Responsible-Investor reported yesterday that credit ratings for chemical companies in the US could be affected if the EPA invokes stricter regulation on GHG emissions. The World Resources Institute, Standard & Poor’s and APG issued a report analyzing the potential impacts on the chemical sector’s credit ratings on a number of EPA regulatory scenarios.

Petrochemicals, other basic organic chemicals and nitrogenous fertilizer producers are likely to face stronger regulation due to high absolute emissions and their potential to significantly reduce them. Companies with older, less efficient facilities were likely to face credit re-rating as they spend more capital to achieve best practice standards.

The report looked at two types of federal climate policy scenarios: cap-and-trade and EPA regulation of GHG emissions for 13 energy-intensive chemical subsectors. It’s believed that stricter regulation of GHG emissions is more likely to occur through the EPA because of political resistance to broader government policy.

To read the full article please click here.

How do you think this will affect the sustainability initiatives and strategy of these chemical companies? If they don’t already have strategies in place, do you think this regulation will force them to do so? Discuss!