Composites Industry ESG Thematic Report, 2023

Environment Social and Governance (ESG) in the Composites Industry

The composites industry is one of the markets that is currently witnessing significant demand as the products have high applicability across various ranging from automotive, aeronautical to wind energy industries. There are a wide range of applications in terms of sustainability, which impact this market in the terms of ESG. However, environmental degradation is one of the key issues in the area of environment of ESG that is prevalent in the industry.

The key leaders of the composites market are however trying to scale down the negative impacts caused by the aforementioned issues by taking up initiatives, to sustain the market. The United Nations’ Sustainable Development Goals (UN SDGs) is a comprehensive framework that helps companies in this market obtain a perspective on the impact of their products and operations on ESG parameters.

ESG Trends

The composites industry has a wide range of products such as carbon fiber, glass fiber, silicon carbide fiber and hybrid fibers, which are used in automotive and aeronautical industries due their lightweight and durable nature. There are a wide range of sustainable applications of composite materials, in infrastructure and automotive. 

According to a report, the production of carbon fiber is 14 times more intense than that of steel in terms of power consumption. In response to the energy consumption, major companies of the industry have pledged to suspend the usage of thermal power and to switch over to purchase of renewable hydrogen energy and net zero target by 2030, by purchasing biomass powered steam, aligning themselves towards United Nations Sustainable Development Goals of affordable and clean energy (SDG7).

Further the sourcing of certain raw material, acrylonitrile to produce the carbon fiber, a dominant product in the industry, is sourced from crude oil. The acrylonitrile is polymerized and then made into carbon fiber, by carburizing and oxidizing. In the process of creating a carbon fiber, a variety of gasses such as water vapor, carbon monoxide and ammonia are used to treat the carbon fiber sheet. Further for the process of coating, nylon and other polymers are used.

The polymers and nylons are extracted from crude oil. Sourcing of the polymers and nylons from crude oil strains the environment, since the extraction process leaves intense amounts of carbon footprint, contributing to the increase of global warming and climate change.

To reduce the environmental impact, key companies of the market have pledged to adopt, recycle and reuse the composite materials such as carbon fiber and glass fiber, which helps in reducing the emissions from extraction of the raw materials and manufacturing process. The recycle approach to manage the waste produced in the market also considered as an efficient approach than land filling, which causes soil and water pollution, since the carbon fiber contains plastic, which is non-biodegradable, thereby promoting the UNSDG goal of sustainable cities and communities (SDG11) and climate action (SDG13).

Growth of the Composite Market

The composites market was valued globally at USD 86.4 billion as of 2020 and is forecasted to expand with a CAGR (compound annual growth rate) of 6.6% from 2021 to 2028. The composite materials such as carbon fiber and glass fiber are projected as more durable material with a good life span and sustainable than steel in terms of environmental aspects, although the production of the composite materials involves intense amounts of carbon footprint. The integration of recycling practices amongst the key companies of the market is reported to decrease the carbon footprint from sourcing, production process and waste, making the products eco-friendly.

Key Companies in this theme

    • Teijin Ltd

    • Toray Industries, Inc.

    • Owens Corning

    • PPG Industries, Inc.

    • Huntsman Corporation LLC

Scope of the Composite Industry ESG Thematic Report

    • Macro-economic and ESG-variable analysis of the industry, including regulatory, policy, and innovation landscape

    • Key insights on infrastructure developments and ESG issues affecting the theme

    • Identify key initiatives and challenges within the industry

    • Identify ESG leaders within the industry

    • Understand key initiatives and the impact of companies within the sector to fuel an informed decision-making process

    • Analysis of industry activities based on multi-media sources, including significant controversies and market sentiment

Key Aspects of the Composite Industry ESG Thematic Report

    • Offers a global perspective of composite industry and the policies and measures taken by the players, for overcoming the challenges faced in terms of Environment, Social and Governance.

    • Key insights into the sustainability practices of major players in the market.