Paints And Coatings Industry ESG Thematic Report, 2023

Environment Social and Governance (ESG) in Paints And Coatings Industry

The current trend of investments is impacted by the introduction of policies in areas of Environment, Social and Governance and the intense implementation of such policies.

The paints and coatings industry is one of the highly demanded markets, the products have high applicability across various ranging from automotive to infrastructure markets. The sourcing of the raw materials, emissions from the manufacturing processes, energy consumption, waste water management and global value chain and usage of volatile organic compounds in the products are some of the challenges to the industry in the sphere of environment and social aspects of ESG.

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. The key leaders of the specialty market are however trying to scale down the negative impacts caused by the aforementioned issues by taking up initiatives.

ESG Trends

There are a wide range of challenges in the industry in terms of ESG. The usage of Volatile organic compounds is one of the challenges to the market, since the products contain compounds such as formaldehyde, methylene chloride, tetrachloroethylene, benzene, ethylene glycol and toluene.

It has been reported that exposure to formaldehyde can cause eye and throat irritation and exposure for longer time causes shortness of breath and negative changes in lung function as does the other VOC’s. Further the usage of ingredients such as pigments in the paints, which give the glossy appearance also impacts the environment in negative manner by creating a synthetic ozone layer in the presence of sunlight, contributing to the global warming, which also negatively impact the human health, challenging the market in terms of environment and social aspects of ESG, in contrast to the UNSDGs of good health and wellbeing (SDG3) and climate action (SDG13).

Some of the products of the paints and coatings industry, such as acrylic paints are polymer based products, that are extracted from the crude oil. The polymers for the acrylic paints are sourced from different kinds of sources such as coal, natural gas, salts and other toxic chemicals such as benzene and vinyl hydrochloride. The sourcing of fossil fuel strains the environment, since the extraction process leaves intense amounts of carbon footprint, contributing to the increase of global warming and climate change.

Further the waste water from the manufacturing of the paint contains toxins such as VOCs and pigments, when released into the environment through waste waters, are reported to cause damage. It has been observed that the minerals such as zinc oxide and titanium dioxide are reported to cause eutrophication, since the minerals gets excessively deposited into waters, making the water’s a dead zone for the animals, Contrary to the UN SDG goals of life on land (SDG15).

In response to the aforementioned situations, leading companies of the paint and coating market have introduced policies and strategies to negate the adverse impacts caused by the chemical compounds. Some of the key companies of the market have introduced air purifying technology, which reduces the VOC’s and thereby improves the health of consumers and creates a positive impact on the environment. Leading companies of the market have introduced a circular economy to manage the waste from the production, reducing the dependence on raw materials and mitigating waste, promoting the UN SDG goal of Industry, Infrastructure and Innovation (SDG9).

Growth of the Paints And Coatings Market

The paints and coating market was valued at USD 146.17 billion as of 2019 and is forecasted to expand with a CAGR (compound annual growth rate) of 4.3% from 2020 to 2027. The usage of bio based chemical ingredients in the production of paints and the innovation in technology, which created a low usage of VOC’s and the circular economy model to manage the waste are some of the rising trends in the paints and coatings market in terms of ESG.

Key Companies in this theme

    • The Sherwin Williams Company

    • PPG Industries, Inc.

    • Akzo Nobel N.V.

    • Nippon Paint Holdings Co.

    • BASF SE

Scope of the Paints And Coatings 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 Paints And Coatings Industry ESG Thematic Report

    • Offers a global perspective of the paints and coatings 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.