Stepan Company (SCL) — ESG & Values Scores

Environment story

Stepan demonstrates moderate environmental performance with significant legacy contamination liabilities and mixed progress on operational emissions. The company operates multiple Superfund sites (Maywood NJ, D'Imperio NJ, Wilmington MA) requiring ongoing remediation with estimated costs ranging $19.3M–$46.0M. Recent air-emission violations at Millsdale (Elwood, IL) facility and an EPA FIFRA penalty ($1.1M, recovered to $1.0M from third parties) indicate compliance challenges. The company invests in environmental capital projects ($9.8M in 2025) and operates facilities under ISO 9001 and ACC Responsible Care standards. However, Scope 1, 2, and 3 emissions are not disclosed in quantitative terms in the 10-K, and no explicit net-zero target year is stated. The company does not disclose percentage renewable electricity or supply-chain decarbonization initiatives. Environmental spending appears reactive rather than proactive, centered on remediation of historical contamination rather than forward-looking emissions reduction. Greenwashing risk is moderate: while the company frames compliance investments as 'sustainability,' absence of net-zero commitment and undisclosed Scope 3 emissions (particularly from product use in polyol/surfactant applications) suggest incomplete transparency.

Criticisms on file

Maywood, New Jersey Superfund Site (CERCLA): Listed 1993; soil and groundwater contamination. Consent decree entered Feb 2024 requiring remedial actions and cost-sharing. Ongoing uncertainty regarding final ROD for groundwater.
Source: SCL 10-K Item 3 Legal Proceedings; Maywood Site
D'Imperio Property Superfund Site, New Jersey: Named PRP in Oct 1998 lawsuit; ongoing remediation cost-sharing with other PRPs. Estimated liability subject to material change.
Source: SCL 10-K Item 3 Legal Proceedings; D'Imperio Site
Wilmington, Massachusetts Site: Listed NPL 2006; consent decree Sept 2023 requires remedial action. Company contractually obligated to contribute up to 5% of remediation costs (paid $4.3M through Dec 2025). July 2022 notice of possible natural resource damages claim from federal/state trustees; liability recorded in Q1 2024.
Source: SCL 10-K Item 3 Legal Proceedings; Wilmington Site
Millsdale (Elwood, Illinois) Air Violations: EPA Notice of Violation issued March 26, 2024 for alleged operating parameter and air emission requirement violations. Outcome and financial penalties unknown at filing.
Source: SCL 10-K Item 3 Legal Proceedings; Millsdale Site
Millsdale and Fieldsboro (New Jersey) Chemical Contamination: Company voluntarily reported detection of chemical contamination above legal thresholds during 2025; self-remediation required.
Source: SCL 10-K Item 3 Legal Proceedings; Other U.S. Sites
EPA FIFRA Penalty: Pre-filing notice issued March 19, 2025 for alleged violations of Federal Insecticide, Fungicide, Rodenticide Act on biocide products sold via distributor. Penalty of $1.1M assessed and paid July 2, 2025; $1.0M recovered from third parties by end-2025.
Source: SCL 10-K Item 3 Legal Proceedings; Other Matters

Disclosed initiatives

Environmental Capital Investments

Capitalized $9.8M in environmental compliance projects in 2025; $9.8M represents ~8% of total capex. Examples include 1,4-dioxane reduction in ethoxylated surfactants to comply with state regulations.

Supports regulatory compliance but does not constitute decarbonization infrastructure
Responsible Care & ISO Certification

All U.S. facilities conform to American Chemistry Council (ACC) Responsible Care Management System; all sites ISO 9001:2015 certified. Non-U.S. facilities encouraged to adopt country-specific Responsible Care equivalents.

Institutional framework for chemical safety and EHS management; does not address carbon emissions
Site Remediation Programs

Ongoing remediation at Maywood NJ (CERCLA), D'Imperio NJ, and Wilmington MA sites. Company contributed $4.3M to Wilmington remediation through 2025. Environmental accrual of $19.3M recorded (range $19.3M–$46.0M).

Mitigates legacy contamination; reactive rather than preventive

Social story

Stepan demonstrates strong institutional commitment to workforce safety, development, and inclusive practices, supported by robust benefit packages and pay-for-performance incentives. The company employs 2,328 persons (as of Dec 31, 2025) and maintains ISO 9001 certification and ACC Responsible Care compliance, with dedicated safety programs and recognition awards. The 10-K emphasizes leadership development, technical training, language support, and competitive benefits including profit-sharing and ESOP. However, critical gaps in disclosed social metrics limit a full assessment: (1) CEO-to-worker pay ratio is not disclosed, preventing evaluation under the 200:1 threshold; (2) specific diversity percentages for women and underrepresented racial/ethnic groups in technical and executive leadership are absent; (3) union-standing status and collective-bargaining agreements are not addressed; (4) labor turnover rates are not provided; (5) supply-chain human-rights audits, particularly regarding oleochemical/plant-based raw materials sourcing, are not documented. The company's reduction from 2,396 employees (Dec 31, 2024) to 2,328 (Dec 31, 2025) may reflect normal attrition or strategic restructuring, but granular turnover data is unavailable. The company does not disclose whether it participates in industry labor standards certifications or living-wage commitments. Absence of these metrics, while not indicative of misconduct, prevents quantitative scoring on key Social pillars.

