This Annual Special on Sustainability brings together insights from the CEOs of leading global brands as they reflect on their sustainability journeys, strategies, and future priorities. Through a series of responses, industry leaders share how they are integrating environmental responsibility into core business practices, innovating for impact, and addressing climate and resource challenges. Their perspectives offer a compelling snapshot of corporate sustainability in action—visionary, accountable, and driven by purpose.
Anand Srinivasan, Managing Director & Head of Polycarbonates ISC
Anand Srinivasan, Managing Director & Head of Polycarbonates ISC, Covestro India, states that Sustainability is no longer a choice but a strategic imperative. It demands cohesive action across the value chain, backed by policy support, innovation, and cross-sector collaboration to create resilient, future-ready businesses.
Chemical Industry Digest (CID): Are sustainability goals becoming more central to core business strategy, or are they still largely seen as compliance-driven initiatives? The industrial scenario is awash with discussions on Sustainability. But are chemical and allied industries making tangible progress towards carbon-light manufacturing? To what extent is there real momentum behind using renewables, biomass, and CO2 as alternative sources for chemical building blocks? How far have companies moved beyond pilot-scale initiatives to true industrial-scale circular manufacturing?
Anand Srinivasan (AS): Mounting pressure from consumers, regulators and investors is driving chemical industry to keep sustainability at the core of its business strategy. Higher energy costs and rising carbon emissions associated with growing supply chain complexity also add to the urgency for companies to streamline environmentally wasteful processes and meet sustainability targets.
Sustainability is about more than just reducing emissions and adhering to statutory requirements. The chemical industry is making tangible progress on sustainability by finding alternatives to traditional business practices and prioritising initiatives like green chemistry, circular economy models, and the adoption of renewable feedstocks and energy sources. This includes replacing hazardous chemicals with safer alternatives, maximizing material usage, and reducing waste generation.
To achieve sustainability goals, we must dive deep into how suppliers, manufacturers, contractors, and consumers interact, in order to understand and develop sustainable solutions that address the entire product lifecycle. Covestro has also set itself the goal of manufacturing its products entirely on the basis of alternative raw materials in the long term. The company is introducing more and more circular and climate-neutral plastics into the market for various applications and industries. We also provide “CQ label” on products that are made from at least 25 percent alternative raw materials, helping our customers identify more sustainable solutions.
Question 1 (part 2): To what extent is there real momentum behind using renewables, biomass, and CO₂ as alternative sources for chemical building blocks?
AS: Covestro uses carbon dioxide (CO2) to create chemical building blocks called isocyanates. These isocyanates are essential ingredients for making polyurethanes – versatile plastics that can be formed into either soft or rigid foam materials. You encounter these polyurethane products in your daily life – they’re in your mattress, car seats, building insulation, and even the insulation in your refrigerator.
Question 1 (part 3): How far have companies moved beyond pilot-scale initiatives to true industrial-scale circular manufacturing?
AS: The chemical industry has made path-breaking innovations in developing and scaling it up to reasonable industrial scales to support various end-use industries. Most chemical companies today have a broad range of products. This has been achieved adhering to stringent standards and certifications.
Question 2: How is your company integrating sustainability into your business model, and what key steps have you taken to reduce your environmental footprint? What are the most promising routes today for achieving sustainable manufacturing: a. fuels & feedstocks – transition to biobased, renewables, hydrogen? b. revisiting existing products, processes and chemistries; doing away with harmful products, greening existing processes, process intensification? c. any other?
AS: Sustainability an integral part of our strategy. We are driven by innovation and strive to grow with products and technologies that benefit society and reduce the impact on our environment. The chemicals industry has been increasingly shifting toward renewable raw materials. Covestro has been actively adopting alternative inputs over the years to reduce its dependence on fossil resources like petroleum and advance its goal of becoming more climate neutral.
We harness carbon from biomass and feed it back into the production cycle—progressing the principles of a circular economy. The bio-based raw materials we use are derived from organic waste, such as used oil and grease. They are produced by suppliers according to the mass balance method of the ISCC PLUS standard. These suppliers provide Covestro with suitable raw materials, including phenol and acetone for producing the high-performance plastic polycarbonate, and benzol and toluol for isocyanate, which is needed for polyurethane foam. Beyond sourcing renewable raw materials, We are also pioneering processes like chemical recycling and implementing services that enable circular design, ensuring products are durable, repairable, and recyclable from the outset.
