London, United Kingdom — Chemical companies Air Liquide and BASF use their environmental and social resources more efficiently to create value than other major chemical companies around the world, according to a new study.
Researchers determined the companies' Sustainable Values, which is a monetary figure that shows how effectively companies use their resources compared to other companies like them.
Companies create a positive or negative Sustainable Value when they earn a higher or lower return than their peer companies. Their resource efficiency is determined by the cash flow generated per unit of resources they use.
The "Sustainable Value Creation by Chemical Companies" report was written by researchers from the Institute for Futures Studies and Technologie Assessment, Euromed Marseille Management School and Queen's University Management School.
It looks at the performance of nine companies - Air Liquide, Akzo Nobel, Bayer, BASF, Dow Chemical, DSM, DuPont, Reliance and Shell Chemicals - from 2004 to 2007, based on 13 financial, environmental and social indicators.
The indicators are: total assets (in Euros), greenhouse gas emissions, water use, total energy use, acidification potential (sulphur oxide and nitrogen oxide production), volatile organic chemical emissions, chemical oxygen demand (removal of oxygen from water because of waste water), hazardous waste, non-hazardous waste, work accidents, number of employees, research expenses and personnel expenses.
The performance of most companies fluctuated among creating positive Sustainable Value in some years and negative Sustainable Value in other years.
Air Liquide and BASF took the lead overall by creating positive Sustainable Value in every year of the study and using their resources up to five time more efficiently than their competitors.
BASF has the highest Sustainable Value overall, and in 2007 it used 10 of the 13 indicators more efficiently then the average. Its highest efficiencies were with water use, VOC emissions and energy use, which created €4 billion, €3.4 billion and €2.8 billion more in cash flow than its peers would have created with the same resources.
Air Liquide used nine indicators more effectively than others, with its biggest efficiencies in VOC emissions, hazardous waste and non-hazardous waste.
Bayer started off with negative Sustainable Value, but made improvements over the following years, eventually using resources 1.2 times more efficiently than others.
DuPont also made improvements in 2006 and 2007, while Shell started to go on a downward trend, with its Sustainable Value dropping below the average in 2006.
DSM, Akzo Nobel and Dow, meanwhile, had negative Sustainable Values throughout all the years. In 2007, Dow used its resources only half as efficiently as the other companies on average.
Because some companies are bigger than others, and therefore due to their sheer size end up with higher Sustainable Values, the researchers also looked at how companies stack up to one another when they considered how much cash flow a company's peers would create with the same amount of resources. Again, Air Liquide and BASF came out on top - Air Liquide used it resources twice as efficiently than the others would have in 2006 - and Dow and DSM are at the bottom, using their resources only half as efficiently as others would have.
The researchers are pushing for the study and its results to be used as a starting point for companies to assess their sustainability management and set targets on resource use.
BASF building - http://www.flickr.com/photos/imipolex/ / CC BY-SA 2.0