Croda produces and sells specialty chemicals based primarily on renewable raw materials. The company serves a wide range of markets from personal care to health care, supplying products from lubricant additives to coatings and polymers. Croda is a supplier to many global companies including Unilever, L’Oreal, Henkel, and Procter & Gamble, to name a few.
In 2013, over 65% of Croda’s raw materials were from renewable natural sources, mainly vegetable oils and fats such as rapeseed, coconut, and palm oils. As a result of Croda’s focus on renewable inputs, less than 1% of the company’s existing raw materials are classified as CMR or PBT. In addition, Croda has an objective to replace these toxic raw materials when suitable renewable alternatives exist.
There are three major themes driving green chemistry: waste minimization in chemical production, replacement of existing products with less toxic alternatives, and a shift to renewable feedstocks. In June 2011, Navigant Research reported green chemistry represents a market opportunity that will grow from $2.8 billion in 2011 to $98.5 billion in 2020. ((Navigant Research Press Release. “Green Chemical Industry to Soar to $98.5 Billion by 2020.” June 2011. Accessed June 23, 2014. http://www.navigantresearch.com/newsroom/green-chemical-industry-to-soar-to-98-5-billion-by-2020))
Croda assesses the sustainability profile of its new products against the 12 Principles of Green Chemistry, which include designing safer chemicals and using less hazardous chemical syntheses, safer solvents, and renewable feedstocks. In 2014, the company will monitor against an additional element it developed, which considers the environmental benefits of its products while in use.
Toxic Emissions and Waste
Chemical manufacturing companies are typically emissions and waste intensive. While some hazardous air pollutants that impact public health are limited by national or regional air quality standards in the United States and Europe, companies that establish emissions reductions goals will reduce their environmental liability and position themselves ahead of increasing regulations.
Croda manages its direct environmental footprint proactively by working under an ISO 14001 certified environmental management system at all 17 of its manufacturing sites. In addition, Croda reports on and has reduction goals for greenhouse gas emissions, total energy consumption, volatile organic compound emissions, waste sent to landfill, and water consumption. Croda also has a goal to achieve 25% of the company’s total energy requirements from non-fossil fuel sources by 2015.
Areas for Improvement
Hazardous Waste Reduction Goal
Hazardous waste can pose a business challenge due to disposal costs and the potential for leaks that can result in environmental liabilities. Croda has a goal to reduce waste sent to landfill, but does not have a goal to reduce hazardous waste. Portfolio 21 believes Croda would reduce its environmental risk by establishing and reporting on such a goal.
Country: United Kingdom
To the best of our knowledge the above information is accurate and was obtained from sources we believe to be reliable. Neither the information presented above nor any opinion expressed shall be construed as an offer to sell or a solicitation to buy the security. The views expressed are those of portfolio management as of 8/31/14 and may not reflect current opinions or subsequent events.