When IMCD Industrial Solutions set out to write a trend report on sustainability, one thing was clear. Sustainability has moved past an industry trend and is now a clear priority in the chemical industry. In this report, you uncover why.
The Industrial Solutions 'State of Sustainabilty' Report differs from the many other sustainability reports available in the chemical industry. That's because this report is driven by the voice of the market. It shares first-of-its-kind data on the sustainable priorities, motivations, and challenges of industrial sectors. It often shatters common perceptions and provides eye-opening insights on sustainable adoption today.
Ultimately, it is a tool to help the industry understand, drive, and measure sustainable progress in industrial sectors.
Jump to ‘State of Sustainability’ editionsThis report is divided into eight editions, each exploring insights on specific sustainability topics. Read on for a preview or click to dive in where you’re most interested. Table of contents
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The nuances of sustainable adoption today
Companies and countries around the globe have committed to an array of sustainability goals with target deadlines as early as 2030. The industry is in the midst of a transformation. Whether or not those 2030 goals are fully met, the chemical industry is sure to look quite different a decade from now than it does today.
Drivers of sustainability initiatives
As this report explores in depth, each category of sustainability progress advances for slightly different reasons. However, a number of factors appear consistently, including customer demand, regulations, product innovation, environmental impact, and competitive advantage.
Customer demand
Thirty percent of survey respondents named customer demand the most influential driver of sustainability in the chemical industry across the board. That said, industrial sectors span the value chain, and customers are more vocal in some sustainable categories than others. For example, survey responses indicate that customer demand is a much more pressing factor in the categories of renewables, increased durability, and biodegradables than it is manufacturing process improvements, a category possibly less visible to those in downstream markets.
Regulations
Regulations can advance sustainability by pushing companies to find sustainable solutions sooner rather than later. In fact, 23% of survey respondents called regulations the most influential driver of sustainability in their industries. Regulatory compliance was a particular driver in the areas of people, health and safety (38% of respondents called it the primary driver of their existing health and safety activities).
Product innovation and technical performance
While just 17% of survey respondents call product innovation the chief driver of sustainability in their industries, innovation is deeply intertwined with sustainability initiatives. Exciting new approaches, like biomass balance, are already driving sustainability forward. When it comes to biodegradables, materials that improve durability, and materials that enable process improvements in manufacturing, improved technical performance is one of the top three reasons for adopting sustainable alternatives.
Environmental impact
In more than half of the practice areas explored in this survey, environmental impact ranked in the top three drivers of the use of sustainable alternatives. It’s clear that many companies have committed to reducing their environmental impact, and many people are passionate about improving supply chains and the harm they can do to people and the planet.
Competitive differentiation
Although most companies today are working towards incorporating sustainable practices, 92% believe offering sustainable products helps differentiate companies from their competitors. However, while the vast majority feel competitive advantage can be gained through sustainable practices, just 22% call it the largest influence on sustainability in their own industries.
Barriers to sustainable progress
The transition to more sustainable alternatives is complex. Few existing benchmarks are sufficient on their own to guide necessary future actions, and even those companies with measurable sustainability goals often fail to measure evidence toward them. Meanwhile, different industrial sectors often define sustainability and their specific actions toward it differently, complicating the discussion of these issues. Price, limited alternative materials, and concerns about greenwashing also pose significant barriers to progress.
Price
Sustainable alternatives are significantly more expensive than their fossil-based counterparts and progress has been somewhat limited due to budget constraints amid financial turbulence. Despite this, 57% of our survey respondents said that they are willing to pay more if they can prove value to their business and measure sustainable impact and 27% are willing to pay more if their customer can absorb the end cost.
Limited alternative materials
The functionality and availability of sustainable alternatives are among the most significant and consistent challenges across sustainability areas. And in six of the eight sustainability areas discussed in this report, at least a quarter of those who intend to but have not introduced the materials in question say it is because no good alternatives exist in their industries. Even when respondents suspected that appropriate alternatives might exist, they commonly reported not knowing which ones to choose.
