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Posted: March 13, 2008
Chemicals feed hopes and fears
(Nanowerk News) Without their products chemical companies would be praised as ethical leaders. Chemical products are a space for complex and emotional debates where it is hard to register reputation gains. Companies rather manage to do so at the levels of working conditions, impact of production and institutional impact, states a report published today by Geneva-based ethical reputation research firm Covalence – Covalence Chemical Industry Report 2007.
The Chemical industry only comes out 9th out of 10 in Covalence’s EthicalQuote ranking, ahead of Oil & Gas. 2007 showed an improvement: Chemicals ranked 8th, outperforming Oil & Gas and Pharmaceuticals. Despite this progress, the Chemical industry seems deeply embedded in the bottom of the cross-sector ranking, far from fast progressing sectors such as Automobiles, Technology Hardware and Food & Beverage.
Why is it so difficult for Chemical companies to be perceived as ethical? Because of their products. GMO is the biggest issue within negative news. It is a focal point of criticisms geared towards the Chemical industry. Other product-related issues that have made the ethical reputation of chemical companies suffer in 2007 are: Agent Orange, Biofuel production, DBCP pesticide in Central America, Patent abuse / Evergreening, Atrazine (PFO, Tauccamarca 1999), Crop protection (Atrazine, Paraquat), and Aspartame/nutrasweet risk. Pollution appears as the second most important issue within negative news.
While being intensively criticized, chemical products are also commented in favorable terms. This has been the case regarding: Olyset long lasting Insecticidal Net, Biopolymer, Propylene Glycol Renewable (PGR), GMO, Crop protection, responsible nanotechnology, and, in first place, Energy (biofuel, hydrogen).
In times of high concerns regarding climate change, CO2 emissions and the need for more renewable energy, several chemical companies have managed to highlight their ecologically – friendly innovation efforts. DuPont has harvested numerous positive news with biofuel, and Air Products scored high with hydrogen technology. However, chemical companies active on biofuel face negative effects such as food shortage and price hike in developing countries and vulnerable communities.
Outside of products, chemical companies tend to show favorable ethical records. Among major positive issues registered in 2007 were: Climate change initiatives, CSR Commitment & Reporting, Health & Safety, CSR Awards & Rankings, Student grants, research & education, and Water management.
In the end of 2007, BASF shows the best EthicalQuote score out of 18 Chemical companies, closely followed by DuPont, while Syngenta and Monsanto occupy the last positions. From January to December 2007, DuPont, BASF and Bayer show the best progression. Results expressing the Reported Performance (positive news only) place DuPont in first position, followed by Dow Chemicals, Bayer and BASF.
Covalence’ s ethical quotation system is a reputation index based on quantifying qualitative data, which are classified according to 45 criteria such as Labour standards, Waste management, Product social utility or Human rights policy. It is a barometer of how multinationals are perceived in the ethical field.
The system integrates thousands of documents found among media, enterprise, NGO and other sources, for producing the EthicalQuote curves. These curves measure the historical evolution of the reputation of companies regarding ethical issues. They are created through the cumulative addition of positive news (documents coded as “ethical offers”, which are weighed as +1, curve ascends) and negative news (“ethical demands” weighed as -1, curve descends). The Reported Performance measure is given by cumulating positive news only.
This tool received the Cantonal Sustainable Development Prize (Geneva) in 2004 and prompted Covalence among the finalists of the Social Entrepreneur of the Year 2005 award organised by the Schwab Foundation. Covalence research is also distributed by Reuters, Thomson Financial and Bloomberg.
Covalence is closely monitoring 10 sectors including 200 companies that are classified as the largest market capitalizations in the Dow Jones World Index. Covalence is a limited company that was founded in Geneva in 2001 by six persons coming from social sciences and finance.