All Eyes Will Be on Chemours and Its ESG Push

When The Chemours Co. announced a slew of sustainability targets four years ago, it had no fully baked plan on how to get there. It still doesn’t today, yet that’s a common enough theme running through the chemical industry. The task of filling in the blanks at Chemours falls to CEO Mark Newman, two months into the role. 

Newman and Chemours’ first ever chief sustainability officer, Sheryl Telford, are looking to pull off one of the biggest ESG turnarounds in chemicals, i.e., taking a former DuPont business that for the best part of two decades was mired in a PFAS pollution quagmire and transforming it into a leader in greener chemistry for hydrogen, data processing, autonomous cars and sustainable refrigerants. “Meaningful progress” is being made, Newman said in an interview with chemicalESG.

“On some fronts we’re still in the early stages of how to move the needle, but we’re very clear on our determination. This is not artificial. We’re not trying to greenwash the company. ”

CEO Mark Newman

Chemours’ troubled start as a listed company has given it a vantage point over ESG issues few others share. It’s seen first-hand what happens when things go wrong, what it takes to rectify issues, and how imperative it is to get things right going forward. The ensuing PFAS litigation rocked the very viability of the company. As Newman looks to turn the page and enter Chemours’ next chapter, he reckons the whole episode instilled a deeper consciousness and purpose across the 6,500 strong workforce to be more sustainable. 

The Wilmington, Delaware-based group has joined the throng of companies, including DuPont, targeting net-zero operations by 2050. It’s aiming to cut greenhouse gas emissions by 60% by 2030, and reduce air and water process emissions of fluoridated organic chemicals by at least 99%. It was a certain class of PFAS chemicals that were center-stage in the pollution and litigation cases.

This time around, Chemours feels better set up for sustainability.

Telford holds court once a month. The Corporate Responsibility Leadership Team grills executives on progress and debates new commitments. A good sustainability plan is a must-have if a company is to attract the best scientific talent, Telford said in the chemicalESG interview. Out of Chemours’ $350 million Capex budget this year, $75 million will be channelled into sustainability, and this kind of spending is set to endure for some time as 2030 goals loom.

Chemours faces challenges across its focus areas: TiO2, Thermal & Specialized Solutions, and Advanced Performance Materials. TiO2 is indispensable as a whitening agent in everything from paint to toothpaste. Alternatives are thin on the ground.

As the world’s No. 1 producer of the mineral, Chemours is looking at emission reduction, improving energy efficiency, and transitioning to more green energy to power plants to improve its standing. It claims sustainability benefits from being able to use all grades of ilmenite and rutile, and byproducts from mining.  Elsewhere in the portfolio, Newman says he has big hopes for Nafion dispersions and resins, used in proton-exchange membrane fuel cells, and more environmentally sustainable Opteon refrigerants. 

Despite a move to resurrect natural refrigerants that predated fluorocarbons, Newman maintains its latest hydrofluoroolefin technology will endure. Opteon is replacing HFCs in applications like car air-conditioning, and all-the-while scientists are tinkering with the chemistry and working out what comes next.

But therein lies the problem for the chemical industry as a whole, according to Paul Hodges, chairman of New Normal Consulting. Things are moving very quickly in the world of ESG, and the sector is struggling to keep up.

Faced with a backlash against climate change, plastic waste and marine pollution, more politicians and consumer goods companies are already railing against the very products that are the foundations of today’s $4 trillion chemical industry. The sector is set to face a shock akin to what hit global automotive makers with the combustion engine’s sudden fall from grace, according to New Normal’s Hodges. The situation in plastics is particularly acute, he added.

Politicians aside, some consumer-goods companies that devour thousands of tons of plastics annually aren’t hanging around for the chemical industry. P&G is building a plant to produce virgin-like polypropylene from recycled bottles, and the maker of Head & Shoulders shampoo and Ariel washing powder claims it was an inhouse packaging scientist that came up with the methodology.

“People have not yet woken up to the fact that pretty soon plastics producers will find it has become socially unacceptable to use virgin products, and will have to move to recycling,” Hodges said. “P&G are unlikely to be an isolated example, given the pressure coming from consumers and legislators. And, of course, there is similar pressure to end the use of fossil fuels to meet Net Zero targets as the auto industry transitions to Electric Vehicles – which means plastics producers will no longer be able to rely on naphtha as feedstocks for their business.”

The concept of recycling TiO2 seems a stretch. But that may not stop consumers and their suppliers from demanding a complete rethink of how paint and other products are delivered and applied.

Given time, Chemours and chemical companies are confident of innovating their way through this. What is rattling some like BASF’s Martin Brudermueller is how legislators are racing ahead with deadlines and shifting the goal posts, leaving the scientists and the finer points of profit margins and financial support behind.  

“Let’s face it, the net zero 2050 is a moon-shot for industry as a whole and it’s going to require innovation, new technology and partnerships the likes of which any of us have really seen before.”

Chief Sustainability Officer Sheryl Telford

One thing is for sure, Chemours has already changed the landscape for future corporate spinoffs. There’s a completely different mindset concerning environmental liabilities and an unprecedented level of diligence across investment banks, lawyers and anyone else advising on IPOs and similar transactions, according to Newman. 

“That’s been brought in in part because of the Chemours experience,” he added.

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