Concerns about greenwashing
Twenty-six percent of our survey respondents reported being concerned that most of the sustainability initiatives they see are greenwashing. Another 54% said they think only some of the sustainable initiatives are legitimate but are still cautious. That suggests that four out of every five people, or 80% of those in the industry, have some level of concern about greenwashing.
Despite these challenges, the future is bright
Changes made in industrial sectors have the potential to reverberate sustainable progress across the value chain. Keep reading to uncover more about the eight sustainability topics spurring opportunities across industrial markets and dive into each of our eight editions to get a focused and detailed data review.
Eight editions of the 'State of Sustainability' report
The report is broken down into eight editions, each diving deep into the sustainable topic at hand. See below previews of each edition and dive in deeper where the topic is most relevant or intriguing to you.
(1) Renewable Source Edition
Use of renewable source materials today
Sixty-four percent of respondents report currently using renewable source materials, with another 21% intending to start within the next three years. France, Spain and Brazil are particularly high-adopters of renewables, with 86% of French respondents, 78% of Spanish respondents, and 72% of Brazilian respondents reporting their use.
Motivations behind using renewable source
Customer / consumer demand is by far the most influential factor pushing companies toward renewables, with over a third of those who currently use renewable source materials (34%) naming it as the primary driver of their use. Another 26% called environmental impact the top driver. Competitive advantage was a distant third, as the chief motivator of 12% of renewable source users. The full benefit of renewable source materials on environmental and competitive factors becomes clear when looking at all of the added value renewables offer. Environmental impact and competitive advantage were each selected by more than half of respondents when they were given the option to share multiple advantages of renewable source use.
Challenges of renewable source use
Pricing remains a major issue for companies using renewable source materials, with half of respondents (50%) naming it as the top challenge to pursuing this type of sustainable sourcing. Functionality and availability are also areas of concern, with 20% and 17% of respondents naming these areas as their chief challenges, respectively. A number of factors keep organisations from adopting renewable source materials. Forty-four percent of those who intend to use these materials but have not started using them yet cited a lack of good alternatives for their industries as a contributing factor. This is a chief concern across a number of sustainable categories. However, this lack of alternatives is far from the only barrier that keeps more companies from switching to renewable sources materials. Thirty percent of respondents felt that the price point of renewable materials exceeded their budgets. Twenty-four percent felt available materials did not perform technically as needed.
(2) Biodegradable Edition
Use of biodegradable materials today
Fifty-eight percent of respondents reported currently using biodegradable materials, giving it the third-least common rate of adoption of the eight sustainability areas measured in this survey. Another 22% intend to introduce biodegradables into their processes in the next three years. That leaves one in five who have no plans to use biodegradable. Use of biodegradable materials varies widely by country, with Mexico reporting a soaring 90% adoption rate. Brazilians and Germans also report high rates of biodegradable materials use, at 69% and 63% respectively. On the other end of the spectrum, among countries with enough responses to draw any conclusions, only 26% of Italians reported incorporating biodegradable materials.
Motivations behind using biodegradables
Companies choose biodegradable materials most often for their environmental impact (29%), or in response to customer and consumer demand (27%). Technical performance and regulatory compliance play significant but lesser roles, with 14% and 11% of respondents naming them the primary drivers of biodegradables use respectively. While competitive advantage was rarely cited as the primary driver of biodegradable use, it’s clear that biodegradables do provide such an edge: nearly half of respondents named competitive advantage as a value-add of biodegradable. Regulatory compliance and labelling also appeared as significant areas of added value.
Challenges of biodegradeables
Pricing is the greatest challenge companies face in using biodegradable materials, with 41% of respondents naming it as such. Concerns around pricing are especially high in France (64% of respondents) and Brazil (57%). The most common reason that companies that intend to use biodegradables have not yet adopted these materials is a lack of good alternatives in their industries. Forty percent of respondents included this as a factor, making renewable source materials the only category where a lack of viable alternatives was more significant. A variety of other factors played lesser but still significant roles: price point (cited by 28% of respondents), lack of customer / consumer demand (28%), problems of technical performance (26%), and not knowing which materials to use (21%).
