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A New Reckoning on Chemical Pollution

Jillian Stacy, Business Manager for Sustainable Chemistry at Enhesa, says detailed assessments are needed to track the hazards hiding in supply chains and production processes.

The bar is about to be raised on what it means to be a sustainable company. New standards being developed to address the impact of business activities on biodiversity loss, which is the degradation of natural ecosystems due to changes in land and sea use, direct exploitation of organisms, climate change and invasion of alien species and pollution, are the next target in the sights of global regulators. And many companies have no idea where to begin to start getting ready for this new phase of sustainability regulation.

Beyond greenhouse gas emissions

To date, the bulk of sustainability-related regulatory reforms have centered on greenhouse gas emissions and the environmental and social impacts associated with manufacturing, transporting, and selling goods. The first two reporting standards introduced by the International Sustainability Standards Board (ISSB), for example, while incredibly comprehensive in addressing detailed, industry-specific applications, focus exclusively on climate-related risk. But that’s just phase one.

It is clear that biodiversity loss is gaining prominence on the regulatory agenda. Europe’s Corporate Sustainability Reporting Directive (CSRD) will require companies to disclose biodiversity risks, opportunities, dependencies, and impacts starting in 2025. Likewise, the ISSB has made it clear that the next items it will tackle are biodiversity, ecosystems and ecosystem services, human capital, and human rights.

Those who have been tracking sustainability-focused regulatory developments over the past few years will also see a virtually identical pattern in the trajectory of climate-related disclosure requirements that have come into force over the past few years and the current evolution of regulation related to biodiversity loss.

Just as the Task Force on Climate-Related Financial Disclosures (TCFD) eventually led to the development of the ISSB standards and, now, jurisdiction-specific regulations on climate disclosure, a similar scenario is playing out with the Taskforce on Nature-Related Financial Disclosures (TNFD). The organisation recently published its recommendations for businesses to start reporting and acting on nature-related dependencies, impacts, risks and opportunities. Among its proposals are 14 core global disclosure metrics that cover everything from nature-related dependencies to location of assets and activities in ecologically sensitive locations.

Most of these will be familiar to businesses that have been getting ready for CSRD and ISSB compliance. In fact, most of the disclosures in the TNFD are drawn from the TCFD. However, there is one major contributing factor to biodiversity loss that businesses are going to struggle to assess and report accurately: chemical pollution.

Connecting the dots

Although chemical pollution is a major contributing factor in biodiversity loss, many companies are still very much in the dark when it comes to detailed chemical composition of the products they produce and sell – and that’s going to make accurately identifying and reporting chemical pollution risks in their global supply chains a major sticking point in the transition to corporate transparency on biodiversity impacts.

Take, for example, chemicals such as the microplastics commonly used in cosmetics and beauty care products. These synthetic particles, also known as microbeads, which are prized for their exfoliating properties, were found in upwards of 90% of cosmetics and beauty care products, including many soaps, facial creams and moisturizers. Though these chemicals have been found to be safe for dermal use in humans, their persistence in the environment has provoked a great deal of scrutiny by regulators. In 2015, for example, the US Congress amended the Federal Food, Drug and Cosmetic Act by passing the Microbead-Free Waters Act of 2015, which prohibited the manufacturing, packaging and distribution of rinse-off cosmetics containing plastic microbeads.

A similar phenomenon has been playing out with dyes used in the textile industry, which, although they pose no danger to humans who come into contact with them or wear blue jeans that have been soaked in them, have been found to be a major biodiversity loss risk. Ultimately, what happens is that untreated dyes can make their way into wastewater and cause coloration of water bodies, which reduces the amount of visible light that passes through the surface layer, which impedes photosynthesis for aquatic plants. This is a particular problem for microalgae, which can suffer growth inhibition and cell deformation when exposed to a synthetic dye. Eventually, this cycle can lead to damage to the fish supply and even contamination of the food supply, presenting health risks to humans and animals.

What makes these issues so thorny for the manufacturers and brands that produce and market products containing these chemicals is that their entire supply chains have been built around the idea of direct product safety. When it comes to their intended purpose – in these examples, helping facial scrubs exfoliate or giving our fabrics a pop of colour – microbeads and textile dyes do their job without causing harm. Accordingly, there has been very little work done by companies to examine the underlying biodiversity risks inherent in these chemicals.

In fact, in most cases, brands and manufacturers have very little visibility into the detailed chemical composition of their products – let alone the chemical formulations used by second-, third-, and fourth-tier suppliers in their global supply chains.

Historically, the only form of chemical disclosure companies receive from their suppliers has been limited to the information included on safety data sheets (SDS), which disclose information on chemicals and chemical compounds that could harm workers. While that’s an important piece of information for manufacturing safety standards, the SDS were never designed to address the impact of these chemicals on the environment, let alone their lingering environmental impacts when they are discarded.

Assessments needed

Right now, the direct link between chemicals used in the production of consumer goods—whether it’s makeup remover, a pair of jeans, dish detergent, food packaging or electronics—is a major blind spot for the companies involved with producing and selling these goods.

The most effective way to draw that connection and start the process of managing the risks associated with chemical pollution is to conduct detailed chemical hazard assessments, which identify the hazards inherent in the specific chemicals used in the production of a product and screen them against comprehensive lists as well as toxicological endpoints to provide a hazard score. To meet the increased level of scrutiny new biodiversity loss regulations will pose, businesses need to start thinking about not just the immediate impacts of the chemicals they use on human health, but also on the environment.

The fact is, products like soaps and detergents, colorants and different types of plastics, while not posing a significant human health hazard – and therefore potentially not captured in SDS as hazardous substances – do pose an extraordinarily high environmental health hazard, causing damage to sea life and ecosystems. Today, many companies working with and producing these chemicals are ignorant to their exposure and the role these compounds play in the degradation of the environment. Soon, they will have no choice but to start quantifying that risk and finding new ways to mitigate it.

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