Constantina Bichta, PhD, Associate Director of ESG Research
Earth Day 2022 calls on us to “Invest in Our Planet”, an appeal to protect and preserve human health and the natural environment through bold and equitable action and innovation. Mindful of this call to action, we are highlighting Boston Common’s work in sustainable chemicals management and green chemistry investing, key elements in fostering a greener, healthier, more just and equitable future.
Unsafe chemicals in consumer products are responsible for several ill effects: Potential serious health effects due to toxicity, carcinogenic, and mutagenic qualities; severe environmental degradation of terrestrial and aquatic systems due to bioaccumulation, which impairs the ability of earth and its ecosystems to regenerate; increased risks to workers’ safety as well as fence-line communities near industrial facilities, contributing to social inequity and racial injustice issues. Sustainable chemicals management and green chemistry opportunities are therefore critical in making the transition to a low carbon economy and supporting healthier and more equitable financial and social systems.
As engaged investors, we assess portfolios exposure to physical risks presented by climate change, evaluate transitional opportunities (such as investing in clean tech and green chemistry solutions that support the low-carbon economy transition), and enhance companies’ focus on climate-related risks through shareowner engagement. To this end, Boston Common is a signatory to the Net-Zero Asset Managers’ Initiative, the Finance for Biodiversity Pledge, and the 2025 Deforestation Free Agricultural Commodities Pledge.
There is strong evidence that the value of green chemistry is expanding rapidly, driven by consumer demand, corporations stepping up to meet the demand, and an improving regulatory environment. Sustainability-marketed products, for example, are responsible for more than half of the growth in Consumer Packaged Goods (CPGs) from 2015 to 2019, growth that has continued through the pandemic.[i] Millennials spent almost 14% more on organic food and beverages in 2019 vs. 2018, and they are willing to pay more for products with sustainable, organic, or natural ingredients.[ii] European consumers are moving away from single use plastics and becoming wary of health risks from exposure to PFAS (per- and polyfluoroalkyl substances), the forever chemicals that find their way into households through home goods, products, and food packaging. CPG companies are looking to improve the carbon footprint and safety of their products by replacing petrochemical inputs with bio-based alternatives, improving product packaging, increasing use of recycled content, and removing hazardous substances such as PFAS.
Regulatory momentum is also building. In the US, the Environmental Protection Agency (EPA) has promised to regulate PFAS more strictly but individual States aren’t waiting to step up – 32 States[iii] are considering policies related to PFAS in 2022 alone. Like REACH, (the Registration, Evaluation, Authorization and Restriction of Chemicals regulation)[iv] the European Union is again in a position to lead the world in sustainable chemicals management with the new Chemicals Strategy for Sustainability. Ambitious in scope, the Strategy targets chemicals production to support net-zero, circular, and digital economy transition goals and a toxic-free environment. It targets a ban of the most harmful chemicals in consumer products and a phase-out of entire classes of highly problematic chemicals such as PFAS. The Strategy also addresses inequity through enhanced focus on use of unsafe chemicals by low income and vulnerable groups.
To tackle plastic waste, the UN has agreed to a resolution to combat plastic pollution by addressing the full lifecycle of plastics. The largest intergovernmental commitment since the 2015 Paris Accord – the resolution magnifies the importance of removing unsafe chemicals from supply chains to foster the transition to net zero, support circular economy objectives, and improve biodiversity in aquatic and terrestrial ecosystems.
We are encouraged by the work of grocery and home improvement retailers[v] to eliminate PFAS from packaging and home goods, while beauty and personal care product companies are expanding Restricted Substances Lists (RLS) to include chemicals found in products marketed to women of color.[vi]
We are using individual and collective corporate engagements to heighten the focus on sustainable chemicals management and green chemistry alternatives. Since 2018, we have worked with the UN PRI Plastic Investors Working Group, a global investor coalition representing $6 trillion in AUM. Under the PRI group, we are working to eliminate problematic and unnecessary plastics to ensure remaining plastics are reusable, recyclable, or compostable, and that packaging is free of hazardous chemicals thus respecting the health, safety, and rights of people across the value chain.
Under the Investors for Sustainable Solar Campaign led by the Investors Environmental Health Network and the Silicon Toxics Valley Coalition, we are engaging the solar industry on its transition to net zero with the goal of improving the health and safety of workers’ by removing hazardous substances in solar manufacturing and its supply chain.
The pandemic has laid bare the interconnectedness of human and environmental health. A renewed focus on diversity, equity, and inclusion and increased awareness of human impacts on climate and biodiversity has raised the urgency to act. So, let’s pause this Earth Day to reflect on the role of sustainable chemicals management and how green chemistry can serve us in supporting economic stability and growth, health, and racial and environmental justice.