Question 3: How are companies navigating the trade-offs between sustainability, scalability, and cost-efficiency in manufacturing innovations? How are companies preparing for a future where fossil fuels may no longer be the dominant feedstock for chemical production?
AS: Chemical companies play a critical role in circularity, as they are enablers and solution developers for many other industries. However, the shift to circularity requires chemical companies to invest in the development of new skills and transformative technologies for recovery and reuse of chemicals from both industrial processes and end-of-life products. The key to success in the circular economy is the effective monetization of circular practices. The most important asset lies in the realization of the “true value” of circular products, which ultimately refers to generating value for all involved stakeholders in a dynamic ecosystem.
The industry faces a shortage of raw materials essential for sustainability-driven solutions. To overcome this challenge, building strong value chain partnerships will be crucial. For example, chemical companies will need to work closely with logistics companies that can collect, clean and sort that plastic waste and ship it to chemical company locations. Partnering with customers will also be important—not only to understand their needs but also to form offtake agreements, which many seem open to, especially in light of recent developments with new plants. Ultimately, the ability to deliver sustainability-focused solutions reliably, efficiently, and at scale will depend on strong collaboration across the value chain, from raw material suppliers to end customers.
Question 3 (part 2): How are companies preparing for a future where fossil fuels may no longer be the dominant feedstock for chemical production?
AS: Fossil raw materials such as petroleum, on which the chemical and plastics industry still heavily depend, can be replaced. Worldwide, the industry consumes around 14 percent of all petroleum. Its extraction, processing and use, however, is very climate intensive. For example, in their life cycle, plastics are responsible for about 3.4 percent of all greenhouse gas emissions.
Question 4: There are many sustainability certifications and indexing today including on sustainability reporting. Could you please let us know your company’s position on this?
AS: Sustainability efforts are hard to verify which creates a risk of greenwashing. One of the means to address greenwashing is sustainability certification. Certificates guarantee that a product or service is truly as sustainable as it claims to be and complies with a set of predetermined standards. Thus, sustainability certifications enhance credibility and trust.
Covestro actively supports sustainability and aligns with the EPEAT Registry, a global ecolabel for electronics and technology products. Our recycled materials and supply chain management practices contribute to the EPEAT’s goals of reducing environmental and social impacts across the electronics life cycle. Our PCR materials meet EPEAT’s eco-label quality standards, aligning with the industry’s high standards for sustainable manufacturing. We hold certifications like ISO 9001, ISO 14001, ISO 50001, and ISO 45001, ensuring quality, environmental, energy, and occupational health and safety management. Furthermore, we have achieved ISCC PLUS mass balance certification for most of our manufacturing sites, which guarantees the traceability of recycled or bio-based raw materials. Covestro also aims to achieve net-zero emissions by 2035 in their own production and external energy sources, along with a net-zero value chain by 2050.
Question 5: How critical is in-house R&D in driving the shift towards sustainable production pathways versus collaboration with start-ups, academia, and tech providers? How is the development of new processes based on sustainability taking place?
AS: As the chemical industry undergoes a transformation toward climate neutrality and circularity, R&D plays a vital role in driving sustainable production pathways. While in-house R&D ensures long-term strategic control and technical expertise, collaboration with academia and technology providers is equally critical – bringing in agility, fresh perspectives, and access to emerging technologies. In today’s dynamic innovation landscape, companies that successfully balance internal capabilities with external partnerships are better positioned to respond to evolving sustainability challenges and market expectations.
At Covestro, we have set an ambitious target— by 2025, 80% of project expenditures for R&D to go toward areas that contribute to the United Nations Sustainable Development Goals (SDGs). Every R&D project must demonstrate a positive impact on at least two of the pillars of People, Planet and Profit to move forward. Our key areas of research include chemical recycling technologies, alternative raw materials, process improvements, digital transformation, and circular economy innovations. We also have strategic academic collaborations—to leverage cutting-edge research and co-develop sustainable solutions.
To sum up, both in-house R&D and external collaborations are critical, because in-house R&D provides core expertise and direction, while external collaboration accelerates innovation and provides complementary capabilities. Integration of both approaches maximizes impact and efficiency.
Question 6: Where does the hydrogen economy fit into the sustainability roadmap of the hydrocarbons sector and downstream sectors? What are the challenges you see in scaling up green hydrogen and integrating it into existing chemical value chains?
