7th Jun 2023

'Forever chemicals' industry hit by perfect storm

  • The stock market's verdict is in — and a wave of US litigation has sent the value of chemical companies downwards (Photo: European Parliament)
Listen to article

Institutional investors controlling assets worth $8 trillion [€7.57 trillion] called in November 2022 called for a phase-out of dangerous 'forever chemicals'.

A tsunami of court cases in the US, coupled with EU plans to restrict toxic PFAS "forever chemicals" have made investments in the industry less attractive.

Read and decide

Join EUobserver today

Become an expert on Europe

Get instant access to all articles — and 20 years of archives. 14-day free trial.

... or subscribe as a group

  • PFAS chemical companies have so many lawsuits pending it is not clear if they will survive — probably right so, according to Sonja Haider from ChemSec (Photo: ChemSec)

But long before the investors signed and sent their letter to CEOs in chemical companies, the stock market had reacted and sent the value of the companies downwards.

While in the last five years, the major US stock index SP500 has risen by 41 percent, shares in most of the major chemical companies have fallen.

Worst hit has been 3M, losing 57 percent of its share value in the last five years.

3M (originally the Minnesota Mining and Manufacturing Company) is an US multinational conglomerate and one of the world's largest PFAS manufacturers.

The company surrendered shortly before Christmas, when on 20 December 2022 it announced it will "exit per- and polyfluoroalkyl substance (PFAS) manufacturing and work to discontinue the use of PFAS across its product portfolio by the end of 2025".

"It was a nice Christmas present", recalls Sonja Haider.

Previously a stockbroker, Haider now works as ChemSec's senior business and investors advisor.

ChemSec is a Swedish-based NGO helping companies to avoid hazardous chemicals in their production and find safer alternatives

"I think 3M decided more on the basis of litigation. But maybe ChemScore (a ranking of chemical companies) and the letter became the last drop in the barrel", she said.

"On the one side we [ChemSec] were very happy, on the other side I must admit that stopping polluting the planet has a sour feeling. It's a bit like the husband who stops beating his wife. Yes, it is a good thing to stop, but all the pollution could have been avoided. The companies have known for decades that they were polluting the planet".

According to a Bloomberg Law analysis, there were more than 6,400 PFAS-related lawsuits filed in US federal courts between July 2005 and March 2022.

3M was named in many of the PFAS-related lawsuits and its legal liabilities could tally as much as $30bn, according to Bloomberg.

California sues

One important new major case was added to the list of lawsuits on 10 November 2022 when the state of California sued a large group of chemical companies, including 3M and DuPont, over damage caused by PFAS.

In the lawsuit, California attorney general Rob Bonta alleges that the "manufacturers knew or should have known that PFAS are toxic and harmful to human health and the environment, yet continued to produce them for mass use and concealed their harms from the public".

"As a result, these toxic 'forever chemicals' are pervasive across California's bays, lakes, streams, and rivers; in its fish, wildlife, and soil; and in the bloodstream of 98 percent of Californians", he said.

"Personally, I think that companies have so many lawsuits pending that it is not clear if they will survive. And probably right so", commented Haider from ChemSec.

"You see it on the stock market prices of DuPont, Chemours, 3M and alike. Since 2018 their stock prices have underperformed dramatically compared to the market. It means that investors already went out. They fear the litigation is coming. Now the companies try to get away. They merge, they split and move things into other companies. Will they manage? Well, only the future will show", Haider said.

Europe regulates

Moving to Europe, 3M is also at the centre of a major environmental scandal in Belgium, where the company produced PFAS from 1976 to 2002.

A tunnel project in Antwerp revealed extraordinary levels of PFAS in the water, soil, and humans near 3M's factory in the town of Zwijndrecht.

But the people living in Belgium are not able to go to the courts and claim compensation, like American citizens do.

"We have a big difference from Europe and the US. In the US you have the litigation scheme. It is a system where you can sue a company after damage is done and you get a compensation and this can go into such high levels that you see PFAS litigation up to $30bn is pending. This is huge. This doesn't happen in Europe. Because in Europe we have a different system", Haider explains.

"We have the precautionary principle in the EU policy which means that we up front try to avoid pollution. The authorities are looking at the substances to see if they are safely produced. In the end we do not have such a huge PFAS production in Europe as in the US. Nevertheless, we do have places like in Zwijndrecht and other areas in Europe but then it is really difficult to sue the company. It's a different system. But the American litigation system will on its own really hamper the business of those PFAS producers".

In Europe PFAS is not likely to be pushed out via court cases, but perhaps it can be done via EU rules?

A group of five countries, Germany, Sweden, Netherlands, Denmark and non-EU Norway in January 2023 tabled a joint proposal in Brussels to restrict around 10,000 per- and polyfluoroalkyl substances (PFASs).

EUobserver will examine the chances for the proposal to become binding EU law. Stay tuned.


Will EU Commission capitulate to toxic chemicals industry?

The sharks are circling around the REACH proposal on 'forever chemicals' and there are rumours that it could be dropped from the commission's agenda. If true this would be a major coup for the chemicals industry and its political allies.


Corporate lobbying and the delay of the EU's Reach directive

The European Commission has delayed publishing its proposal to revise the Reach regulation, a key part of the European Green Deal's chemicals strategy. Centre-right political pressure, backed up by corporate lobbying, seems to have been behind the decision to delay.

PFAS 'forever chemicals' cost society €16 trillion a year

Researchers found that global societal costs of the so-called forever chemicals or PFAS amount to €16 trillion per year. Meanwhile, the bigger producers of these chemicals are also among the ones spending the most to lobby EU policies.


Final steps for EU's due diligence on supply chains law

Final negotiations on the EU due diligence law begin this week. But will this law make companies embed due diligence requirements in their internal processes or incentive them to outsource their obligations to third parties?

Latest News

  1. Final push for EU-Mercosur deal, amid deforestation fears
  2. Ministers given 50/50 chance of reaching EU asylum deal
  3. EU Commission wants better focus on mental health care
  4. Right of Reply from the Hungarian government
  5. True scale of horror in today's Belarus hard to comprehend
  6. Israeli settlers encircling Jerusalem, EU envoys warn
  7. No clear 'Qatargate effect' — but only half voters aware of EU election
  8. Part of EU middle class 'being squeezed out', MEP warns

Stakeholders' Highlights

  1. International Sustainable Finance CentreJoin CEE Sustainable Finance Summit, 15 – 19 May 2023, high-level event for finance & business
  2. ICLEISeven actionable measures to make food procurement in Europe more sustainable
  3. World BankWorld Bank Report Highlights Role of Human Development for a Successful Green Transition in Europe
  4. Nordic Council of MinistersNordic summit to step up the fight against food loss and waste
  5. Nordic Council of MinistersThink-tank: Strengthen co-operation around tech giants’ influence in the Nordics
  6. EFBWWEFBWW calls for the EC to stop exploitation in subcontracting chains

Stakeholders' Highlights

  1. InformaConnecting Expert Industry-Leaders, Top Suppliers, and Inquiring Buyers all in one space - visit Battery Show Europe.
  2. EFBWWEFBWW and FIEC do not agree to any exemptions to mandatory prior notifications in construction
  3. Nordic Council of MinistersNordic and Baltic ways to prevent gender-based violence
  4. Nordic Council of MinistersCSW67: Economic gender equality now! Nordic ways to close the pension gap
  5. Nordic Council of MinistersCSW67: Pushing back the push-back - Nordic solutions to online gender-based violence
  6. Nordic Council of MinistersCSW67: The Nordics are ready to push for gender equality

Join EUobserver

Support quality EU news

Join us