Toxic Chemicals - Investor Page
Investors Need the Reform of the Toxic Substances Control Act
New legislation has been introduced in the House and Senate to overhaul TSCA, The Toxic Substances Control Act of 1976. The new legislation deserves investor support not only because it enhances protection for public health and the environment, but there’s a compelling business case for it.
The new legislation will lower business’ overhead costs, promote innovation, and enhance the global competitiveness of American industry. Regulatory reform can help drive investment opportunities in the safer materials “space”, as the existing regulatory system that favors older, dirtier chemistries is changed to broaden markets for newer, safer chemicals.
Asbestos is the poster child chemical that underscores why investors should support TSCA reform. EPA was unable to regulate asbestos under TSCA, the trial bar stepped in to fill the gap, and investors paid the price when companies declared bankruptcy because of their asbestos liabilities.
TSCA’s so limited that California and other states are now stepping up to develop their own lists of chemicals that need to be regulated, creating a patchwork of regulatory requirements to which businesses must adapt.
A 2009 Government Accountability Office (GAO) review of TSCA identified some of its major shortcomings:
- EPA lacks adequate scientific information on the toxicity of many chemicals. One major reason is that TSCA generally places the burden of obtaining data on the EPA rather than on chemical companies.
- While TSCA authorizes EPA to ban, limit, or otherwise regulate existing toxic chemicals, EPA must meet a high legal threshold, which has proven difficult. Since 1976, EPA has issued regulations to control only five existing chemicals.
- Because of TSCA’s prohibitions on the disclosure of confidential business information, EPA has limited ability to share information on chemical production and risk.
TSCA’s failures place significant burdens on downstream users of toxic chemicals in products. They must:
- Research for themselves what chemicals are in products and what hazards they could pose to human health and the environment.
- Identify and test the safety of alternatives.
- Continue to use chemicals of high concern because producers do not offer safer alternatives.
- Make chemical and product selection decisions in the absence of adequate hazard information.
- Constantly respond to emerging and shifting concerns from the public.
- Face potential liability from the use of hazardous materials.
- Steer through an unpredictable and constantly changing regulatory climate.
For more information, see:
This letter was sent to Congress on September 28, 2010, but we welcome new colleagues to sign on as we will be continuing to send this message to legislators until TSCA reform with strong provisions is passed.
Dear Senators Boxer, Lautenberg and Inhofe, and Mr. Waxman, Barton, Rush and Whitfield,
As investors with $XX in assets under management, we are writing to urge your support for substantial reform of the Toxic Substances Control Act of 1976 (TSCA). We specifically endorse S. 3209, the Safe Chemicals Act of 2010 and H.R. 5820, the Toxic Chemicals Safety Act of 2010 as the best legislation for achieving comprehensive TSCA reform.
Reform will:
• bolster productivity and reduce health care costs
• reduce overhead costs to business from managing toxic chemicals
• promote the international competitiveness of American business
• stimulate and reward innovation in products and industrial processes
• lower market risks to companies and shareholders
The principal goals of reform should be:
• fast-track regulatory action on well-studied chemicals, especially those that are prime candidates for restriction or elimination in international markets, particularly Europe
• increase available information on chemical toxicity to reduce burdens on downstream manufacturers and retailers who want to reduce and eliminate toxic hazards in their products and supply chains
• provide incentives for green chemistry, including expedited approval of chemicals with reduced toxicity profiles
• incorporate strong “hot spot” provisions that identify and reduce hazards in communities disproportionately burdened by toxic chemicals such as Mossville, Louisiana
• set a safety standard that protects the very young and other especially vulnerable populations from the low doses of chemicals and chemical mixtures encountered in every-day life.
Exposures to toxic chemicals produce a tremendous drag on the US economy, contributing to health problems throughout supply chains and billions of dollars in health care costs annually. Chemical exposures lower worker productivity, raise corporate health care costs, and can relegate to the social welfare system individuals who otherwise could be productive contributors to the workplace. As widely diversified investors we are concerned about the impact of these costs on the value of our portfolios and believe TSCA reform will reduce or eliminate these costs.
Regrettably, because of weaknesses in TSCA, companies eager to reduce their “toxic footprint” have encountered major challenges in identifying the chemicals in their products and supply chains and gathering information about the toxic hazards associated with those substances. A core goal for the Safe Chemicals Act of 2010/Toxic Chemicals Safety Act of 2010 should be to move American business swiftly away from 20th Century chemistry, with its legacy of Superfund sites, impaired human health, and damaged ecosystems, to greener 21st Century chemistry that will better serve the long term well-being of business, humanity, and Planet Earth.
Sincerely yours,
The undersigned…
