Chemicals giants scramble to Climate-Proof as weather risks mount

Three years ago, the River Rhine — the busiest waterway in Europe — shrivelled up amidst a period of severe drought. The low water level snarled industrial supply chains, crippling all kinds of businesses.

Chemicals giant BASF was one company at risk. Its four-square mile integrated production facility at Ludwigshafen sits right on the banks of the river, serving as a key transit hub for the firm’s myriad products. However, the company was prepared. BASF had installed a low water early warning system to alert it to incoming trouble and had reshuffled its logistics so freight could travel by rail or specially adapted boat as needed. In October 2022, it even unveiled a new kind of tanker, capable of navigating the Rhine at a water depth of just 1.6 meters. BASF’s actions made it the poster child for climate adaptation across the chemicals sector.

Many of the company’s peers recognize the growing climate threat to their operations and supply chains, too — and are seeking ways to climate-proof accordingly. This is illustrated in data gathered by CDP, the independent environmental disclosure system. In 2023, out of 917 reporting chemicals companies 281 (31%) had identified physical climate risks they considered substantive in their value chains, while 224 (24%) said their business strategy was informed by a risk assessment process where at least one such risk was identified.

For this month’s Adaptation10, Climate Proof and DSR & Partners reached out to a number of chemicals industry professionals to learn more about how this important sector is adapting to climate risks — and what opportunities they could take advantage of in a warmer and wilder world.

Analysis First

The first step to mastering a problem is to understand it. When it comes to climate shocks, interviewees made clear that there’s still much work to be done.

“We look already very carefully at the risks related to climate change for our plants,” says Nicole Kambeck, Head of Sustainability at Mitsubishi Chemical Europe. “But I think there's a lot of information still missing, and we need to create awareness,” she adds. Mitsubishi Chemical Group has 42 locations in Europe, and 489 worldwide, creating everything from food-safe plastics to engineering-grade thermoplastics and composites. The company disclosed in its latest sustainability report that extreme weather events — like floods in Asia — could force certain factories to shutter and lead to a loss of sales and assets.

Climate threats to the sprawling industrial sites where chemicals are produced and refined are top of mind. “One of the big risks is definitely related to the infrastructure,” says Stefan Koch, Head of Materials and Infrastructure Industry Communities at the World Economic Forum and formerly Head of Climate Strategy and Strategic Projects at German chemicals firm Covestro. “We're talking about large assets in the chemical space - and you have the very classic infrastructure resilient questions to answer, which is how do you handle extreme weather events: flooding, hurricanes, heat waves?”

He explains that some chemicals facilities are currently exploring ways to be independent from the electricity grid — for example by installing onsite backup power sources — so that they can continue operating amidst these kinds of extreme conditions. For her part, Kambeck says getting Mitsubishi's plants ready to address climate disasters is a new challenge, but one well worth the effort: “The earlier we start to think about and put in place adaptation measures, the less cost issues we will face down the line,” she says.

But it’s not only direct climate impacts to their infrastructure that could cause chemicals firms problems. The effects of extreme weather on surrounding areas can also unleash chaos.

Koch shares an anecdote from a chemical company when heavy rains caused flooding at a US facility. What proved most disruptive was the effect of the raging waters on the facility’s access road — which connected it to the wider world. “Even days after they managed to get the water away from the site and had proper production ready, they couldn’t get the materials in which they needed to process into final products,” he says. “We're talking about millions of dollars lost due to the fact that they couldn’t deliver on time as promised to their customers.”

His story underlines the importance of taking a wide view of climate risk, beyond the immediate confines of specific assets.

“The earlier we start to think about and put in place adaptation measures, the less cost issues we will face down the line,” Nicole Kambeck

Too much water is one threat to chemicals companies. Too little water is another. At Evonik, a specialty chemicals provider also headquartered in Germany, both flooding and water scarcity have been identified as potential issues for the company — if not for some time.

“By 2030 we don’t see a significant risk from water availability and quality, but it's increasing,” says Ralf Duessel, Head of Sustainability at Evonik. “We are working on our sites to reduce water consumption and thinking about the water quality, and what we can do if temperatures go up, because then we need much more.” In 2023, the company ran a “full water catchment area assessment”, and used the WWF Water Risk Filter, a free and open source tool, to gauge their water risks from today to 2030 and 2050.