(3) People, Health & Safety Edition
Use of materials for people, health & safety today
Materials for health & safety are currently the predominant sustainability practice, with almost 80% of survey respondents already using them. Another 7% intend to introduce such materials within the next three years. Some countries already have even higher adoption of these materials. Ninety percent of French and German respondents and 85% of US respondents report using materials for health and safety today.
Motivations behind using materials for people, health & safety
Regulatory compliance is the leading force behind the use of no-hazard labels materials, by a significant margin. Thirty-eight percent of respondents named this their primary driver, compared to just 16% who chose customer / consumer demand and 13% who selected environmental impact. While employee safety was not offered as an answer choice, several respondents selected “other” and wrote it in. These materials provide significant added value both in regulatory compliance (59%) and in meeting internal compliance goals (38%).
Challenges of people, health & safety
Unsurprisingly, while regulatory compliance propels the use of materials for health and safety, regulations also prove a challenge in this area. Twenty-four percent of the users of these materials called regulations their top challenge in the health and safety category. This puts it just behind functionality (called the top challenge by 27%) and pricing (26%). Availability can also cause issues, with 17% calling it their most significant issue. The vast majority of those who intend to use no-hazard label materials are already doing so, but those who aren’t struggling with a lack of current customer / consumer demand (27%), not knowing which materials to us (20%), and materials that don’t have the right technical performance (20%).
(4) Reducing CO₂ Edition
Use of CO₂-reducing materials today
Only half of survey respondents report currently using CO2-reducing materials, making it the sustainability priority with the lowest adoption rate at this time. With nearly 30% intending to add CO2-reducing materials to their repertoire within the next three years, this may be about to change. France and Brazil reported notably higher levels of CO2-reducing materials use, at 65% and 62% respectively.
Motivations behind CO₂-reducing materials
Forty-two percent of those using CO₂-reducing materials are driven primarily by environmental impact, and 68% call it an added value of this category. Another 22% are driven by customer / consumer demand. Pricing and availability both cause significant challenges in this area: they are named the largest issues by 33% and 30% of respondents respectively. The most common reason that people who intend to use CO₂-reducing materials don’t yet do so is a lack of good alternatives for their industries. Thirty-seven percent cite this as a factor.
Challenges of CO₂-reducing materials
Regulations propel the adoption of materials with a low carbon footprint but also present many challenges. Thirteen percent called this their primary driver of low-CO₂ materials, and 35% chose regulatory compliance as an added value of the technologies. And yet, fourteen percent called it their main difficulty with low-CO₂ materials. Several additional factors play a role in preventing more widespread adoption of CO₂-reducing materials. Twenty-eight percent include lack of customer / consumer demand as a factor, while 27% don’t know which materials to use, and 23% say the materials don’t provide the technical performance needed. When these organizations do begin using CO₂-reducing materials, their primary drivers will largely align with those of the companies already working toward CO₂ reduction: customer / consumer demand and environmental impact.
(5) Reducing Energy Edition
Use of energy-reducing materials today
This category is the second-least practised of the eight sustainability areas, with only 57% of respondents reporting that they currently use energy-reducing materials. Another 22% intend to introduce energy-reducing materials into their work in the next three years. A final 21% neither use such materials now nor have any plans to start. Some countries reported much higher adoption rates: 73% of Spanish respondents are already using energy-reducing materials, as are 69% of German respondents and 67% of those in the United States.
Motivations behind energy-reducing materials
Energy reduction means energy savings—and that saves costs. While energy-reducing materials involve upfront investments, they also produce direct savings in terms of the energy needed for manufacturing and other processes. Energy savings and environmental impact play equal roles in driving this sustainability area forward, with 24% citing each as their primary driver in using energy-reducing materials. Customer / consumer demand (17%), competitive advantage (13%), and regulatory compliance (10%) are relevant but lesser contributors to the adoption of energy reduction programs.
