IIHC warns of chemical sector’s “new asbestos”
November 23rd, 2023
The Investor Initiative on Hazardous Chemicals (IIHC) has warned chemical companies to quit production of PFAS chemicals, calling them the “new asbestos” for the sector.
The group, which represents over $10 trillion in assets under management or advice, wrote to the CEOs of the world’s 50 largest listed chemical companies.
The letter stated: “Manufacturers and users of PFAS chemicals are exposed to deep liability and insurance risks, reminiscent of those historically linked to asbestos, which could materially adversely harm the long-term value of companies involved in their manufacture and sale.”
It also called on firms to increase transparency by disclosing both the share of revenue and production volume of products that are, or contain, hazardous chemicals to help investors assess relevant risks. It said this information should cover all operations and subsidiaries worldwide.
The initiative also recommended companies publish a time-bound phase-out plan of products that are or contain persistent chemicals, with a realistic road map and clear KPIs to track progress.
Finally, the letter called on firms to develop safer alternatives for hazardous chemicals.
While it noted a universally accepted definition of safer alternatives is still pending, the group said there are safer products to replace hazardous chemicals and support for an accelerated phase-out could present a significant opportunity for value creation.
The letter was signed by representatives from AXA Investment Managers, BNP Paribas Asset Management and Aviva Investors.
The letter was sent to the top-50 chemical producers, which IIHC coordinator, the International Chemical Secretariat (ChemSec), has ranked based on their efforts to reduce their chemical footprint.Last Updated: 23 November 2023