Increasing Importance of Sustainability in Business

Sustainability is an increasingly important priority in today’s business and consumer world – and understandably so. Although sustainability isn’t a new concept, its integration into daily business practices is prevalent, and important to shareholders, investors, customers, and employees.

Global environmental, social, and governance (ESG) has become a set of guiding sustainability principles for larger, publicly traded companies across the nation. Once considered aspirational for the business community, ESG is now a critical component of business decision making. This shift represents the impact of these initiatives to not only the business community, but to consumers and the workforce.

In recent years, sustainability initiatives have trickled downstream to varying facets of business. For companies of all sizes, these measures have provided a meaningful return on investment. As employees are becoming much more aware of their individual impact, they are placing more value on working for and buying from companies that actively incorporate sustainability practices into their operations. According to a study by McKinsey of U.S. employees, workers expect their jobs to bring a significant sense of purpose to their lives. The report finds that “people who live their purpose at work are more productive than people who don’t. They are also healthier, more resilient, and more likely to stay at the company.”

Companies are seeking commitment to the environment and sustainable practices in their partners and suppliers, too. That’s why businesses that take proactive steps to plan, measure, and deploy these efforts experience greater growth while increasing efficiencies, mitigating risks, and attracting a talented workforce. These value-driven roadmaps give companies the competitive advantage to meet consumer demands and tap into new, previously unforeseen opportunities.

Sustainability in the Chemical Industry

The production, storage, management, and delivery of essential chemicals has come into the environmental spotlight recently. Increasingly stringent environment regulations are a fact, but so is the increasing demand from customers around the globe for more sustainable solutions.

Now more than ever, the chemical industry is faced with greater expectations on how chemical manufacturers, chemical distributors, and chemical formulators and those responsible for warehousing, transportation, storage, and related servicing, are meeting these sustainability challenges. No matter what stage of chemical distribution your business is a part of, understanding the evolving sustainability practices and incorporating these standards into business planning has become critical to a company’s success.

This is as true for the paint and coatings industry as any other. Environmental product declarations (EPDs) are making their way into the industry, and paint and coatings manufacturers are looking to their supply chain for more detailed environmental data. With rising temperatures and increasing severe weather events, the need for sustainable solutions has never been more urgent.

As critical supply chain partners, chemical distributors are in lockstep with their customers' demands for sustainability by moving away from a reactive, compliance-driven approach to an innovative, solutions-based approach to storing, delivering, and producing chemicals. Implementing these values into business models better prepares companies to mitigate risks in the future and comply with new government regulations. Embracing this forward-looking approach will also ensure that the chemical distribution industry remains nimble and attractive to skilled talent in the years to come.

Important Steps Taken to Implement Sustainability Practices

While many member companies of the National Association of Chemical Distributors (NACD) may be small, our collective reach is huge – meaning that our efforts to improve commonsense sustainability priorities is paramount. Our customers, suppliers, and communities want increased focus on this issue, and the NACD is taking the necessary steps to advance this initiative.

Along with other organizations in the chemical industry, NACD members have realized their role in advancing these sustainability priorities by delivering environmental and social value through our working practices and business strategies. “Advancing Stewardship. Creating Connections.” is a part of NACD’s tagline, representing our work to constantly improve and implement better practices in our industry – all while connecting large-, medium-, and small-sized distributors together to achieve these shared goals.

We have experienced a growing demand for sustainability among our members' customers, suppliers, and partners. NACD members are rising to this important challenge by incorporating renewable energy into their usage mix, while others are identifying opportunities to decrease energy and water usage, increase fleet fuel efficiency, and repurpose and minimize waste. The gradual substitution of bio-based alternatives for the traditional chemical portfolio is another opportunity that NACD members have started to implement into their practices.

Sustainability in Responsible Distribution

At the core of the NACD is Responsible Distribution, a third-party-verified environmental, health, safety, and security (EHS&S) program that allows members to demonstrate their commitment to the continuous performance improvement in every phase of chemical distribution. Through Responsible Distribution, members act as stewards in every phase of chemical storage, handling, transportation, and disposal, which increases transparency, and incorporates sustainability and innovation around best practices.

The Responsible Distribution program was recently updated to better align our industry’s EHS&S standards with those of the ever-evolving sustainability landscape that our current and prospective customers expect. This year, the NACD has incorporated a new sustainability code into the Responsible Distribution program. The creation of this new code covers environment, labor and human rights, ethics, and sustainable procurement, giving companies the ability to create a tangible structure around sustainability that works for their business. This notable change combines different categories into the latest code, such as corporate social responsibility; environment, water, and energy; recycling, re-packaging, re-selling, re-using, and other waste minimization efforts; and other important sustainability measures. The new code gives our members the tools to increase efficiency and cost-effectiveness though a collaborative network of peers and customers. This framework also gives chemical distributors the ability to effectively demonstrate to partners and customers what they have achieved so far and identify initiatives they have not yet tackled.

The Responsible Distribution’s sustainability code represents an important step in the NACD’s efforts to establish well-defined principles for our members to follow while giving businesses the ability to adjust where needed. It’s clear that our member’s consumers and purchasers, like paint and coatings customers, value this certification of and approach to these high sustainability standards, and we take pride in this meaningful work.

Sustainability in the Paint and Coatings Industry

With the implementation of new regulatory requirements, paint and coatings businesses have had to quickly adapt to keep growing while meeting sustainability, performance, and cost demands. This includes enhanced reporting by companies on the life cycle and impact of their products and their efforts to strengthen renewal, recycling, and waste reduction initiatives.

For the chemical distribution and paint and coatings industries alike, supply chain optimization is central to businesses’ recovery from the unprecedented challenges of the COVID-19 pandemic. Companies are now tasked with investing in innovative and efficient processes, without significantly raising costs on consumers or compromising the quality of the product. These efforts will take time, but they are key to improving supply chain sustainability and resiliency.

Conclusion

Businesses are now trying to differentiate themselves through their sustainability work, efforts to meet these benchmarks, and ability to set new goals. Customers will continue to hold companies to a higher standard, and it will be up to businesses to determine how to produce high-quality products and services in a safe and sustainable way.

As commitment to sustainable working practices becomes increasingly more important to customers and employees, the implementation of environmental and social standards will help businesses retain skilled employees and remain attractive to those entering the workforce. The path to sustainability is ever-evolving, and unique to each business. However, through a sustainability strategy, businesses can create tremendous value, driving growth, resilience, competitiveness, innovation, operational safety, and a loyal customer base.

The chemical distribution industry supports critical industries by delivering essential chemical products used in paint and coatings, water treatment, food manufacturing, pharmaceuticals, and more. The NACD recognizes the great responsibility of applying and developing commonsense, sustainable business practices and supply chain operations. Our ongoing commitment to sustainability has reassured existing customers of our efforts to uphold a higher standard of excellence and encourage new customers to come on board. The NACD’s ethos of continuous improvement is defined in our Responsible Distribution program and this ongoing progress reaffirms to our industry partners and customers that we are focused on building a business that delivers a better future.