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Chemical sector under scrutiny in EOS’s Q1 Public Engagement Report

The Q1 Public Engagement Report from EOS at Federated Hermes takes an in-depth look at the decarbonisation challenges faced by the chemical industry. Plus, protecting digital rights and addressing social injustice.

Fast reading

  • How the hard-to-abate chemical sector can play a role in the low carbon transition.
  • Regulation has failed to keep pace with the digital revolution, leading to social harms that pose risks for companies, investors and individuals.
  • Addressing social inequities, including those exacerbated by the pandemic, can help to create long-term value for investors.

Chemicals are essential inputs for many industries, with chemical use pervasive and entrenched in the modern world. Production problems in the chemical sector can lead to shortages in other industries that rely on their by-products, including meat-processing and the manufacturing of fizzy drinks.

Like the steel industry, the chemical sector is considered “hard-to-abate”, meaning that the solutions to reduce its greenhouse gas emissions are either technically challenging, prohibitively expensive, or both. And as with all energy-intensive industries, the sector is under growing pressure to transform.

In EOS’s Q1 2022 Public Engagement Report, which takes a detailed look at the challenges facing the chemical sector, US engager Joanne Beatty explains how we are engaging with these companies, identifies some of the key risks and opportunities, and signposts the road to a low carbon transition.

“Chemical companies that invest in reducing carbon emissions and capitalising on the opportunities presented by the climate transition will strengthen their position and sustainability,” she says. “This includes solutions such as emissions neutral feedstock, electrification, renewable energy, and green hydrogen.”

Also in this issue, EOS shines a spotlight on some of its key social engagement themes. US engager Nick Pelosi identifies some of the social harms posed by the internet and social media, the risks for companies, investors and individuals, and how EOS engages on these. In a related Q&A, Yu-Ting Fu, an engager with the Asia team, explains China’s new legislation covering data privacy and data security.

Finally, US engagers Diana Glassman and Emily DeMasi examine how social injustice polarises society and hinders economic growth, creating systemic risks. They explain how addressing social inequities, including those exacerbated by the pandemic, can help to create long-term value for investors.

They call for three positive changes at companies. First, build more inclusive boards, workforces and cultures that help to dismantle obstacles and enable all

individuals to maximise contributions to their companies. Second, reduce harmful company practices that perpetuate injustice in society, and third, develop proactive strategies and products that reduce inequities.

To find out more, read the EOS Q1 Public Engagement Report.

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