‘The new asbestos’: PFAS producers urged to stop production by investors

The world’s biggest chemical companies have been urged by investors to stop producing PFAS due to the “deep liability and insurance risks” the chemical group poses.

PFAS, short for per and polyfluorinated alkyl substances – a family of more than 10,000 chemicals – are used in a huge range of consumer products. However, concerns have been raised about their impact on human health and the environment. 

The Investor Initiative on Hazardous Chemicals (IIHC), which represents more than $10 trillion in assets under management or advice, has written to the heads of the 50 largest stock-listed chemical companies saying that the production and use of PFAS should be phased out, according to the Swedish government funded business group ChemSec.

The group has decided not to make the full letter public, but ChemSec has shared with ENDS that the letter states: “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.” 

Asbestos was banned in 1999, due health concerns, but was widely used in commercial buildings, homes and machinery up until that point and still poses legacy issues.

The letter puts forward three ‘asks’ to the businesses. These are to “increase transparency” around the risks of PFAS, publish a “time-bound phase-out plan” of products that are, or contain PFAS, and develop safer alternatives for hazardous chemicals following a “robust evaluation”. 

ChemSec senior business and investors advisor Sonja Haider described firms that still defend PFAS as “cynical” and “shortsighted”. 

She said: “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.”

Haider added that she does not think the full extent of the threat is factored into share prices yet, adding: “Analysts see the mounting legal claims but have little idea of just how widespread and critical the problem is.”

Last year, chemical giant 3M announced that it would phase out PFAS production by 2025. Shortly afterwards, in January 2023, a number of primarily EU investment firms sent a letter to major chemical companies calling for others to follow 3M’s lead in the face of increased PFAS litigation and tighter regulations on the horizon in the US and EU.