For investors

ChemSec’s role

The world is facing a chemical pollution crisis — and owning toxic assets is not a good bet for the future. 

ChemSec wants to help investors make smarter choices — for human health and the environment as well as for their own portfolios. We encourage investors to push for change within the companies they own, including using its voting power or divesting from companies that stubbornly continue to fuel the chemical pollution crisis.

Among other things, ChemSec coordinates the Investor Initiative on Hazardous Chemicals (IIHC), an investor-led collaborative engagement initiative that engages with the world’s largest publicly traded chemical companies.

Every year, we also publish ChemScore, the benchmark sustainability index for chemicals management within the chemical industry.

Want to know more about the companies that produce or import hazardous chemicals into Europe or the United States? Take a look at our searchable database SIN Producers!

Why should investors care about hazardous chemicals?

Synthetic chemicals are vital to modern society, supporting the production of essential goods and driving technological and economic progress. However, the current reliance on chemicals that are hazardous to human health and ecosystems or that accumulate in living organisms is becoming a systemic risk and a threat to long-term profitability.

According to an industry analysis, the global chemical industry contributed 7% to the global GDP in 2017. However, research indicates that the negative effects of chemical exposure are worse. The disease burden alone associated with environmental chemical exposures is estimated to exceed 10% of global GDP.

The costs linked to remediating soil and water from persistent chemicals released each year are nothing short of exorbitant. Authorities do not tax these negative externalities. So, the costs to society are not adequately reflected in the prices of hazardous chemicals or products that contain them. 

Not only are human health and ecosystem stability being adversely affected, but chemical pollution also leads to contamination issues for cities and municipalities, many of which are already under substantial fiscal pressure. They therefore have to devote scarce resources to remediation and dealing with the psychosocial impact on people living in polluted areas.

These are only a few of the negative consequences that hinder long-term profitability. Others include increased costs of rehabilitation and sick leave and diminished productivity of individuals whose brains or other organs are damaged. For example, what is the annual cost to the US economy from the hundreds of thousands of intellectual disability cases stemming from early life exposure to chemicals such as polybrominated diphenyl ethers, organophosphates and methylmercury?

So, why should investors care about hazardous chemicals? Because today’s use of hazardous chemicals presents systemic risks to all sectors. This is of particular concern to long-term institutional investors, such as pension funds and insurance companies, with a deep-seated interest in economies that can provide healthy returns beyond the short and medium term.