Throughout the global chemical industry, a steady stream of pressure is flowing upstream, while the downstream market is facing disruption. Resource constraints and growing environmental concerns are changing consumer perceptions of chemicals. Consumers are also showing their purchasing power. In order to explore how people’s attitudes towards sustainable development are changing, Accenture conducted a survey of 6000 consumers in 11 countries
In addition to the economic recession, the global chemical industry has maintained a relatively stable growth for decades. However, the industry is now at a turning point. New regulations, aging infrastructure and lack of consumer trust all put chemical suppliers at great risk of disruption, so chemical companies must be prepared.
Our survey reveals an encouraging trend – contrary to the long held view, consumers seem willing to pay more for sustainable products. However, buying decisions are still at a critical juncture. As a result, brands and retailers in the automotive, clothing, electronics, toys and furniture industries are seeking to address the growing concerns of consumers, especially around disposable plastics, in order to maintain brand loyalty.
Looking ahead, they are rethinking their product design, packaging and use of chemicals, embedding cycles throughout the product life cycle. When brands and retailers think about how to bring sustainable products that use cleaner ingredients into their lives, they want and need help – that’s where chemical companies can step in and accelerate.
Chemical suppliers should not worry about the transition to a circular economy, but should embrace it. This gives them an excellent opportunity to deliver innovative solutions to customers, unleash value, drive growth, and fulfill their sustainability commitments. By achieving recycling, chemical companies can become powerful partners for manufacturers, suppliers and retailers to help them respond quickly to changes in consumer preferences. And the potential rewards are compelling. How can chemical suppliers tap this growth potential on a large scale?
In the circular economy, today’s linear “take as you go” model – making materials into products, used products and discarded materials – has been replaced by a method to eliminate the concept of waste. Release new value by continuously maintaining the most efficient use of products, components and materials. Materials and molecules are continuously recycled through the value chain to reduce energy and resource consumption, creating the potential for cost reduction and Reinvestment growth. This can be achieved by embedding circles inside and downstream.
As raw materials account for a large proportion of the total cost, recycling molecules from old products can use renewable alternatives that are less price sensitive, and encourage the design of reusable products. Adopting the principle of green chemistry to reduce the development and use of harmful substances is another beneficial way to adopt internal circulation.
In order to develop more durable and environmentally friendly products to support sustainable development, chemical manufacturers are in an ideal position to guide downstream companies to re formulate formulations and re consider material input. A key difference will be to work with brands and retailers to provide them with the important consulting and technical capabilities they need to redesign their products in a circular economy.
With the development of the chemical industry, new business models are emerging, which enable chemical manufacturers to obtain value at each stage of the circular value chain and turn disruptive changes into their own advantages.
Changing the mindset of consumers and even being willing to pay more for sustainable products opens exciting new opportunities for chemical suppliers who are ready and willing to move to a more circular future. This report provides useful guidance and valuable insights on how to start, and explores ways to release value, accelerate growth and promote sustainable development of circular economy.
