by Jayne Cunningham, Focus Group Leader – Environmental, Beazley
They are invisible but stay with you. In your clothes, furnishings, and even your water. They promise to protect but can cause you harm. This isn’t the start of a sci-fi film but is the reality of per- and polyfluoroalkyl substances, better known as PFAS.
Lurking on and beneath the surface, PFAS, so-called ‘forever chemicals’ have been used since the 1940s in a wide range of commercial products as diverse as non-stick pots and pans, plastics, fire-extinguisher foam and make-up. Their popularity has grown over the years due their durability and resistance to moisture and heat, but today they have become notorious for the hidden harm they can cause both to the environment and to human health1.
Today, we are seeing emerging chemicals, such as microplastics and phthalates come into the purview of regulators. The evidence shows that these are everywhere - in our homes, food and water - and once in our system they are there for life. Microplastics come from degraded plastic products and have been detected in fruits and vegetables, plastic water bottles, air, cosmetics and household dust. Phthalates are commonly used in plasticisers and are found not only in cosmetics but detergents, adhesives, insecticides, vinyl flooring, processed foods and even cooking oils. Accumulating in the body, microplastics and phthalates are believed to disrupt the endocrine system and release toxic chemical substances.2
Consumers are becoming more aware of the health issues associated with microplastics and phthalates and are demanding action from manufacturers and consumer goods firms.
These factors have combined to create an environmentally hazardous risk landscape for boardrooms whose businesses use or have exposure to these chemicals. Yet, concerningly, of the firms we surveyed for our Risk & Resilience research, only 20% ranked environmental damage as their number one risk, and 73% felt prepared3 to manage this risk. Firms could be in line for a rude awakening.
Under the regulatory microscope
Consumers are becoming increasingly aware of the potential harms linked to everyday items and are demanding action. In recent years there has been a raft of new regulations introduced to curb the risks of these chemicals, and a number of high profile PFAS and microplastic-related lawsuits brought against businesses.
In 2024, the US Environmental Protection Agency (EPA) took a number of actions to address PFAS standards and safety, including expanding the number of substances covered by the Toxic Release Inventory program and promulgating new or revised rules using powers under the:
In Europe, this September, the European Commission announced new REACH regulations1 to restrict usage of undecafluorohexanoic acid (‘PFHxA') and PFHxA ‑ related substances which are a sub-set of PFAS chemicals4.
The European Union has implemented regulations under REACH to restrict synthetic polymer microparticles and restricts certain phthalates in plastic materials to a maximum of .1% weight.
Policymakers are moving fast and as the regulatory landscape expands, firms with international operations will need to prepare themselves for an increasingly complex regulatory environment.
Shoring up your defence
As environmental risks increase, regulators and governments continue to implement the ‘polluter pays’ principle. Consequently, firms operating in this space need to consider their environmental liability risk and how they can protect themselves from potential lawsuits and damages associated with PFAS, microplastics and other environmental risks.
If companies and manufacturers know that they are using PFAS chemicals in their goods, they need to be aware of the dangers and clearly disclose this to the relevant bodies and consumers.
By doing the right thing, and preparing for and being aware of the environmental threats they face executives can help their firm to weather the storm, and repair the environmental and reputational damage as quickly and effectively as possible.
1- Our Current Understanding of the Human Health and Environmental Risks of PFAS | US EPA
2- Microplastics are in our bodies. Here's why we don't know the health risks (sciencenews.org)
3- ‘Very’ or ‘moderately’ prepared survey answers combined
4- https://ec.europa.eu/commission/presscorner/