Challenges of energy-reducing materials
Pricing is by far the most challenging aspect of using energy-reducing materials. Forty-two percent of those currently using these solutions find budget to be a challenge, while just 20% each call functionality and availability their chief challenges. The predominant barrier to incorporating energy-reducing materials is not knowing which materials to use. Thirty-eight percent of those who intend to add these materials within the next three years named this as a reason they have not done so yet. About a quarter of respondents feel there are no good alternatives for use in their industries, and the same amount say there is not a current customer / consumer demand. Issues with technical performance and high price points are lesser but relevant barriers, with 20% and 16% saying these stand in their way. Those who don’t yet use energy-reducing materials but want to implement them soon say the primary drivers will be customer / consumer demand (24%), energy savings (24%), and regulatory compliance (18%).
(6) Durability & Maintenance Edition
Use of materials for durability & maintenance today
Seventy percent of survey respondents already use materials in the durability and maintenance category, making it the second-most common sustainability practice after using materials for health and safety. Another 11% intend to introduce materials for durability and maintenance in the next three years. Of countries with significant representation in the Sustainability Survey, the United States, Brazil and Mexico lead in adoption of materials to promote durability. Eighty percent or more of respondents from each of these nations had already started using materials from this category.
Motivations behind materials for durability & maintenance
Thirty percent of respondents currently using materials for increased durability are driven primarily by customer / consumer demand. This is no surprise, as customers often see the benefits directly when their products require less maintenance and last longer. Unsurprisingly, technical performance and reduced maintenance stops are also significant factors in this sustainability area. Seventeen percent of respondents call technical performance the primary driver of using materials for increased durability, and 12% call reduced maintenance stops the primary driver. When asked about all the value added by these materials, 37% of respondents include technical performance and 30% include reduced maintenance stops.
Challenges with materials for durability & maintenance
Many of the barriers to achieving increased durability come down to issues sourcing appropriate materials. Nearly 40% of respondents who intend to work on this sustainability area don’t know which materials to use in order to increase durability and reduce maintenance needs. Twenty-nine percent can’t find good alternatives in their industries, and 19% say the materials that exist don’t have the right technical performance. While price point (a barrier for 33% of respondents) and lack of customer / consumer demand (a barrier for 14%) are also factors, these issues are in many ways secondary to learning about and finding materials that can perform as needed to replace less sustainable alternatives.
(7) Manufacturing Process Improvement Edition
Use of materials for manufacturing process improvement today
Currently, 69% of survey respondents report making manufacturing process improvements, with another 12% planning to make such improvements in the coming three years. Twenty percent have not and do not have plans to make these changes. The adoption of these materials varies widely from country to country. Nearly 90% of Brazilian respondents use them already, as do 83% of those from the United States and 80% of Mexican respondents. On the other end of the spectrum, fewer than half of Italian respondents report using materials for manufacturing process improvement at this time.
Motivations to using materials for manufacturing process improvement
A wide variety of benefits motivate businesses to undertake sustainable manufacturing process improvements. Nearly a quarter of survey respondents say that competitive advantage is the main driver of these practices, while another 17% find technical to be the most important benefit of this sustainability area. Many others are primarily motivated by reduced material costs (13%), customer / consumer demand (12%), environmental impact (11%), regulatory compliance (8%), and reduced maintenance stops (8%). Most of these factors were also called value-adds by large numbers of practitioners, as was energy savings.
