Investors urge world’s largest chemical companies to quit hazardous substances


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  • 23 investors with $ 4.1 billion write to 50 companies
  • Call for transparency on volumes, elimination plan
  • Ahead of stricter rules, threat of cleaning costs

LONDON, Dec. 13 (Reuters) – Investors with $ 4.1 trillion in assets urge the world’s largest chemical companies to phase out production of hazardous substances that persist in the environment and are linked to serious health problems .

The move by 23 investors, including Aviva Investors (AV.L) and Storebrand (STB.OL), comes as regulators toughen rules around their use and analysts warn some companies could face billions of dollars in associated cleanup and compensation costs.

In a letter to the world’s 50 largest chemical producers with combined revenues of $ 860 billion, investors are calling for increased transparency on the number of “substances of very high concern” they produce each year.

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While US and European regulators have disclosure requirements on hazardous chemicals, many other countries do not, and information on volumes produced around the world is not publicly available.

To help investors, companies should also share the data with the nonprofit International Chemical Secretariat (ICS), which advocates for a transition to safer chemicals and tracks the performance of major producers, according to the letter viewed by Reuters.

“We believe that the sustainable management of chemicals is the key to financial outperformance,” Eugénie Mathieu, senior analyst at Aviva Investors, told Reuters, citing the example of a dispute over PFAS or perfluoroalkyl and polyfluoroalkyl substances, used in applications such as lubrication and industrial coatings.

So-called “persistent chemicals” such as PFAS – which slowly degrade and are linked to a range of diseases after entering local water supplies – have already led to payments from companies, including 3M (MMM.N), and other cases are ongoing.

POSSIBLE COSTS

“In recent years, the financial implications for (a) corporate responsibility for past and current pollution production of persistent chemicals, in particular PFAS, have been clear,” she added, citing the An analyst’s estimate of the potential costs in the United States of between $ 25 billion. and $ 40 billion.

A spokesperson for 3M, one of the companies to receive the letter, said the company is committed to environmental stewardship, adding, “We welcome the opportunity to engage with investors and other stakeholders on this subject ”.

Belgian company Umicore (UMI.BR) said it had engaged with ICS on the group’s ChemScore questionnaire in October and that it complies with applicable legislation when it manufactures, imports or sells its products, using a “risk-based” approach to chemicals management.

With growing regulatory and litigation concerns, investors have said they want all companies to make a time commitment to phase out production of chemicals, focusing on chemicals first. persistent.

The U.S. Environmental Protection Agency earlier this year presented a plan to tighten rules on persistent chemicals, while the European Union is also seeking to strengthen legislation and push for a transition to materials. less dangerous.

Finally, investors said companies should develop plans to develop products that can be reused as part of a “circular economy”, or allow customers to design products that can be used in this way – a key objective of the companies. European legislators.

“The chemical industry is at the start of the supply chain and therefore has a role to play in promoting the circular economy,” the letter says, citing examples such as the use of waste or bio-based materials. as raw materials.

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Additional reporting by Ross Kerber; Editing by David Holmes

Our Standards: Thomson Reuters Trust Principles.

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