The reason for this update is because from an investor’s perspective the production and use of hazardous chemicals imply risks. Imagine if a new scientific finding is presented that singles out a chemical in widespread use as a threat to human health (which has happened many times). This often creates a public backlash for the companies that use this chemical. It’s the same with a regulatory change, if a chemical has a restriction placed on its use, or is added to ChemSec’s SIN List (identified by ChemSec as Substances of Very High Concern under REACH criteria – Europe’s chemicals legislation).
Substitution of chemicals does not happen overnight and there are increased costs associated with reformulating products and modifying processes, which can have significant implications for company performance. This implies vast risks for companies with long production cycles. A product that is made today, but put on the market in ten years’ time, could require the use of a substance which by that time has been banned or restricted.
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