Then there’s extreme heat and temperature variability threats. Blistering temperatures can dry up rivers and reservoirs, exacerbating water scarcity challenges. But they can also play havoc with the myriad complex materials and industrial processes that chemicals companies use to make their products. For example, gasification and pyrolysis are two ways to create and refine chemicals that rely on high temperature and high pressure processes. Extreme heat, and extreme temperature volatility, can frustrate these processes. “Companies are looking at the need for climate-adapted technologies for lower temperature solutions and lower pressure solutions so they are lesssensitive to temperature changes going forward,” says Koch.

 Supply Chain Challenges

Making industrial-grade chemicals is tough enough. A whole other set of issues arise when it comes to moving them around. As BASF found out on the banks of the Rhine, it pays to be prepared for climate-induced transit troubles.

What makes transporting chemicals more complicated than shipping other types of products are restrictions on ways they can moved from place to place. For example, in many jurisdictions chlorine — used for disinfecting water and whitening materials, among other things — is classified as a hazardous material and must be moved using specific modes of transport. If a climate shock disrupts these specific modes, chemicals producers and distributors may find themselves short of alternative options.

Smart distributors are making sure they have plenty of redundancies built into their storage and transport networks to deal with such events. Brenntag is a leading chemicals and ingredients distribution company, which ships some 10,000 products to 185,000 customers, like pharmacies and water treatment centers. Andreas Kicherer, the company’s Vice President for Sustainability, says its vast network of storage locations makes it highly adaptable when problems arise. “If, for example, a warehouse’s operation is affected by extreme weather conditions, we are often able to use other supply chains due to our large site network. And the same thing if there are supply chain disruptions. So, for example, if a major transportation route is blocked, our large supplier base and diversified supply chains allows us very often to find another route and another supplier, because we are cooperating with many,” he says.

But chemicals companies don’t only have to worry about shipping their finished products. They also have to keep track of their upstream suppliers to ensure they have the inputs they need, when they need them. Koch explains: “Think about the dependency of the chemical industry on just-intime production. That requires you to ship material from A to B within a very short period of time, and if you have a higher probability of extreme weather events, then this short supply chain time is heavily impacted.” Localization and diversification are two ways in which chemicals companies are responding to growing supply chain risks, he adds.

“Companies are looking at the need for climate-adapted technologies for lower temperature solutions and lower pressure solutions,” Stefan Koch 

Still, there are a lot of unknowns in their value chains that chemicals companies are yet to get to grips with. Kambeck at Mitsubishi says supply chain risk management is still a blindspot at her company: “I would say that we have a total lack of knowledge about potential climate risks from our raw material suppliers. This risk needs to be better understood in the future,” she says.

The CDP data shows that 406 chemicals companies — less than half of the entire sample — are engaging their suppliers on climate-related issues.

Opportunity Knocks

Clearly, physical climate risks are an immediate and future risk to chemicals companies. But these organizations also have a starring role to play in climate mitigation and adaptation — one that brings with it new opportunities.

For example, on the energy transition front, ethylene vinyl acetate is an essential coating for solar cells, and is only going to grow in demand as production ramps up to meet countries’ netzero targets.

When it comes to adaptation, polyvinyl chloride (PVC) is likely to see growing demand in a drier and wetter world as it is used to make rigid pipes for transporting water. Production of silica, an additive for car tires, may also increase as hotter conditions cause unenhanced tires to deteriorate faster. Companies that produce ‘cool’ coatings and paint could also catch the adaptation wave. Such chemical layers are already being applied to vehicles and school yards to help lower ambient and surface temperatures. It’s not hard to see take-up of these coatings take off as heat extremes become more common. 

Duessel at Evonik provides another example on hydrogen peroxide (H2O2):

 “You need to take care of your treatment of industrial wastewater as temperatures rise. H2O2 is a perfect treatment because it breaks up molecules without any harmful leftovers. It's just water and oxygen.”

Evonik has also developed a substance that increases the effectiveness of a type of pesticide that is commonly applied by drones. This adjuvant reduces the drift of the active ingredients, thereby lowering the amount of water needed to apply the pesticide. Evonik says 10 to 40 liters of water are enough to apply the same amount of pesticide per hectare using the adjuvant, whereas 200 to 1,000 liters of water would be needed for conventional sprays.

However, according to Koch few chemicals companies are actively working on adaptation as a business theme today. The focus is instead on providing in-demand chemicals in more climate- and environmentally-friendly ways. “The way they measure product innovation — it’s about bringing the carbon footprint down. They’re sticking with existing solutions and trying to improve the mitigation potential for their downstream customers,” he says.