Challenges of materials for manufacturing process improvement
Pricing is the most difficult aspect of making these improvements, according to 41% of respondents who have done so. Functionality is the chief concern for another 25% of them, and 22% most struggle with availability. Functionality proved to be an unusually common problem in Germany, with 61% of German respondents calling this the chief challenge in the area of manufacturing process improvements. Respondents who are not yet using materials for manufacturing process improvements most commonly struggle with finding alternative materials appropriate to their industries (33%) and knowing which materials to use (33%). They are most likely to start using these materials in the future due to customer / consumer demand (25%) and in the hopes it will bring competitive advantage (21%).
(8) Regional Sourcing Edition
Regional sourcing today
Regional sourcing is one of the more common sustainable practices in the industry, with 68% of respondents currently practising it. Another 21% want to introduce regional sourcing. Only 11% have no plans to start the practice, a lower figure than for any other sustainability area measured in this report. Regional sourcing is one of the more common sustainable practices in the industry, with 68% of respondents currently practising it. Another 21% want to introduce regional sourcing. Only 11% have no plans to start the practice, a lower figure than for any other sustainability area measured in this report.
Variations between regions
Regional sourcing is much more common in the Americas, with almost 80% of respondents there reporting that their companies already practise it, compared to just over 60% of those in EMEA. Though nearly 23% of respondents in EMEA want to begin regional sourcing, over 15% of respondents there report no intention to add such sourcing. In contrast, only 3% of respondents in the Americas say they have no intentions to begin regional sourcing.
Motivations & barriers to sourcing materials regionally
Unsurprisingly, regional sourcing is most frequently practised in order to ensure a secure supply of materials. Nearly 40% of respondents who source regionally call supply security their chief driver in this area, with smaller segments citing quality (19%). Cost (15%), competitive advantage (13%) and sustainability (13%). Regulations, while a pertinent factor in some of the other sustainability areas, were negligible in regards to regional sourcing. Two-thirds of respondents who are not yet sourcing regionally have found that issues with material availability stand in their way. Nearly a third call budget a limiting factor, and 11% are blocked by standing contracts with more distant suppliers. (Respondents could choose multiple barriers.)
Uncover more on this report and IMCD Industrial Solutions' perspective
Understanding the data
All the data explored in the coming pages is derived from an extensive IMCD Industrial Solutions survey, where top customers around the globe anonymously contributed their professional opinions and progress on their sustainability journey. The result is the 2024 – 2027 State of Sustainability Report, combining survey insights and input from IMCD experts on eight key topics deemed pertinent to sustainability in industrial sectors.
A total of 272 respondents answered questions about some or all of the eight sustainability focus areas, with many of the questions drilling down to ask subsets of respondents follow-up questions based on their current sustainability goals and practices. Survey responses came from 25 countries, a range of industrial practice areas, and companies of primarily small and medium size. Based on IMCD’s business areas and response rates, this report provides breakout data where appropriate based on region (focusing on the Americas and Europe, Middle East, and Africa (EMEA)).
Distributions' position in the sustainable conversation
Based on the findings of this report, a clear gap exists in the industry between the needs of industrial sectors and access to sustainable materials. As a distributor, we are positioned between two crucial players in the chemical world. It is our responsibility to step in and support small to mid-size companies in their sustainability journey by providing them with the information necessary for decision-making, and by advocating for their needs and challenges with producers. By doing this, we can begin to bridge the gap.
We say 'begin' because we know sustainable progress does not happen overnight. That's why it's even more important to take an active role in championing our partners' sustainability journeys. We know that, together, we can be at the forefront of sustainable innovation to create a better world for all.
Our Sustainable Solutions program
Our Sustainable Solutions approach, fueled by the data and insights of this report, stands apart from others in the industry. It aims to simplify industrial sustainability initiatives by providing the knowledge, products, and proof our partners need to make progress.
We know that industrial sectors face unique challenges when it comes to sustainability. Nevertheless, we see huge potential to make a difference. Industrial markets span the value chain, providing the opportunity to often change the way things are done from the start of chemistry. That’s why we are proud to offer our Sustainable Solutions program, designed to support our customers at every step of their sustainability journey; everything from industry insights and education to sustainable product selection and technical support.