Criticisms on file

No material criticisms on file for this pillar.

Disclosed initiatives

Five Core Values & Culture Program

Company articulates five Values (People First, Integrity, Customer Focused, Continuous Improvement, Growth & Sustainability) embedded in operations. Emphasis on empowerment, safety, and responsibility.

Establishes cultural framework for employee engagement; limited quantitative impact disclosure
Safety & Responsible Care Programs

Behavior-based and risk-based safety programs; all facilities ISO 9001:2015 certified; U.S. sites conform to ACC Responsible Care Management System; non-U.S. sites encouraged to adopt equivalents. Annual President's Safety Award recognizes facilities meeting recordable-incident and safety-compliance criteria.

Demonstrates institutional focus on occupational health & safety; specifics on OSHA recordable rates not disclosed
Professional Development & Talent Pipeline

Leadership training, technical training & certifications, language training, educational assistance offered. Emphasis on developing internal talent and advancing employee professional goals.

Supports skill development and retention; no metrics on training hours, completion rates, or promotion demographics provided
Competitive Benefits & Pay-for-Performance

Comprehensive benefit packages, pay-for-performance incentives, profit-sharing, and employee stock ownership plan (ESOP) offered to support work-life balance and attract top talent.

Broad-based compensation framework; CEO-to-worker pay equity and pay-gap by gender/race not disclosed
Employee Feedback & Workplace Culture

Regular survey solicitation on workplace practices and culture; results used at corporate and site levels to define improvement plans. Goal to create environments built on respect, safety, teamwork, and competency.

Institutional listening mechanism; outcomes of surveys and resulting improvements not publicly detailed

Governance story

Stepan demonstrates moderate governance strength with institutional oversight structures, cybersecurity governance, and compliance frameworks. The Audit Committee oversees cybersecurity risk management, receiving quarterly reports from the CIO; the company employs dedicated cybersecurity specialist staff with strong credentials (CIO >25 years' experience; Cybersecurity Senior Manager with 15+ years and multiple certifications). Internal and external auditor reviews of cybersecurity programs are documented. The 10-K does not disclose board independence percentage, share-class structure (single vs. dual-class), specific lobbying expenditures, or active antitrust/consumer-protection proceedings. The company operates under debt covenants requiring minimum interest coverage (3.50:1), maximum net leverage (3.50:1), and minimum net worth ($750M); compliance affirmed as of Dec 31, 2025. The company maintains $150M share repurchase authorization (announced Oct 2021, no expiration), with minimal activity ($2.277M of repurchases in Q4 2025, mostly from employee withholding). No allegations of shareholder litigation, board conflicts of interest, or SEC consent decrees are disclosed. Governance risks appear low; however, lack of transparency on board composition, lobbying activity, and political contributions limits full ESG assessment. No proxy statements or governance disclosures beyond cybersecurity are included in the 10-K excerpt provided.

Criticisms on file

No material criticisms on file for this pillar.

Disclosed initiatives

Cybersecurity Governance & Risk Management

Audit Committee oversees cybersecurity; CIO reports quarterly to Audit Committee on risk management. Full-time cybersecurity specialist team led by Cybersecurity Senior Manager with 15+ years' experience and multiple certifications. CIO has 25+ years' IT/cybersecurity background including ITIL Service Master Certification. Cybersecurity program reviewed by internal and external auditors.

Institutional accountability for digital risk; demonstrates mature governance of cyber threats
Debt Covenants & Financial Controls

Debt agreements require minimum interest coverage ratio 3.50:1, maximum net leverage 3.50:1, and minimum net worth $750M. Company affirms compliance as of Dec 31, 2025. Limits on incurrence of additional debt and restrictions on dividend/share repurchase payouts.

Contractual financial discipline; reduces leverage risk; transparent covenant compliance
Internal Control & Audit Framework

Independent registered public accounting firm (PCAOB ID 34) audited financial statements and internal control over financial reporting. Unqualified opinions issued as of Feb 26, 2026. Critical audit matter identified: European Polymers goodwill impairment testing (fair value $47.0M goodwill allocation).

Third-party validation of financial reporting integrity; goodwill sensitivity analysis disclosed (100 bps discount rate impact, 1.5x multiple sensitivity tested)

These are Missionomics' own editorial scores — directional signals built from disclosed facts under a published method, not certifications or definitive ratings of Stepan Company. Coverage and confidence vary by data point, and figures can lag real-world changes. Read the full Methodology for sourcing, scoring, and correction details — or open Stepan Company in the app for interactive charts and portfolio building.

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