Last reviewed 20 November 2023
Institutional investors are urging major chemical companies to stop producing PFAS chemicals that they say expose manufacturers to “deep liability and insurance risks, reminiscent of those historically linked to asbestos”.
The Investor Initiative on Hazardous Chemicals (IIHC), which represents over $10 trillion in assets or advice, has written to the heads of the 50 largest stock-listed chemical companies, calling for the phasing out of PFAS production, arguing that the risks associated with PFAS “could materially adversely harm the long-term value of companies involved in their manufacture and sale”, according to a press release from ChemSec, which coordinates IIHC.
PFAS chemicals, short for per and polyfluorinated alkyl substances, are a group of around 5000 man-made chemicals, often referred to as “forever chemicals” because of their persistence in the environment.
PFAS have been used in production since the 1950s and are present in a wide range of consumer products, from skin creams and cosmetics, non-stick frying pans and food packaging to child car seats, firefighting foam and turnout gear.
They are also bioaccumulative in people, animals and plants, and can be toxic. According to the US Environment Protection Agency (EPA), exposure to certain levels of PFAS chemicals has been linked to a number of illnesses, including increased risk of some cancers, including prostate, kidney, and testicular cancers, decreased fertility and increased cholesterol levels and/or risk of obesity.
A recent Time magazine article points to a flood of PFAS-related injury lawsuits in the United States, involving multi-million dollar settlements. Some lawsuits are popping up in Europe.
The IIHC investor group is urging the chemicals sector to scale down PFAS production and to publish a time-bound phase-out plan of products that contain persistent chemicals. IIHC also wants manufacturers to “substantially ramp up R&D and investment in the development of safer alternatives”.
Eric Pedersen, Head of Responsible Investments at Nordea Asset Management, which is involved with IIHC, said: “Investors are aware of the dangers of hazardous chemicals, the need to transition to safer alternatives, and the potential liabilities of companies with a history of involvement in the production or use of PFAS.”
Some PFAS have been restricted in England and Wales through UK REACH, and the Environment Agency (EA) is currently undertaking surveillance of PFAS as part of their groundwater quality monitoring network. A recent HSE report also makes a number of recommendations including limiting the use of PFAS-containing foams used by firefighters, as well as the use of PFAS in textiles, furniture, and cleaning products.