SUSTAINABLE PRODUCTION

ASSIGNMENT 2

TOPIC-AIChE SUSTAINABILITY INDEX AND IT’S CASE

STUDY IN CHEMICAL INDUSTRY

SUBMITTED BY-

HARSHITA TIWARI

B.F.TECH ,VI th SEMESTER

 CONTENTS

S.NO TOPIC PAGE NO.

.
1. INTRODUCTION- 3
Sustainability Measurement
Sustainability Index
2. AIChE SUSTAINABILITY INDEX- 3-4
ABOUT
3. SIGINIFICANCE 4
4. OBJECTIVES OF AIChE SUSTAINABILITY INDEX(SI) 4
5. FACTORS OF MEASUREMENT 4-6
6. SCORING 6
7. CASE STUDY- USE OF AIChE SI IN CHEMICAL INDUSTRY 7-13
8. REFERENCES 14

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 LIST OF FIGURES

FIGURE DESCRIPTION PAGE NO.

NO.
1. Example of AIChE Spider Chart 6
2. Graph of scores of -strategic commitment of 8
sustainability
3. Safety Performance 9
4. Environmental Performance 9
5. Social Responsibilty 10
6. Product Stewardship 11
7. Sustainability Innovation 11
8. Value Chain Management 12
9. Representation of scores in spider chart 12
10. Segmentwise Classification 13

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 THE AIChE SUSTAINABILITY INDEX

INTRODUCTION-
i.Sustainability measurement-

Sustainability measurement is just a means to assess and manage sustainability of a

company/organization/industry/segment on a quantitative basis.

Sustainability is measured by assessing performance of Social, Environmental, and Economic

principles.Measuring sustainability can help with tracking and assessing progress,
encouraging broad participation by stakeholders, evaluating sustainability tradeoffs,
meeting or anticipating new requirements, finding programmatic barriers, rewarding
excellence, and communicating benefits and goals. Measuring sustainability allows
organizations to track and assess progress resulting from their sustainability efforts and
investments. Measuring sustainability on a program, project, or group of projects can
facilitate the owning agency in identifying programmatic barriers that they are encountering
so they can be addressed and removed. These barriers might be the result of policies, design
standards and specifications, or stakeholder agency policies. It encourages broad
participation of stakeholders in establishing sustainability goals.

ii.Sustainability Index-

Sustainability index is measure of sustainability, and attempt to quantify sustainability

beyond the generic concept.It is an aggregate sustainability indicator that combines multiple
sources of data.

They are instruments to measure the responsibility of a certain company in social and
environmental areas. The more they take these aspects into account as they develop their
business, the higher the score they will obtain.

AIChE Sustainability Index-

About-

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AIChE stands for American Institute of Chemical Engineers ,which is an organization
dedicated towards the chemical industry set up in 1990.

In 2009,it came up with the AIChE Sustainability Index. The AIChE SI is intended for use by
executives and business managers for monitoring of total company business lines.

AIChE SUSTAINABILITY INDEX SIGNIFICANCE-

The current sustainability indices don’t delve deeply into a company’s operations,
engineering, research or other business processes in sufficient depth to provide guidance
into what a company should do to be more sustainable. They are not data-driven, but rather
more checklist-oriented. In particular, there is little emphasis on product stewardship and
innovation, a gap which the AIChE‘s Sustainability Index (SI) is targeted to fill. Incorporation
of sustainability concepts into industrial operations is important to the future of corporate
performance, to public acceptance of industrial facilities, and to the engineering profession,
as well as individual engineers. As more corporations move down the path towards
sustainability, they are finding that they need meaningful metrics to measure their
sustainability progress at many levels — from practicing engineers to CEOs.

AIChE SUSTAINABILITY INDEX OBJECTIVES-

The objectives of the AIChE SI are to:

• leverage internal technical expertise to support the implementation and alignment

of sustainability within the field of chemical engineering and the engineering
profession in general
• contribute to the broader recognition for the engineering profession’s role and
contribution to sustainability
• drive reporting of sustainability data.

AIChE SUSTAINABILITY INDEX FACTORS OF MEASUREMENT-

1.Strategic Commitment to Sustainability-

 Stated commitment-
Public commitment to excellence in environmental and social performance
throughout a company’s value chain
 Presence and extent of sustainability goals-
Public commitment to voluntary codes and standards, including Responsible Care,
Global Compact, and others.Sustainability Reporting — timely and comprehensive
public reporting of sustainability performance.