There are exceptions, though. Kambeck says Mitsubishi is specialized in a water filter technology called Cleansui, which could see heightened demand as climate change worsens. “We can expect that we will have more water contamination because of climate disasters. This is at least one solution,” she says. 

She adds that the industry should seek to strengthen cross-company collaborations in order to flesh out adaptation opportunities. “I believe it's very important to establish working groups on climate adaptation, so that we don't discuss only climate mitigation, but really start to work on activities with regards to adaptation to create greater awareness,” she says.

Doing so may even prove essential to the survival of certain companies, she adds. “It’s clear that in the future, climate adaptation will become absolutely crucial for keeping the license to operate of our company.”

Daniel & Louie

Climate Proof and DSR & Partners highlight the following ten companies offering adaptation solutions relevant to the chemicals sector. While not all are currently targeting chemical industry clients, we believe their innovations can help companies strengthen climate resilience across operations and supply chains. Each company is assigned a Theme, Sector, and Dimension aligned with the Tailwind Taxonomy. 

 FloodWaive specializes in AI-driven flood forecasting. Their technology combines hydrodynamic models with artificial intelligence to provide accurate and real-time flood predictions. This helps cities, businesses, and emergency services prepare for and respond to heavy rainfall and flooding. The infusion of AI results in much faster flood predictions than can be achieved using conventional techniques, without sacrificing precision. Floodwaive’s solutions are designed for both urban and rural areas, offering insights that can enhance infrastructure planning and disaster response.

Founded in 2021, Correntics AG is making a name for itself as a provider of data-driven climate risk analytics for global supply chains,. The company offers a Software-as-a-Service (SaaS) platform that produces climate risk assessments, real-time hazard data, and sustainability reports that help organizations manage and disclose climate-related risks. Their solutions are targeted at several industries, including chemicals, where enhancing climate resilience is critical. For chemicals sector clients, Correntics assesses physical risks to facilities, analyzes climate impacts on production, and identifies supply chain vulnerabilities.

Absolute Water Technologies is a self-proclaimed “onestop-shop” for ultrapure water treatment systems. The company offers a comprehensive range of products and services for industrial and commercial clients, including reverse osmosis systems, laboratory water systems, and ultraviolet (UV) purification equipment. These solutions are designed to meet the stringent water quality requirements of various industries, including the chemical sector. By providing high-purity water, their systems help ensure chemical product consistency and compliance with industry standards. Additionally, they offer installation, technical support, and preventative maintenance services to ensure optimal system performance.

Aqua Membranes develops advanced reverse osmosis (RO) membranes using their patented Printed Spacer Technology. Unlike traditional mesh spacers, they print feed spacers directly onto the membrane, improving water flow and reducing energy use by up to 30%. In the chemistry sector, this innovation supports waterintensive processes, helping companies improve efficiency, reduce fouling, and enhance water recycling. Their technology is particularly valuable for zero liquid discharge (ZLD) and sustainable water management.

Resilinc provides data and insights on suppliers and supply chains, offering risk management and mapping solutions to large companies in multiple industries. The company boasts AI-based monitoring capabilities, predictive analytics that allow for early warning of supplier disruptions, and multi-tier mapping to enhance supply chain resiliency. These solutions help companies anticipate and mitigate disruptions, ensuring continuity and compliance across various industries. Resilinc claims to have mapped 800,000 suppliers globally across 20 industries, and to monitor supply chain disruptions in more than 200 countries.

(Sign up here to unlock) is a global provider of advanced water and wastewater treatment solutions. Spun out of the Massachusetts Institute of Technology, the company offers proprietary tech and chemicals aimed at reducing, reclaiming, and renewing water usage in industries, addressing global water scarcity. Serving industries from semiconductors to pharmaceuticals, xxx solutions help clients minimize environmental impact while enhancing operational efficiency.

(Sign up here to unlock) is a supply chain risk analytics company headquartered that provides predictive insights and risk data to various industries. Their platform enables users to make a digital twin of their supply chains, allowing for highly granular risk assessments and early warning of disruptive events. Its weather intelligence and analytics suite offers insights into potential climate shocks and quantification of long-term climate and water risks to supplier networks.

