It is important to recognize that climate change is one of the most compelling risks that we are facing today, with impacts on the environment, which in turn, affect businesses, our economies and our livelihoods.
Climate change is inevitable and is going to have potentially serious implications for businesses. Post-COP21, IVL anticipates more environmental, social, political, and economic repercussions. The Company has carried out Climate Change Risk and Opportunity analyses. At the same time, climate change is perceived as an opportunity as changes in regulations will drive the Company towards using more renewable energy. Increasing innovation and production of low-carbon products will lead the Company to become one of the customers’ and consumers’ preferred companies, which also brings financial gain through lowering overall cost of production.
At IVL, we recognize these risks and are committed to taking action. In addition to our Climate Strategy 2025, we developed a Climate Strategy Corporate Standard that guides our global operations in terms of best practices for the climate, including GHG management, with key actions and KPIs in four segments.
Climate-related performance which included GHG emissions reduction, energy reduction, water intensity reduction, is measured against KPIs which started at the top and cascaded to businesses, functions and individuals. Performance is assessed as part of a globally consistent performance management process. The climate-related incentive program covers following levels:
Chief Executive Officer (CEO)
Group Chief Technical Officers
Manufacturing Excellence Council (MEC)
Regional Chief Technical Officers (RCTO)
Head of Environmental Sustainability
Upstream & Downstream Integration
Increase in the use of post-consumer recycled materials
5% energy intensity reduction by 2025* and 15% by 2030*
Renewable and Low Carbon Energy
Low Carbon Products
Water and Wastewater Management
Reduction in the use of virgin raw materials
Renewable electricity consumption: 10% by 2025 and 25% by 2030
10% reduction in combined GHG (Scope 1&2) intensity by 2025* and 30% by 2030*
10% reduction in water intensity by 2025* and 20% by 2030*
Bio-based feedstock : 16% against IVL external feedstock Recycled feedstock (Post-consumer PET bale input): 23% against IVL PET feedstock by 2030
Climate Change Resilience
Shadow Carbon Pricing
Water Risk Analysis
Address climate-related risks
Integrating ESG and carbon pricing into business decisions
Sustainable Supply Chain
Engagement with Stakeholders
Reduce, recycle, reuse
Reduction in the consumption of natural resources
Reduction in PET waste
90% waste diverted from landfill by 2025/2030 Recycling commitment
Post-consumer PET bale input of 0.75 million tons by 2025 and 1.5 million tons by 2030
Post-consumer bottles recycled of 50 billion by 2025 and 100 billion by 2030
*Base year 2020
We are fully committed to finding pathways towards developing effective low-carbon strategies to alleviate the activities that cause climate change. We see the circular economy as an important instrument in combatting climate change and an opportunity to strengthen our recycling business globally. Through innovation, we aim to create products that can be used at their maximum value for as long as possible. We have proactively established our targets as indicated in our Climate Strategy 2025 focusing on four key areas.
Task Force on Climate-related Financial Disclosure (TCFD)
Implementing the TCFD’s Recommendations
IVL has embraced the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD) for its financial and non-financial evaluations. We have also considered the IEA’s STEPS and SDS scenarios for financial analysis by using the internal carbon price as a parameter to quantify monetary impacts if a carbon tax is imposed in OECD and non-OECD countries, and conducted stress-testing analysis to anticipate the impacts on production, EBITDA, and revenue as part of our risk management process.
Indorama Ventures has implemented an internal carbon price (ICP) of USD 20 per tCO2e across all projects with expected environmental benefits (green projects). This policy, implemented alongside a relaxation in the payback period threshold for green projects, was taken to facilitate deeper decarbonization within the company allowing for the implementation of more decarbonization projects.
The company participates in multiple emissions trading schemes (ETS) worldwide, notably the EU ETS. Please refer to our TCFD report for additional details on our ETS and carbon tax payment forecasts.
In addition, as suggested by the TCFD, we applied the AQUEDUCT water risk atlas to forecast changes in future water stress to identify sites that face the most significant risk in future water demand and supply. The results of these studies have been incorporated in our long-term adaptation measures, which allows management to make informed and long-range decisions for IVL’s sustainability.
At IVL, we utilize two methodologies, the Life Cycle Assessment (LCA) and Portfolio Sustainability Assessment (PSA) to evaluate the ESG impact of our products. These methods enable us to achieve sustainable competitiveness by ensuring our products meet customer requirements while leaving a positive impacts. Both approaches are valuable tools for assessing sustainability and together, they provide a more comprehensive understanding of the sustainability impact of our products. In 2022, We achieved 32.78% Global coverage by production volume. The ongoing LCA helps us evaluate the environmental impacts of our products in compliance with ISO 14040/44:2006. We conducted an assessment in order to understand the sensitivity of the price of carbon on our business, and are taking further taking steps to study and implement a policy to embed the internal cost of carbon in our operations including M&A decisions.
Despite the overwhelming scientific consensus and widespread recognition of the threat, the actions required are substantial and require actions from the individual, organizational, national and transnational levels. Therefore, dealing with climate change should be a serious priority and should not be ignored.
We are implementing the 8 principles in the World Economic Forum Climate Governance Initiative. It serves as tools to help elevate the strategic climate debate and drive holistic decision-making that includes careful consideration of the links between climate change and business
IVL was honored to be a part of Innovate4Climate (I4C), an annual global conference on climate finance, investments, and markets hosted by the World Bank Group that attracts leaders focused on transforming dialogue into action on climate change by linking climate innovations with investment opportunities. The three-day event, hosted by the World Bank Group and the governments of Spain and Germany, combined high-level plenaries, workshops, and a virtual marketplace to exchange knowledge and demonstrate know-how in delivering low-carbon resilient solutions.
To support our corporate long-term GHG emissions targets and to improve both our environmental and economic operations, we have undertaken several concurrent GHG intiatives. Expanding and improving recycling are important ways to help address climate change.
2025 Global Commitment:
The PET resin produced by IVL is 100% recyclable. In 2019, we made a global commitment to the Ellen MacArthur Foundation. We invest USD 1.5 billion to recycle 50 billion bottles per year or 750,000 Tons of post-consumer PET materials as feedstock into our polyester production per year
Manufacturing goods from recycled materials typically requires less energy than producing goods from virgin materials. Our most recent collaboration with Unilever and Ioniqa to recycle colored PET bottles into virgin PET is an innovative and important example of our continuous efforts. Further details of this initiative are provided in the Innovation Management section of this report, while more details on our recycling operations are given in other chapters.
We have been acknowledged through important achievements in addition to being recognized by external organizations such as S&P Global CSA and CDP. Looking ahead, we remain committed to achieving our targets and will continuously raise the bar to create a sustainable strategy that leads to greater value for our stakeholders, bringing us closer to achieving our vision of making great products for society.
To make further progress towards environmental stewardship, Indorama Venture Public Company Limited (IVL) recently received assessment from CDP – the global environmental disclosure system – helping measure the risks and opportunities on climate change. The company has received a CDP score of B which is a Management band. This is higher than the Asia regional average of B- , and higher than the Global average of B-. The CDP Score Report will guide us towards our goal of better climate governance while boosting the transition to clean energy.