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2.Safety Performance-

 Process safety-
Number and trend of process safety incidents, normalized by number of employees,
and occurrence of major safety incidents
 Employee safety-
Recordable and days-away-fromwork injury rates

3.Environmental Performance-

• Resource use-
Intensity of energy, material and water consumption, and use of renewable sources
of energy and materials
• Waste and emissions (including greenhouse gases)-
Intensity of greenhouse gas emissions, air emissions, wastewater, and hazardous
waste releases
• Compliance history-
Environmental liability,fines and penalties, and environmental capital investment

4.Social Responsibility-

• Community investment-
Contributions through employment, philanthropy and community development
projects

• Stakeholder partnership and engagement-

Extent of stakeholder engagement and partnership programs at the project, facility
and corporate levels

5.Product Stewardship-

• Product safety and environmental assurance process-

Product stewardship policies and goals, incorporation of a Responsible Care product
safety process, and engagement of value-chain partners to assure product safety
• System in place for compliance to emerging regulations(e.g. REACH)-
Involvement in major legal proceedings related to product safety, risk and toxicity.
Risk communication policies and goals, incorporation of a Responsible Care risk
communication process, and preparation to meet REACH requirements

6.Innovation-

• R&D in place to address societal needs (e.g. Millennium Development Goals)-

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 Corporate commitment to research and development, as evident in the amount of
R&D expenditure per net sales.
• Integration of sustainability concepts and tools in R&D-
Use of sustainability considerations and decision-support tools in R&D and
innovation processes.
• New products related to sustainability-
Development of products and processes with superior environmental, social and
economic performance

7.Value Chain Management-

• Environmental management systems-

Presence of an environmental management system (EMS) at the corporate and
facility levels.
• Supplier standards and management process -
Policies and procedures related to suppliers’ sustainability, presence of sustainability
evaluation and audits for first-tier suppliers, and management of second- and higher-
tier suppliers.

SCORING-
For each data series, the individual companies are ranked according to their performance.
The series is then scaled to the index range of 0–7. Within the seven major categories, the
individual data series that are in that category are weighted relative to its importance and
influence within the major category. Once each major category is completed, it is displayed
on the “spider” chart. Each heptagon represents the points from 0-7.

Example of spider chart for the sustainability measurement of American chemical

companies vs global chemical companies-

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 FIGURE 1.

CASE STUDY OF AIChE INDEX(APPLIED IN THE CHEMICAL INDUSTRY ( TOP 11

GLOBAL COMPANIES ) )-
For its inaugural analysis, AIChE measured the sustainability in the chemical industry by
assessing the top 11 global companies altogether.

The following companies were included in the analysis:

Air Products, Akzo Nobel, Ashland, BASF, Celanese, Dow, DuPont, Eastman, Lyondell,
Praxair, and Rohm & Haas.

SCORING-

The bars indicate the ranges of the companies’ scores, and the asterisks represent their
average scores. The assessment criteria included in each factor are scored on a scale of 0 to
7, with 7 representing the “ideal” or best practice. An overall score is also shown for each
factor, representing the weighted average of the criteria sub-scores.

DATA SOURCES-

The data sources that have been used to examine are score are-

Company-specific information -

• Annual sustainability/EHS reports

• Annual reports to the Security Exchange Commission (SEC)
• U.S. Chemical Safety and Hazard Investigation Board (CSB) incident reports

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 • Patent databases
• Trade journal and general media reports
• Socially-responsible investment analyses
• Other sustainability indices

Sector-wide information -

• U.S. EPA emission and hazardous waste reports

• U.S. EPA greenhouse-gas emission inventory
• CSB incident reports
• U.S. Bureau of Labor Statistics safety records
• U.S. Census Bureau Annual Survey of Manufacturers
• Trade journal and general media reports
• Socially-responsible investment analyses
• Other sustainability indices

1.Strategic Commitment to Sustainability-

On average, the companies received high marks on stated commitment and commitment to
voluntary codes, and lower scores on sustainability reporting and sustainability goals and
programs. They also scored somewhat poorly on third-party ratings (such as the Dow Jones
Sustainability Index and FTSE4Good). The ranges, however, show considerable gaps
between the top and bottom performers for each criterion. All of the major chemical
companies in this analysis have made public commitments to some aspects of sustainability,
and nine of the 11 have extended these commitments beyond internal environmental,
health and safety (EHS) performance and product safety to include resource efficiency,
product environmental performance, and supplier performance. Nevertheless,
commitments need to be supported by systems in place, including accountability through
public reporting and clear targets and initiatives. Although a few of the companies have
published well-respected, award-winning sustainability reports, many remain limited to
reporting internal EHS performance and anecdotal success stories. Only a handful of
chemical companies have developed clear and comprehensive sustainability targets.

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 FIGURE 2.

