For Investors

“Hazardous chemicals impose a heavy burden on workers, communities and the environment and present reputational, regulatory, and reformulation risks across a broad range of industry sectors.  Investors need to understand how companies are meaningfully managing these risks,” said Susan Baker of Trillium Asset Management.

"Chemicals in products and supply chains can be a hidden liability that can bear significant reputational risks for companies," said Constantina Bichta of Boston Common Asset Management. "As investors, we ask portfolio companies to assess chemicals used in their value chain and seek safer alternatives. The Chemical Footprint Project addresses a significant gap in chemicals supply chain assessment, where companies are able to assess chemicals used in supply chains, benchmark their performance relative to their peers, and identify areas for improvement."

“Insights from the Chemical Footprint Project are critically important to investors,” emphasized Jeremy Cote of Trillium Asset Management, “it adds a missing piece of relevant information to the research mosaic when integrating ESG factors into the investment process.”

“The Investor Environmental Health Network welcomes the launch of the Chemical Footprint Project,” announced Dr. Richard Liroff. “For too long chemicals and health have been missing pieces in Environmental Social Governance (ESG) assessments. Now we have a tool that investors can use to fill in this critical information.”

“Corporate performance in chemicals management varies widely, from barely being in compliance with regulations to capturing new markets through innovative products based on safer chemicals,” noted Sonja Haider of ChemSec. “We look forward to using a tool that rewards innovators for using safer substitutes.”

Issues for Investors

  • Consumers care about health:  Study after study shows that consumers value products that are safer for themselves and their families.
  • Chemicals are a growing concern in many sectors:  In health care, government, and professional markets, bid specifications and performance contracts increasingly integrate chemicals management into purchasing criteria.  Key business sectors include building products, electronics, and consumer packaged goods.
  • Until CFP, investors lacked the means to evaluate how businesses manage their chemical risks.

Value for Investors

  • Creates a clear, common logic: The CFP assessment tool provides a common set of questions for investors to ask of companies.
  • Provides easy to use results: CFP will provide investors with data that readily enables comparisons of companies on their corporate-wide chemical footprint.
  • Assesses chemical risks: The CFP results will identify the potential chemical risks of companies – providing a comprehensive measure of overall corporate chemical management performance.
  • Fills a critical missing gap in sustainability data: Environmental, Social, and Governance (ESG) factors are fundamental for the SRI community. The CFP data will fill in the investor mosaic on ESG. It provides signaling value regarding how companies benchmark across each other, could be a differentiating factor in sustainability performance, and enables investors to answer the question, are companies mitigating their chemical risks?
  • Fosters thorough chemicals management: Investors' requests can support companies in transforming strategic chemicals management to catch market opportunities for developing safer products.
  • Highlights corporate investment needs: The CFP data will inform investors’ knowledge of the types of investment decisions companies will have to make. For example, will they need to substitute chemicals of concern with safer alternatives or will they need to invest in systems for collecting and managing chemical ingredient data in products and supply chains? The data will inform marginal analyses of companies and inform understanding of the cost structures of companies.

Chemical Risk for Brands and Manufacturers

  • Hidden liability: Chemicals of high concern to human health and the environment (CoHCs) in products and supply chains are a hidden liability to corporations.
  • Reputational risk: Brands selling products made with or containing CoHCs carry significant reputational risk.
  • Regulations fail to capture the full liabilities of chemicals in products and supply chains.
  • Retail demand: Retailers, health care organizations, governments, and consumers are increasingly demanding products made with safer and healthier ingredients, and preferring brands that sell these products.