- More than 80% of chemical players are placing as much importance on ESG and sustainability as on revenue growth
- 56% of companies have accelerated digitization
- Major barriers include lack of technical infrastructure and skills gap
Eighty-two percent of responding chemicals companies are expecting to make savings through the ongoing sustainability push across the sector, according to the latest EY DigiChem survey of sector leaders. Digital solutions are expected to be at the forefront of this effort with 70% of respondents seeing medium or strong potential to use technology and digitization for a better and faster implementation of sustainability goals.
Dr. Frank Jenner, EY Global Chemicals & Advanced Materials Industry Leader says:
“Sustainability is at the forefront of thinking across many sectors, and chemicals is no different. We know from the EY CEO Outlook earlier this year that 80% of chemical leaders are placing as much importance on ESG and sustainability as on revenue growth. Digitization is going to be central to this sustainability effort, helping businesses to meet their ESG targets, while continuing to meet the needs of customers who are more sustainability conscious than ever.”
The survey also showed that 56% of responding companies have been forced to accelerate digitization due to the COVID-19 pandemic; and geopolitical challenges have led to supply chain constraints and inflation in material and labor costs. Forty percent of chemical players are reporting that digitalization had a disruptive or revolutionary impact in the past three years — and this is expected to increase, to 65% in the next three year period from 2022.
However, for that to become a reality there are challenges the sector must overcome. The biggest challenge respondents outlined is access to a robust technical infrastructure (40%), followed by investment requirements (38%) and the need to develop secure systems (38%).
While the skills gap remained a concern, with 37% of chemical player respondents facing a lack of qualified personnel for digitalization, the proportion of companies that are worried has dropped from 40% in 2020. Fears about skills are a particular issue in Europe where 50% of respondents reported a lack of skilled workers.
In North America, high investment requirements are seen as the biggest challenge on the path to greater digitization (46%) while in Asia-Pacific security concerns are the main issue (41%) and Middle East and Africa worries about technical infrastructure are most pressing (49%).
Dr. Jenner says: “The pandemic really accelerated the need for digitization across the sector and also opened people’s eyes to just how disruptive these new technologies are going to be in the short-to-medium term. We now need to work to help the sector meet the challenges that the pace of change has presented. While concern around skills has dropped since 2020, it remains an issue, with more than a third of respondents identifying it as one of the three biggest barriers to digitization. We’re also seeing lots of worry around technical infrastructure and the costs of investing in order to really get the most out of digitization.”
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