting there will require radical collaboration within and across the value chain. What we hear from our members and we're starting to craft a piece of work on that, is a growing need to create that demand aggregation and signaling mechanism for those sustainable solutions with commonly agreed criteria and identify a mechanism to overcome the structural cost increase that comes with those sustainable solutions. So that's where my hope is at the moment, that we’ll soon be able to craft something to together with our members again and create further impact in this space. 

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