Monday

4th Dec 2023

Forever chemicals will be the 'new asbestos', investors warn

  • 'PFAS are the new asbestos; that is clear to us and increasingly to investors,' warned Sonja Haider, from ChemSec (Photo: Kevin Casper)
Listen to article

In the wake of emerging litigation and strict regulation on so-called 'forever chemicals', there are growing worries among investors that the chemicals technically known as PFAS could be the 'new absestos'.

"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," a group of investors warned the world's largest chemical companies on Wednesday (15 November).

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

The Investor Initiative on Hazardous Chemicals (IIHC), which is coordinated by the Swedish NGO ChemSec, involves more than 50 institutional investors which represent over $10 trillion [€9.2 trillion] in assets under management or advice.

IIHC members include Storebrand Asset Management, Allianz Investment Management, and BNP Paribas Asset Management.

Investors said chemical giants should publish a realistic phase-out plan for products containing forever chemicals and develop safer alternatives.

"Safer products that substitute the use of hazardous chemicals and support accelerated phase-out are likely to present a significant opportunity for value creation," they wrote in a letter.

According to Eugenie Mathieu from Aviva Investors in the UK, many in the chemical industry welcome investor pressure and see it as a chance toward greater sustainability.

Asbestos déjà vu?

Despite the widespread health concerns around asbestos, it was considered a 'magic mineral' because of its ability to withstand flames.

By the early 1900s, global asbestos production had expanded to exceed 30,000 tonnes per year.

Yet asbestos quickly became the subject of thousands of lawsuits, which led asbestos manufacturers to file for bankruptcy in the US.

In the EU, the use of asbestos has been banned since 2005 but several EU countries introduced restrictions in the 1990s.

Likewise, PFAS production is today very profitable, despite the massive cost to society and human well-being — which are increasingly leading to lawsuits.

"We see parallels emerging between the PFAS and asbestos issue, especially with respect to the substantial liability and insurance risks associated with asbestos in the past," said Sabrina Sanz from French asset manager Amundi.

Kidde-Fenwal this year faced more than 4,400 lawsuits over the production of PFAS-based firefighting foam and experts argue that the US-based company will be the first of many to file for bankruptcy to avoid litigation, Bloomberg reported.

In Europe, the chemical giant 3M reached a multimillion settlement last year with the Flemish government, but it is now facing fresh litigation over PFAS pollution in the Netherlands.

Similarly, Chemours is facing new lawsuits in the Netherlands for the contamination of soil, air, and surface water with PFOA and GenX.

'Eroding shareholder value'

"We have seen the effect that group litigation, such as the $10.3bn settlement by 3M this year, can have in eroding shareholder value," said Victoria Lidén from Oslo-based financial group Storebrand.

Lidén also said that the mishandling of hazardous chemicals is among the most significant and immediate environmental risks for investors.

ChemSec's ChemScore project published a ranking on Wednesday, featuring the 50 largest chemical companies globally. The findings expose that the leading producers of PFAS (3M, AGC, Chemours, Daikin and Honeywell) rank lowest in terms of sustainability.

BASF and Bayer, two of the biggest PFAS producers in Europe, rank 25 and 23 respectively.

BASF produces around 27 persistent chemicals and Bayern at least 13 forever chemicals — being exposed to stranded assets and significant liability risks, according to ChemSec.

"PFAS are the new asbestos; that is clear to us and increasingly to investors. The parallels are stark: scientists blow the whistle, and firms continue producing for decades until, eventually, the law catches up with them and it's game over," said  Sonja Haider, from ChemSec.

In Europe, PFAS pollution hotspots have been identified in Germany, Belgium, Sweden, Italy, and Denmark.

The EU is preparing a ban on the non-essential uses of PFAS. But critics argue the ban is moving too slowly, possibly not taking effect until 2025.

The global cost to society of PFAS to society is estimated at €16 trillion per year. Exposure to forever chemicals costs Europeans between €52bn and €84bn annually, according to the Nordic Council of Ministers.

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.

'Widespread' forever chemicals exposure across Europe

There is widespread human exposure to so-called 'forever chemicals' — technically known as PFAS — in Europe, with growing hotspots identified in Germany, Belgium, Sweden, Italy, and Denmark, experts warned in a new piece of research.

Member states stall on EU ban on forced-labour products

More than two years after the EU Commission first proposed a law on forced labour, inter-institutional negotiations have not started because member states cannot reach agreement — risking the text's adoption before the 2024 European Parliament elections.

Opinion

The EU's U-turn on caged farm animals — explained

A European citizens' initiative — signed by 1.4 million people — saw the EU Commission promise to ban cages for 300 million farmed animals. Then the farming lobby got involved.

Opinion

'Pay or okay?' — Facebook & Instagram vs the EU

Since last week, Mark Zuckerberg's Meta corporation is forcing its European users to either accept their intrusive privacy practices — or pay €156 per year to access Facebook and Instagram without tracking advertising.

Latest News

  1. Afghanistan is a 'forever emergency,' says UN head
  2. EU public procurement reform 'ineffective', find auditors
  3. COP28 warned over-relying on carbon capture costs €27 trillion
  4. Optimising Alzheimer's disease health care pathways across Europe
  5. Georgian far-right leader laughs off potential EU sanctions
  6. The EU's U-turn on caged farm animals — explained
  7. EU-China summit and migration files in focus This WEEK
  8. COP28 debates climate finance amid inflated accounting 'mess'

Stakeholders' Highlights

  1. Nordic Council of MinistersArtist Jessie Kleemann at Nordic pavilion during UN climate summit COP28
  2. Nordic Council of MinistersCOP28: Gathering Nordic and global experts to put food and health on the agenda
  3. Friedrich Naumann FoundationPoems of Liberty – Call for Submission “Human Rights in Inhume War”: 250€ honorary fee for selected poems
  4. World BankWorld Bank report: How to create a future where the rewards of technology benefit all levels of society?
  5. Georgia Ministry of Foreign AffairsThis autumn Europalia arts festival is all about GEORGIA!
  6. UNOPSFostering health system resilience in fragile and conflict-affected countries

Stakeholders' Highlights

  1. European Citizen's InitiativeThe European Commission launches the ‘ImagineEU’ competition for secondary school students in the EU.
  2. Nordic Council of MinistersThe Nordic Region is stepping up its efforts to reduce food waste
  3. UNOPSUNOPS begins works under EU-funded project to repair schools in Ukraine
  4. Georgia Ministry of Foreign AffairsGeorgia effectively prevents sanctions evasion against Russia – confirm EU, UK, USA
  5. Nordic Council of MinistersGlobal interest in the new Nordic Nutrition Recommendations – here are the speakers for the launch
  6. Nordic Council of Ministers20 June: Launch of the new Nordic Nutrition Recommendations

Join EUobserver

Support quality EU news

Join us