Complexities of ESG and Sustainability Reporting in Chemicals and Petrochemicals
Sustainability reporting has become a baseline expectation for industrial companies across Europe and beyond. For organisations in the chemicals and petrochemicals sector, it means managing one of the most multi-layered ESG footprints in any industry.
The chemicals sector accounts for 1.3 gigatonnes of direct CO₂ emissions annually, equivalent to 3.6% of global CO₂ emissions. That number alone signals the scale of data to be reported. But focusing only on the headline carbon figure risks missing most of what makes chemicals and petrochemicals ESG reporting genuinely difficult.
The Emissions Picture Is Unusually Wide
Unlike sectors where emissions come primarily from energy consumption, chemicals and petrochemicals companies deal with emissions from multiple distinct sources simultaneously. Combustion from energy use is only one part of the picture. Process emissions, released as a direct result of chemical reactions, sit alongside flaring and fugitive emissions from equipment leaks, venting, and storage.
What makes this particularly significant is that the chemical sector is the largest industrial energy consumer, yet only the third largest industry subsector in terms of direct CO₂ emissions. This is because around half of the sector's energy input is consumed as feedstock, fuel used as a raw material rather than as a source of energy. This distinction matters enormously for ESG reporting: energy consumption data alone will not give an accurate picture of the sector's emissions profile.
Each of these emission sources requires a different measurement methodology. For ESG teams trying to compile consistent, auditable Scope 1 data across multiple production sites, this complexity quickly becomes one of the most resource-intensive parts of the reporting process.
Scope 3 Is Where Most of the Footprint Lives
For many chemicals and petrochemicals organisations, the emissions that sit outside their direct operational control are just as significant – if not more so – than those they generate themselves.
Feedstock procurement, contract manufacturing, product distribution, and end-of-life disposal all contribute to a Scope 3 footprint that spans multiple tiers of suppliers and customers. Ammonia production alone accounts for 45% of emissions from primary chemical production, followed by methanol at 28% and high-value chemicals at 27%, and these products move through long, international value chains before reaching their end use.
Gathering reliable emissions data from across that value chain remains one of the most persistent challenges in the industry. Suppliers operate under different standards, use different calculation methodologies, and report with varying degrees of completeness. Without a structured approach to collecting and validating this data, Scope 3 reporting becomes an exercise in estimation rather than disclosure.
Data Fragmentation Is the Underlying Problem
For multi-site chemicals and petrochemicals groups, ESG data does not sit in a single system or team. It is distributed across production facilities, business units, logistics partners, and supplier networks, often operating across different countries, systems, and reporting standards.
This creates a fragmented data environment where information is difficult to collect, compare, and validate. Even when data is available, inconsistencies in format, methodology, and measurement approach across sites make it difficult to translate into reliable group-level reporting outputs.
In practice, much of this is still managed through manual processes, spreadsheets, and disconnected tools. This not only slows down reporting cycles but also increases the risk of errors, gaps, and data that cannot withstand regulatory or auditor scrutiny.
Building a Foundation That Can Handle the Complexity
What the chemicals and petrochemicals sector is a more structured way of governing the data it already generates.
This means establishing a centralised environment where emissions inputs from different sources and sites can be brought together into a consistent, comparable format. It means building supplier data collection workflows that are structured enough to produce verifiable Scope 3 figures. And it means creating an audit-ready reporting layer that can serve multiple disclosure frameworks simultaneously, without requiring teams to reconcile the same data multiple times across disconnected systems.
As regulatory expectations continue to tighten and stakeholder focus on sustainability in the chemicals sector intensifies, the organisations best positioned to respond will be those that have already invested in getting their data foundation right.
Terra Reporting helps chemicals and petrochemicals organisations connect ESG data, streamline reporting processes, and build a scalable, audit-ready foundation for end-to-end sustainability visibility.
