ESG assessment methodology for emerging technologies: plasma versus conventional technology for ammonia production.

Abstract

Environmental, social and governance (ESG) criteria demand that enterprises should not be assessed solely on their financial performance, but also on their environmental, social, and governance performance. This numerical assessment of ESG criteria enables them to be evaluated with the consideration of other financial issues of enterprises' performance and thereby guides financial investments into environmentally and socially responsible firms. ESG, however, solidifies the continuance of conventional technologies but can potentially disadvantage emerging technologies. This study is the first to forecast the ESG potential of emerging chemical technologies. The Morgan Stanley Capital International (MSCI) rating system is applied to one of the top 3 global chemical processes. Ammonia (NH₃) is produced via the Haber-Bosch (HB) process, which needs a huge fossil fuel input and high energy consumption, leading to a significant contribution to carbon dioxide (CO₂) emissions. In contrast, the ESG assessment rates emerging plasma technology and its spearhead companies that lead innovation and development in this field, which provide the benefits of being a clean, sustainable alternative for green NH₃ production. Five different plasma-technology companies are considered, with the technology readiness level (TRL) ranging from 3 to 9. These are compared to five different conventional HB companies. We examine the final ESG result of the plasma technology companies, exploring their environmental advances and social viability. In this study, five different themes were selected, including eleven issues, to measure the plasma-technology company's management related to ESG risks and opportunities.