AS: Hydrogen is an important enabler for raw material transformation which not only helps in reducing dependency on fossils but also help to support climate neutral production processes. It is also an important component for decarbonizing energy-intensive sectors. Hydrogen plays an important role in Covestro’s Sustainability Roadmap. However, there are certain challenges for scaling up and integration of green hydrogen in chemical value chain, these include –
- The efficiency limitations in current electrolysis technologies
- Infrastructure limitations for large-scale production
- Lack of significant investment in infrastructure
- Cost competitiveness against conventional processes
- Limited availability of green hydrogen
- Need for extensive renewable energy infrastructure
- Transportation and storage infrastructure requirements
Question 7: Can you share your company’s ESG strategy, and how it aligns with the welfare of your stakeholders, of local communities and society as a whole? What steps have your company taken to ensure a diverse, inclusive, and equitable workplace?
AS: Our ESG (Environmental, Social, and Governance) strategy is built on the foundation of creating long-term value for all stakeholders—our employees, partners, local communities, and society at large—while driving sustainable innovation and responsible business practices.
Our environmental initiatives are focused on climate action and resource efficiency, directly contributing to the health and sustainability of local ecosystems. We are committed to achieving climate neutrality, and each Covestro site has set a target to reduce its specific energy consumption by 20% by 2030, using 2020 as the baseline. Regular reviews of energy performance ensure accountability and progress.
Initiatives like “Not a Single Drop” and “Operation Clean Sweep” aim to minimize waste reduction, protecting local habitats and communities.
We also focus on sustainable finance by linking sustainability performance to financial instruments. There is an emphasis on attracting sustainability-oriented investors, and we regularly undergo ESG rating evaluations to ensure transparency and accountability.
For the social aspect of ESG, we promote Diversity, Equity, and Inclusion within our workforce. Various global programs have been organized to celebrate DE&I, encouraging employees to cherish and respect their individuality. A range of community engagement tools are employed to actively connect with local communities. Educational initiatives are in place to promote STEM education among girls across the country. Additionally, plastic collection drives are conducted across sites, and Miyawaki forestation methodologies have been actively promoted.
As a founding member of Together for Sustainability, Covestro is committed to ethical sourcing and responsible supply chain management. Our suppliers are expected to comply with a Supplier Code of Conduct that outlines strict environmental and social standards. We also participate in third-party ESG evaluations to maintain transparency and enable our stakeholders to make informed decisions.
Question 8: How has your company evolved its governance practices in line with global ESG standards, and what internal controls do you have in place to ensure compliance?
AS: All production sites of Covestro are ISO 9001 (Quality) certified. Based on business requirements, audits for ISO 14001 (Environment), ISO 45001 (Safety), and ISO 50001 (Energy) are conducted by our auditing partners. Corporate-wide policies and directives are issued by top management to guide our operations.
Responsible Care, a global voluntary initiative by chemical companies, is one such area where Covestro has demonstrated its commitment. This initiative emphasizes achieving excellence in environmental, health, and safety performance, going beyond legislative and regulatory compliance.
Additionally, we uphold corporate commitments aligned with the UN Sustainable Development Goals (SDGs), UN Global Compact Principles (UNGCP), tax transparency, responsible marketing, and lobbying practices.
Six corporate policies have been released by the Board, covering HSEQ, sustainability, value creation, people, innovation, and compliance. Transparent reporting mechanisms are established for both internal and external reporting, and regular third-party verifications are conducted for ESG standards.Top of Form
Question 9: How can industry and government collaborate better to accelerate the transition to sustainable chemicals and fuels? What kind of policy frameworks or incentive structures are still missing to scale sustainable production across the sector?
AS: The collaboration between industry and government is imperative to accelerate the transition to a greener economy. For technology and development support, industry-academia partnerships are essential. There must be clear policies for circular solutions and standards for renewable feedstocks. The industry would benefit significantly from tax incentives for sustainable investments. It can also gain by adopting greener practices from other regions or countries through stronger collaboration.
However, several challenges still need to be addressed. There is no long-term policy framework for the adoption of circularity, and coordinated regional approaches are lacking. There is also no uniform sustainability standard, like an ISO standard, leading industries to comply with various frameworks, adding to operational costs. Moreover, there is a shortage of skilled personnel who can drive sustainability initiatives across the sector. Another important aspect is the cost of sustainable products—the industry is not yet fully prepared for this shift. However, sustainability is increasingly seen as the future of industry, and organizations are gradually gearing up, as sustainability requirements have created a rippling impact across the entire value chain.
This transformation requires both public sector support and private sector investment, along with policies that create clear market signals while allowing flexibility for innovation and adaptation.
