In March 2021, the Council of the European Union approved EU Chemicals Strategy for Sustainability, a long-term industry reform strategy published by the European Commission as a part of European Union’s (EU) efforts towards its zero pollution target under the European Green Deal (EGD). The most ambitious regulatory overhaul for the chemical industry in the past few decades, this plan signals a larger shift towards a sustainable supply chain in the chemical industry.

The strategy seeks to regulate the chemical industry more heavily to minimize its adverse health and environmental impact. It posits that considering the fundamental role of chemical across all aspects of human lives, the industry has great potential not only to develop a safer and more sustainable industry, but also to establish a foundation for a sustainable future. It says, “Chemicals also are the building blocks of low-carbon, zero pollution and energy- and resource-efficient technologies, materials and products.”

To that end, as summarized by the European Commission, the strategy lays out two main objectives: citizens and environmental protection and innovation for safe and sustainable chemicals. The action plan for the achievement of those objectives covers banning harmful chemical ban, clearly defining essential products, and promoting investment and innovation, among others.

This move by EU marks a wider global movement towards sustainability. In the last few years, big companies have incorporated sustainability into their business transformation strategy, driven largely by growing market demands. Industry giants such as Clorox, Dell Technologies, and Apple have made pledges to reach carbon neutrality through recycling initiatives and sustainable supply chain (SSC) implementation.

In recent years, SSC has gained popularity. Many studies have found that supply chain typically accounts for more than 80% of a company’s greenhouse gas emission. Combining business and environmental bottom lines, SSC as defined by the Sustainable Supply Chain Foundation “integrates environmentally and financially viable practices into the complete supply chain lifecycle”.

Many companies today have laid out a clear purpose statement pertaining to sustainability, driven by product and service innovation, customers demand, and industry and governmental regulatory changes. Similarly, such commitment to sustainability is reflected in Bahtera’s new purpose statement, which is “to provide the people with essential products that are safe and effective for better quality of life”. In line with EU’s view on the chemical industry, the phrase ‘better quality of life’ alludes to the critical role of chemicals in human lives along with the industry’s responsibility for consumer safety and environmental preservation.

The establishment of a purpose statement focusing on sustainability however doesn’t always translate to tangible actions. According to Forbes, while around 88% of companies have created a clear sustainability purpose statement or on the way to do so, only half have actually managed to reduce their shipping miles. In the same vein, businesses’ commitment to holding their suppliers to the same sustainability standard is not always possible in its implementation due to limited visibility over the overall process.

The question then is how do we put words into practice? This question is somehow easier to answer in the heavily regulated chemical industry. EU chemicals strategy puts a heavy emphasis on promotion of safe and sustainable chemicals. It claims that regulatory initiatives “have to a large extent been established, but substitution of most harmful substances has not occurred at the expected pace”.

In the chemical industry, many requirements have been established along with their certifications, covering quality and processing requirements. While regulators are on the way to establishing a more comprehensive umbrella for chemical safety, the existing regulations have laid out the groundwork to ensure the safety and effectiveness of chemical-based products.

Good Manufacturing Practice (GMP), for example, provides guidelines on production and quality control processes. The standard ensures that products in the food and beverages, cosmetic, dietary supplements, and medical devices are produced in high quality and safety standards every step of the way. Other industry-specific standards include pharmaceutical grade and halal certifications.

In the broader sense of sustainability, one of the biggest challenges facing companies worldwide in implementing environmentally friendly practices is the lack of visibility in a multi-tier supply chain. While fixing this complex issue requires a long process of sweeping industry practice transformation, there are ways for companies to start ensuring the implementation of sustainability in their value chain. A simple measure that is available right now is environmental certification. The Roundtable on Sustainable Palm Oil (RSPO), for example, provides certification for companies that comply with a set of environmental and social criteria to minimize palm oil’s adverse impact.

These environmental, product safety, and manufacturing practice certifications are the backbone of Bahtera’s sustainability practice. All of our suppliers have obtained the necessary certifications pertaining to their respective industry as our way to ensure ethical sourcing. At the same time, we are working hard to improve our digital capabilities to accommodate greater visibility across our supply chain in the long run.

This move is not only ideal, but also inherently necessary. EU chemicals strategy is only the latest in a string of regulatory shifts towards sustainability, particularly in the chemical industry, by countries all over the world. In 2019, China introduced a bill regulating control for environmental risk and management of chemical substances. A few years before, in 2016, the US House of Representatives approved the rewrite of the country’s Toxic Substances Control Act (TSCA). The new TSCA prescribes more strict chemical safety reviews and harsher barrier for a new chemical to enter the marketplace.

It is clear that the chemical industry is changing for the better. As key players in the industry, it is imperative for us to change along with it, for the betterment of the people, the planet, and the future of our industry.