UBS Sustainability & Impact: Chemical pollution and the need to transition to sustainable chemistry

The true cost of toxic chemical substances is not captured by a GDP-driven economy

In many instances chemicals have been a boon for human health, productivity, and economic growth. But increasingly their heavy usage has begun to threaten the health of people and the planet. Indeed, the threat of chemical pollution now stands on a par with climate change and biodiversity loss as one of our greatest challenges.

But the worst may be yet to come. The production of chemicals is predicted to only increase in the coming decades, as the world’s population keeps growing.

As the world increasingly shifts towards a more sustainable form of living, and some are calling for a paradigm shift to embrace the impact economy, chemical companies that proactively embrace sustainable chemistry may be able to benefit from scaling opportunities.

In an impact economy, investors have a key role to play, particularly when it comes to their engagement with chemical companies. For a start, they can act as active owners, using their engagement and voting rights to encourage companies to transition to sustainable chemistry practices. They can also seek to finance innovation through blended finance or venture capital, while shifting their capital away from companies which aren’t transitioning to safer alternatives or failing to invest sufficiently into sustainable chemistry solutions.

READ THE FULL BLOG to learn more about how IEHN member, UBS Asset Management, is thinking about a market transition to sustainable chemistry.