Sustainability


The green agenda is superseding government policy

Image courtesy of Braskem

The issue of sustainability and environmental, social governance (ESG) is not new in Latin America. As a region whose vast natural resources are matched by historic inequality, political discord and social turbulence, the themes of sustainable project development, for both the environment and surrounding communities, have been a long-term focus for the chemical industry.

However, two fundamental changes have taken place in recent years. First of all, the green agenda has been firmly thrust into the mainstream, with North American and European governments aligned with international corporations setting clear targets and ambitious goals with respect to eliminating carbon emissions. In turn, the investment community has taken note. A report from Morningstar released in April revealed that sustainability-focused funds attracted record inflows during the first quarter of 2021, pushing global assets under management in ESG funds to nearly US$2 trillion.

Secondly, the Covid-19 pandemic has thrown fuel onto the fire of long-standing and deep-rooted social inequality, particularly prevalent in Latin America. Protests have broken out across the region, even in more stable nations such as Chile, with a clear message that populations expect more from their government and industrial elites.

Rina Quijada, VP business development and research Latin America for IHS Markit, explained: “If we look at Latam in a global context we can see investment opportunities to develop an industry that is much more in line with environmental sustainable goals. There is a significant socio-political change taking place globally for a much more diverse and equitable society.”

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Quijada highlighted the changing attitude towards renewable energy, sustainability and commitment to net zero carbon emissions as windows of opportunity for investments giving more options to energy investors. “Countries that are not fully committed to this agenda will realize that change will be necessary if companies want to sell products abroad, and pressures from the financial community will increase as customers demand a higher level of compliance,” she stated, adding: “The energy transition train has already left the station. We believe Latin America will embrace it, perhaps not as quickly as Europe, USA or China, but change has already started.”

Richard Rehg, VP commercial for Pilot Chemical Company, the Ohio-based specialty chemicals organization and parent company of Mexico-based Órgano Síntesis, stated that sustainability has become a pre-requisite in business. Expanding on his company’s focus, he said: “Pilot Chemical Company has been active in this space before sustainability was a trend, both through our focus on continual improvement driving efficiencies in our operations and supply chains, and through supporting the evolution of product stewardship activities within the chemical industry.”

The service sector has also adapted to the trend, with environmental firms experiencing remarkable growth in recent years. Jatyr Drudi Junior, VP Nalco Water Heavy & Downstream Latin America at Ecolab, spoke of the issue of access to freshwater in Latin America where 16 of the region’s largest cities are facing water-related issues, including Mexico City, Lima and São Paulo: “The water-intensive chemical industry must actively innovate and implement technologies and processes that minimize water consumption.”

Dennys Spencer, COO of Ambipar, a Brazilian environmental services and consultancy group with global operations, mentioned the serious investments the company has made into research and development to improve waste management processes that turn residues into useful products: “Specifically, we have been doing a great deal of R&D to transform and make use of waste so that it can be reintroduced into the industrial processes as a raw material in various sectors.”

Spencer gave the example of the pulp and paper industry, which is known for producing considerable amounts of organic and inorganic waste, for which Ambipar is working on a project to make compost out of organic waste to be used as a fertilizer: “In terms of inorganic waste that was previously disposed of, Ambipar recycles it to produce construction materials. We also work with oil and gas industrial waste. There have been considerable investments in our energy efficiency, namely, solar panels, the usage of natural gas instead of diesel and rainwater harvesting.”

“We are witnessing a change in the gender dynamics of the industry across Latam. We recognize that the success of our innovation and business come when our colleagues feel fully able to collaborate and harness each person’s different experiences and diversity of thought.”

Adriana Nobre, Managing Director - Latin America, Croda

Diversity and Inclusion

The topic of sustainability should also been seen from a business perspective. For an industry to remain competitive and attract the best talent, it should be able to draw from the largest talent pool possible. New industries such as tech, from start-ups to the “Big 4” US tech giants, have been successful in hiring a new breed of executives from diverse backgrounds. On the other hand, more traditional primary industries, such as mining, oil and gas and chemicals, have struggled to capture the imagination of the modern workforce. However, this is changing as companies and associations prioritize the future of their workforce.

Edison Terra, VP olefins and polyolefins South America at Braskem, Latin America’s largest petrochemical producer, gave his thoughts on the subject: “We believe that you need diversity in order to solve complex problems by approaching scenarios in different ways and leveraging from the knowledge and slice of genius that different people have to bring to the table.”

The participation of women in a traditionally male-dominated industry, particularly at the C-suite level, is one of the areas Latin America’s chemical industry has been focusing on. Looking at the profile of the 50 interviewees for this report, there is still work to be done, but gradual progress is apparent. Adriana Nobre, Croda’s managing director for Latin America, elaborated on the company’s commitment to diversity and inclusion: “We recognize that the success of our innovation and business come when our colleagues feel fully able to collaborate and harness each person’s different experiences and diversity of thought.”

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Nobre mentioned that Croda’s target is to achieve a gender balance across the leadership roles in its organization by 2030, and she believes we are witnessing a change in the gender dynamics of the industry across Latam: “We are headed in the right direction and I am very optimistic that the chemical industry will drive important contribution fostering a more diverse workforce in the region”.

“We believe that you need diversity in order to solve complex problems by approaching scenarios in different ways and leveraging from the knowledge and slice of genius that different people have to bring to the table.”

Edison Terra, VP Olefins and Polyolefins – South America, Braskem