EQ Investors (EQ) has joined a multi-trillion-dollar coalition of investors co-ordinated by ShareAction issuing a joint statement targeting the 13 biggest chemical companies in Europe, insisting that they set a path to transition away from their reliance on fossil fuels to live up to the climate policies many have publicly committed to.

Penny Fowler, Head of Corporate Climate Campaigns at ShareAction, said: “With a globally significant carbon footprint, the chemicals industry’s huge reliance on fossil fuels is often overlooked as a major contributor to global warming.

It is time Europe’s chemicals industry turned high-level commitments into practical deeds and set out a clear path of how they will transition and transform the industry, from reliance on climate damaging fossil fuels to cleaner and greener energy sources.

The case for decarbonising the chemicals industry is economic as well as moral. The soaring cost of gas is showing how dependent this industry is on fossil fuels. As the world pivots towards a greener future the risks of this business model are clear, and they will only keep growing. The evidence is there: green chemicals are essential for long-term profits, people, and planet.”

The chemicals industry has historically not had the same level of attention and scrutiny over its fossil fuel use as some other major sectors, such as travel or agriculture. Investors are increasingly recognising the risk that is posed by the industry, which is underprepared for a 1.5C-aligned transition.

The good news is that chemicals companies still have time to set out robust decarbonisation plans over the short, medium and long term, the investors said. They asked for this plan to include a drive to electrify chemical production processes and switch to renewable energy sources.

The statement also recommends that companies change the make-up of their feedstocks (raw materials used in chemical production processes) so that they are made of emissions-neutral materials, instead of fossil fuels. There are other, targeted asks: eliminating woody biomass as an energy source, and aligning CapEx, the term for ‘capital expenditure’ which means the money these companies spend on their plants and processes, with 1.5C pathways.

Chemicals companies have made significant strides in certain areas, partly thanks to ShareAction’s campaigning and investors’ engagement. EQ have signed on to letter to four chemical companies held in its portfolios including: Air Liquide, Croda International, Koninklijke DSM, and Givaudan.