According to a blog post by Ellen van der Linde, a climate analyst at Nexio Projects, ESG pressures are changing the global chemicals industry, requiring businesses to deal with Scope 3 emissions, circularity requirements, and stricter regulations in order to remain competitive. “The advancement of global ESG is centred on the chemicals industry. Van der Linde commented on the Nexio Projects blog, “Its decisions today will influence the sustainability of value chains tomorrow.” According to her, chemical manufacturers must contend with increased stakeholder expectations, stricter regulations, and greater environmental pressure. Companies must therefore seek comprehensive reform in order to preserve their market position and resilience. According to Van der Linde, the chemicals sector is one of the biggest industrial emitters in the world, with Scope 3 emissions making up between 75 and 90 per cent of all greenhouse gas emissions.

She primarily ascribed this to the creation of raw materials upstream and the consumption and disposal of products downstream. The energy-intensive manufacture of intermediates like acids, solvents, and industrial salts is one of the main contributors. Emissions from utilities and purchased feedstocks are also a significant factor, particularly in industrial gases, ammonia derivatives, and chlor-alkali processes.

Through wastewater discharge, neutralisation, and residue incineration, end-of-life treatment of sold products contributes to additional emissions. Companies are being forced to work with suppliers on lower-carbon sourcing and emissions reporting due to increased regulatory and investor focus on whole value-chain transparency, she added.

By enhancing supplier data comparability and consistency, industry initiatives like the Together for Sustainability framework are hastening the transition from compliance to leadership in emissions reduction. According to van der Linde, “Circularity is increasingly redefining chemical production by reducing waste across product lifecycles and reliance on virgin materials.”

She emphasised the use of closed-loop systems for solvent, acid, and base recovery and reuse. Inorganic salt and intermediate recycling and purification are also becoming more popular. Particularly in coatings, detergents, and industrial cleaning solutions, formulas are increasingly being designed for recyclability, biodegradability, or safe neutralisation. According to her, enhancing circular processes increases supply security, cost resilience, and environmental performance. Today, the chemicals business must comply with a number of complicated regulations pertaining to product safety, hazardous materials, and emissions.

Van der Linde mentioned significant policy changes that are changing the requirements for compliance. These include the European Sustainability Reporting Standards and the Corporate Sustainability Reporting Directive, which require more comprehensive disclosures on the effects of pollution, water, and biodiversity. Additionally, carbon cost exposure for energy-intensive chemical products and intermediates is being introduced under the Carbon Border Adjustment Mechanism.

The Chemicals Strategy for Sustainability and REACH reforms are reinforcing the principle of essential use and increasing limitations on compounds of very high concern. According to her, proactive alignment boosts investor and consumer trust, while non-compliance puts commodity chemicals at risk of being excluded from the market. Beyond emissions, strong product stewardship throughout the chemical lifecycle is becoming more and more important for ESG performance. Priorities include, if possible, replacing dangerous materials with safer or bio-based substitutes. Better inventory control and traceability are also essential, especially before digital product passports.

Due diligence and supplier audits are especially important for imported intermediates and prohibited compounds. According to van der Linde, good stewardship limits legal and reputational liability from legacy contamination and non-compliance while lowering environmental and health hazards.