(Sign up here to unlock) is a leader in Distributed Fiber Optic Sensing (DFOS) technology. A subsidiary of Luna Innovations, the company specializes in turning standard fiber optic cables into real-time monitoring networks. Their technology detects acoustic signals, temperature, pressure, and structural changes, and translates this into actionable data. This eases the management of physical assets by enabling continuous, long-distance monitoring without the need for additional sensors. xxx solutions are in demand for pipeline security, transportation, and utilities. Their innovations help companies improve operational awareness, reduce risks, and respond quickly to potential threats or failures.

(Sign up here to unlock) is headquartered in New Orleans, Louisiana. Established in 1999, the company specializes in flood protection solutions. Their flagship product, the Tiger Dam system, consists of water-filled barriers that safeguard properties from rising waters. These reusable barriers can be quickly deployed, connected to form extended protective walls, and stacked to various heights as needed. Each 50-foot-long dam, when filled, replaces approximately 500 sandbags, providing a cost-effective and environmentally friendly alternative. xxx’s innovative solutions help communities and businesses prepare for and manage flood events effectively.

(Sign up here to unlock) is an innovator in thermoacoustic technology. The company specializes in converting waste heat into cooling without the use of electricity or harmful refrigerants. Their flagship product, the THEAC-25, harnesses heat in the range of 160°C/320°F to provide independent cooling for various applications, including buildings, food storage, maritime vessels, and cold chains, especially in off-grid or remote locations. By utilizing waste heat recovery, xxx aims to reduce dependence on fossil fuels and support environmentally sustainable cooling solutions.

Illustrative Story: Defying the Storm – The Rescue of a Chemical Park

Chapter 1: Deceptive Security

The RheinWest Chemical Park, one of the largest industrial facilities in Europe, was buzzing with activity. Production lines ran around the clock, raw materials arrived by the ton to be transformed into complex chemicals and composites, and profits rose at a steady pace.

However, behind this bright facade, problems were mounting. RheinWest was experiencing ever-more frequent extreme weather events, nearby freshwater sources were running perilously low, and aging infrastructure seemed on the brink of collapse.

A young engineer Laura Schmitt, responsible for sustainability, was one of the few reading the danger signs – and planning for the future. She had a bold vision: the radical transformation of RheinWest into a climate-resilient powerhouse. But management, particularly stick-in-the-mud plant manager Dr. Klaus Hagen, did not agree with her. “We've survived for decades — why should we spend so much and experience such disruption now?” was his stock response.

Chapter 2: Warnings Go Unheard

Laura brought in the experts: xxx and Resilinc analyzed the park’s suppliers and supply chains, and provided data showing their vulnerability to climate shocks like storms and drought. Risk modeling by FloodWaive showed growing flood exposure. Yet to Laura’s dismay, the reports were left on Hagen’s desk to gather dust – untouched and unread.

She would not be downhearted. With the support of xxx and Aqua Membranes, Laura developed plans for improved water treatment at the park. Again, Hagen stalled: “These systems seem expensive – and our water consumption has never been a problem before.” Experts from xxx visited, offering a unique way to convert waste heat produced by the park’s many facilities into an efficient cooling solution. This had the potential to drastically increase energy efficiency — but again, management said “No”.

Chapter 3: The Catastrophe

One night, a mighty storm roared over RheinWest. Torrential rain caused the nearby river to burst its banks, and within hours the chemical park’s rudimentary defenses were overwhelmed, leading to flooding throughout the complex. The angry waters breached containment units, creating a toxic swill that threatened the surrounding environment. Production in the park was brought to a standstill, while flood damage to the surrounding roads and waterways made the transport of finished chemical products to end customers impossible.

It could have been so different. Laura had talked to xxx just weeks before the storm. Their flexible flood defenses could have been deployed in minutes around sensitive areas, preventing their inundation. Correntics AG had offered to identify the park’s most pressing climate risks and had even offered a menu of solutions. Absolute Water Technologies was a phone call away – and could have provided water treatment tech to deal with the toxic floodwaters.

Chapter 4: The New Beginning

In the wake of the catastrophe, Hagen had to admit that Laura had been right all along. Given new powers, Laura reformed the park as she’d imagined. It now embraced the innovative climate adaptation technologies and processes it had turned away from before. The park’s water resources were optimized with technologies from Gradiant and Aqua Membranes, Everstream Analytics and Resilinc created a comprehensive early warning risk system for future supply chain risks, while SoundEnergy provided energy-efficient cooling. xxx was installed park-wide to allow for real-time monitoring of changes in the infrastructure’s resilience.

Finally, the RheinWest Chemical Park was climate-adapted. If only it hadn’t taken them a catastrophe to change.

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