Report from Planet Tracker urges investors to address the financial risks associated with toxic chemicals, which are key drivers of environmental damage, as well as being responsible for chronic and acute impacts on human health.
The release of novel entities — artificial chemicals and other human-made pollutants — into the biosphere, has accelerated to a point that they have exceeded their planetary boundary, threatening the Earth operating system, along with humanity. Planet Tracker’s latest report, ‘Novel Entities – A Financial Time Bomb’, presents a detailed analysis of the risks of one of Earth’s nine boundaries, novel entities. The report highlights their risk to both human and planetary health and warns investors of the significant financial risk they face from not considering their potential impact.
On 9 September, in Brussels, former European Central Bank President Mario Draghi presented his report on the “The future of European competitiveness”. The document outlines the challenges that EU businesses face in being both productive and environmentally friendly. The Draghi report had been much anticipated and, following its launch, has generated intense debate among the range of stakeholders – especially on whether Europe’s ambitious climate targets and related policies are hindering EU economic growth. Planet Tracker and Carbon Tracker have identified four major points of discussion.
SABIC is expected to be on a 2°C pathway by 2030 according to analysis by Planet Tracker. The company aims for carbon neutrality by 2050, targeting a 20% reduction in Scope 1 and 2 GHG emissions by 2030 from a 2018 baseline. However, Planet Tracker’s analysis shows that SABIC lacks a specific Scope 3 emissions target, which accounts for 70% of its footprint, and therefore the company will miss the alignment with the latest Paris Agreement ambition.
Bayer is projected to align with a 2°C warming scenario by 2030, according to an updated analysis by Planet Tracker. This compares to an earlier 3°C projection in August 2023. The company aims for Net Zero GHG emissions by 2050, with interim goals for 2030, and achieved an 11% reduction in total GHG emissions from 2019 to 2023. However, Planet Tracker’s analysis shows significant variability in emissions trends, suggesting Bayer might struggle to meet its 2030 targets.
Planet Tracker’s report, Tomorrow’s Chemistry, presents a comparative analysis of the Climate Transition Assessments (CTAs) of seven leading chemical companies, Air Liquide (AI), BASF (BAS), Bayer (BAY), Dow (DOW), Incitec Pivot (IPL), LyondellBasell (LYB), and Toray Industries (3402), shedding light on their commitments, strategies and readiness to align with the Paris Agreement and achieve Net Zero emissions by 2050.
BASF has recently upgraded its climate transition plan aligning with some recommendations from Planet Tracker, especially regarding setting (partial) Scope 3 targets. BASF unveiled upgraded targets in December 2023, adding to its mitigation goals to reduce Scope 1 and2, some Scope 3 emissions. Notably, the company plans to decrease specific upstream Scope 3 emissions by 15% by 2030.
Despite Toray Industries’ stated goal of achieving Paris-aligned status by 2031 and net zero by 2050, analysis by Planet Tracker concludes that Toray lacks a robust plan to achieve net zero for Scope 1 & 2 by 2050 and highlights the absence of a clear strategy for Scope 3 emissions. While Toray aims to reduce absolute emissions by 50% per unit of revenue by 2031, Planet Tracker argues that the company is not on track to meet these targets.
From 2019 to 2021 Air Liquide experienced a weighted absolute increase of 16% in total Scope 1, 2 and 3 emissions. Without further mitigation, Air Liquide will overshoot SBTs by a significant 243%, failing to align with a 1.5°C pathway by 2030 or a well-below 2°C warming scenario by 2035. However, Planet Tracker does not anticipate that this will happen if the company follows through with its forward-looking disclosed initiatives.
Incitec Pivot demonstrates a robust commitment to its climate transition with ambitious greenhouse gas (GHG) reduction targets and proactive risk management. The company’s revised transition plan aims to achieve a 42% absolute reduction in emissions by 2030 and Net Zero by 2050. A more detailed connection between mitigation projects and transition investments would enhance Incitec’s transparency and align the company’s efforts more clearly to its 1.5°C target by 2030, and subsequent Net Zero by 2050.
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