Executive summary
Institutional investors have a deep-seated interest in economies that can provide healthy returns beyond the short and medium term. A growing body of research indicates, however, that the manufacture of hazardous chemicals poses significant risks to the environment and human health, such that it threatens the ability of the wider economic system to generate stable profits. As a result, some of the world’s largest investors, concerned about their future earnings, have put forward the following three asks to the global chemical industry:
- Increase transparency.
- Publish a time-bound plan to phase out products that are, or contain, persistent chemicals.
- Develop safer alternatives to hazardous chemicals.
This report outlines the mid- to long-term business case for individual chemical manufacturers to address these asks. Incentives include preparing for upcoming regulations, strengthening relationships with key stakeholders, improving efficiency and innovation, avoiding costly litigation, reducing costs linked to emissions and waste management, competitive advantage and industry leadership, and exploiting shifts in customer demand. The report also presents concrete examples of companies that have accepted the competitive need to make this transition, thereby actively lowering the financial risks to investors.
The writing is on the wall. Chemical companies that do not plan for the transition today will be tomorrow’s losers.