How do REACH and CLP impact industry’s sustainability strategies?
Sustainability is increasingly important on industry’s agenda but chemicals management is often not directly linked to companies’ sustainability strategies. Development of more sustainable chemical management is driven more by regulatory requirements, customers’ expectations or by companies’ business strategies.
Helsinki, 4 October 2017 – According to the study commissioned by ECHA, companies still see chemicals management mainly in the context of staying compliant with all regulations relevant to them. Compliance with chemicals legislation is seen by companies as the baseline providing a “licence to operate” in their business fields, but they do not link this work directly to their sustainability strategies.
Good quality information in companies’ REACH registration dossiers was not considered a commercial asset. Dossier quality actually does not have a role in industry’s compliance programmes, and the 19 companies participating in this study do not have specific goals (e.g. key performance indicators) or strategies to deal with dossier quality.
However, REACH is seen as contributing indirectly to profitability or as benefitting companies’ brand values in the long run. Companies striving for the sustainable use of chemicals particularly appreciate the predictability of regulatory action in order to stay “ahead of the game”. The study shows that the Candidate List of substances of very high concern is a major driver of innovation and substitution to less hazardous chemicals. In general, market demand for more sustainable products and production processes is increasing and is most apparent in consumer-facing businesses. Retailers play an important role in conveying trends in consumer demand.
The report’s key finding is that the REACH and CLP regulations have a crucial though only indirect impact on companies’ sustainability and business strategies. The Candidate List in particular impacts market demand and is being used as a measure for investors to benchmark companies’ sustainability performance. Market and investor demands in turn have a direct impact on industry’s integrated corporate business strategies, including sustainability strategies.
The study makes a number of recommendations for ECHA to grasp opportunities to further improve the situation. For example, ways to encourage companies to include good chemicals management in their integrated corporate sustainability strategies by developing reporting tools and benchmarks. Several of these recommendations may also help ECHA in achieving the World Summit Sustainable Development 2020 goals. ECHA will start discussing these ideas with industry, NGOs and other stakeholders.