By Simon Jessop

LONDON (Reuters), Investors with assets of $4.1 trillion are urging major chemical companies around the globe to stop producing hazardous chemicals that linger in the atmosphere and can cause serious health issues.

This was done by 23 investors, including Aviva Storebrand and investors are responding to the tightening of regulations regarding their use and analysts warning that some companies may face huge compensation and clean-up costs.

The investors wrote to the 50 largest global chemical producers, with combined revenues of $860billion.

Although U.S. and European regulators require disclosure of hazardous chemicals, other countries have different requirements. Public information about global volumes are also not available.

Companies should share data with the International Chemical Secretariat (ICS) to help investors. This non-profit organization advocates for safer chemicals, and tracks performance of top producers.

Eugenie Matieu from Aviva Investors said that sustainability in chemical management was key to financial success. She cited the instance of litigation involving PFAS (perfluoroalkyl) and polyfluoroalkyl substances. They are found in industrial coatings as well as lubrication.

So-called “persistent chemical” PFAS – slow to degrade after being introduced to local water supplies and linked to a wide range of illnesses – has already resulted in companies such as 3M receiving payouts. Additional cases are pending.

POTENTIAL COMMISSIONS

She stated that the financial implications of a company’s past and present production of persistent chemicals has been evident in recent years.

3M was one of those companies that received the letter. A spokesperson said 3M is committed to environment stewardship and added: “We are happy to have the chance to engage investors and other stakeholders about this topic.”

Umicore, a Belgian company, stated that it engaged with ICS in October over group’s ChemScore question and is now compliant with applicable legislation when it manufactures, imports, or sells products. It uses a risk-based approach to chemical management.

The investors expressed concerns about the increasing regulatory and litigation issues.

An earlier plan by the U.S. Environmental Protection Agency to make persistent chemicals more difficult was laid out. Meanwhile, Europe is looking for ways to improve legislation and to encourage safer material transitions.

Finally, investors suggested that firms should develop plans to make products that can reused within a “circular economic” or allow customers the ability to design products that are reusable in that way. That is what EU lawmakers have been focusing on.

The chemical industry, which is located at the origin of the supply chains, has a key role to play in driving forward the circular economy,” said the letter. They cited specific examples including the use of bio-based materials or waste as feedstocks.