(Note- The bars indicate the ranges of the companies’ scores (the score they received
between 0 to 7 for that particular factor, and the asterisks represent their average scores(in
all the graphs))

2.Safety Performance-

Regarding employee safety, the chemical industry continues to be among the best in the
manufacturing sector. Behavior-based safety processes are becoming more widely adopted.
Process safety performance sub-scores, however, cover a wide range. Based on companies’
selfreported data and trends, the number of process safety incidents per 1,000 employees
for the 11 firms assessed is generally decreasing. However, three of the companies have
experienced a significant increase in process safety incidents, based on a three-year trend.
Responsible Care plant security audits have been completed by almost all (10 out of 11) of
the companies reviewed.

FIGURE 3.

3.Environmental Performance-
The chemical industry in general has made considerable progress on environmental

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performance over the past few decades. The recent performance of the 11 companies
included in this analysis also indicates continuous improvements — for a variety of
emissions, there is a clear downward trend, despite increasing production. Companies that
report energy use and greenhouse gas emissions have also experienced reductions, again in
spite of increasing production. Six of the 11 companies have made efforts to increase energy
use from clean and renewable sources. In addressing energy efficiency and greenhouse gas
emissions, some companies are inherently disadvantaged because of the energy-intensive
nature of the processes required to make their products. Nevertheless, these same
companies are among the strongest in terms of energy-efficient products and carbon
management innovations — receiving external awards and praise despite their inherently
carbon-intensive operations.

FIGURE 4.

4.Social Responsibilty-

All chemical companies have stakeholder engagement and partnership programs, although
their scope varies considerably. All of the 11 evaluated have facility-level Community
Advisory Panels (CAPs), and some have also established partnerships with nongovernmental
and community organizations to address specific issues. A few have also established
programs with community and opinion leaders to stay informed about emerging issues and
concerns. The chemical industry continues to be a source of employment and economic
development.

The extent of employment varies, from 0.5 to almost 4 employees per million dollars in net
sales, with specialty materials and industrial gas producers leading in the normalized
employment figures. Furthermore, the companies reviewed contribute 0.03% to 0.13% of
their net revenues for various philanthropic and community development projects — many
with emphasis on science and technology education. The image of chemical companies in
the community also varies widely, based on third-party recognitions.

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 FIGURE 5.

5.Product Stewardship-

All of the 11 chemical companies assessed have implemented Responsible Care product
safety and risk communication processes or equivalents. Some have also implemented
more-proactive standards than required by Responsible Care, which helps to explain the
ranges in scores. Such programs include value-chain engagement, education, and
partnership efforts to identify and manage product safety and environmental risks.
Furthermore, all of the participating companies are engaged in preparation for REACH
compliance. As expected, companies with a strong European presence appear to be better
prepared.

Although some of the 11 companies are experiencing legal challenges related to past
environmental and safety performance, these actions do not appear to have significant
effects on business performance.

FIGURE 6.

6.Innovation-

The wide ranges of the innovation sub-scores reflect the diversity of the chemical industry
-from those applying established technologies for the efficient production of commodity
materials to those relying on innovative products. Companies engaged in developing
sustainable products and processes have largely focused on environmental performance

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over a product’s lifecycle, especially in terms of the environmental impacts of customer use
of the product. Reducing greenhouse gases and improving energy efficiency are the main
drivers. A few firms are also engaged in improving customers safety and developing
innovations around critical social needs, such affordable healthcare and clean water for the
developing world.

Furthermore, several companies have also integrated the use of sustainability approaches
into their operations. This includes tools such as sustainability decision checklists, lifecycle
assessment, total cost assessment, and others. These tools, however, are not yet widely
used; although most of the major chemical companies evaluated have experience with
them, only three of the 11 have integrated them into their formal R&D and design
processes.

FIGURE 7.

7.Value Chain Management-

The Responsible Care Management System (RCMS) and RC14001, which combines elements
of RCMS and ISO 14001, are becoming the new standards for environmental management in
the chemical industry. All major chemical companies have implemented RCMS or RC14001
at the corporate level and are making progress, to varying degrees, on implementing an
EMS in all major facilities. Most of the companies reviewed have supplier policies related to
EHS and sustainability. Five require supplier environmental and/or safety evaluations, and
two require such evaluations for suppliers to earn a “preferred” designation.

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FIGURE 8.

Representation of the scores -

FIGURE 9.

Gray Shading = Ranges of individual company score

Blue Line = Simple average of 11 representative companies

Segment Wise Classification-

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 FIGURE 10.

Gray Shading = Ranges of company score

REFERENCES

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1. Official website-
https://www.aiche.org/ifs/resources/sustainability-index
2. The AIChE sustainability index the factors in detail ,by Carla D Cobb, B.Beloff ,
Dicksen Tanzil ,D.Schuster ,Jan 2009
https://www.researchgate.net/publication/283797856_The_AIChE_sustainability_in
dex_the_factors_in_detail
3. Benchmarking sustainability -
https://www.researchgate.net/publication/279715735_Benchmarking_sustainability

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