Investors with $10 Trillion in Assets Warn Chemical Sector: PFAS is the New Asbestos

Over 50 institutional investors, representing a combined $10 trillion in assets, have issued a stark warning to the chemical sector, declaring PFAS chemicals as 'the new asbestos.' In a letter to the CEOs of the world's 50 largest chemical companies, the Investor Initiative on Hazardous Chemicals (IIHC) urged firms to follow 3M's lead and cease production of PFAS, citing deep liability and insurance risks akin to those historically linked to asbestos. The IIHC, including major entities like Storebrand Asset Management, Allianz Investment Management, BNP Paribas Asset Management, and Resona Asset Management, emphasized the potential long-term harm to companies' value involved in PFAS manufacture and sale.

The IIHC, which intensified its interventions this year by engaging with 16 chemical firms on production reforms, drew parallels between PFAS and asbestos, emphasizing the potential for significant legal and financial consequences. Despite early recognition of PFAS hazards, production has reached an all-time high, with U.S. companies facing a surge in lawsuits extending beyond producers to users in various sectors such as auto, food, textiles, cosmetics, and paper. The first bankruptcy related to PFAS occurred this year, and more are anticipated.

In Europe, 3M settled for €500 million last year, but new lawsuits have emerged in the Netherlands and Belgium. Both the U.S. states and the European Union are in the process of drafting PFAS bans. An analysis by Praedicat estimates potential bodily injury costs for ChemScore-ranked U.S. companies, ranging from $10 billion to $41 billion, with additional costs for removing PFAS from U.S. drinking water estimated between $64.5 billion and $248 billion. The full cleanup costs, exceeding $400 billion, could potentially be shouldered by customers of the ChemScore companies.

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