Climate change is one of the defining challenges of the 21st century and presents both financial risks and opportunities to companies.

Greenhouse gas emissions (GHG) stemming from human activities are driving a rise in mean temperatures. This is affecting human health and well-being as well as the natural environment, and poses significant risks to the global economy. Companies’ economic prospects are affected by technological developments, regulatory changes and the physical consequences of a changing climate.

As an international manufacturer and supplier of petrochemicals, polymers and building products, Westlake’s operations and value chain contribute to significant GHG emissions. As such, it is exposed to financial risks and opportunities as the world transitions to a low-carbon economy. In its 2021 ESG report, the company states that failure to avoid and/or mitigate negative impacts that can contribute to climate change “could have material reputational and regulatory consequences for our business as well as impact our social license to operate” 1.

The company has set a target to reduce Scope 1 and Scope 2 CO2 equivalent emissions per ton of production by 20% by 2030 from a 2016 baseline. Between 2016 and 2021, the company recorded a decrease in total Scope 1 and Scope 2 emissions intensity by 14.75%. Proponents recognise the existing efforts and achievements but believe strengthened 2030 targets and the establishment of a long-term target is needed to provide investors with a better understanding of how the company will align its business model with pathways to net zero emissions.