By Lionella Pezza, Director of Impact Research and Mary Beth Gallagher, Director of Engagement. Excerpted from our First Quarter 2025 Impact Update
Everyone deserves clean air and water, free of harmful toxins. The United Nations (UN) recognized this in 2022 with a resolution declaring that access to a clean, healthy, and sustainable environment is a universal human right.
Since then, we have witnessed growing awareness and concern over the serious health and environmental risks posed by chemicals found in many everyday products. Per- and polyfluoroalkyl substances, more commonly known as PFAS or “forever chemicals,” are commonly used in products like non-stick cookware, paints, cosmetics, raincoats, firefighting foam, and much more. These chemicals do not break down, persisting in the environment and the human body, and exposure has been linked to a number of health problems, including certain cancers, infertility, and obesity.
Even many chemicals once thought to be safe have now been found to be hazardous to people and the environment. For instance, a recent study revealed that certain polymers used as flame retardants, once thought too large to migrate from products into the human body, can actually degrade into smaller toxic particles. Scientists detected these smaller molecules in soil, air, and dust, where they can be easily absorbed by humans and wildlife and cause serious health problems. Testing in zebrafish showed a potential link to mitochondrial dysfunction and developmental and cardiovascular harm.
In light of these risks, governments are taking action. Last year, the US Environmental Protection Agency (EPA) took steps to remove PFAS from drinking water, while the European Union (EU) is currently seeking to ban the use of PFAS in consumer products. The EU also recently tightened its air quality standards, cutting the allowed annual limit value for fine particulate matter, the main air pollutant, by more than half.
The private sector also has an important role to play. At Domini, we have always sought to invest in companies that take a proactive and thoughtful approach to chemical management and pollution control. We have generally avoided investment in major producers of synthetic pesticides and agricultural chemicals, and in our research we positively consider company initiatives to reduce the use of toxic chemicals in favor of safer alternatives, such as non-petrochemical feedstocks.
Because of the persistence of forever chemicals, it is essential that significant efforts be made to phase out their use as quickly as possible, and we actively seek to invest in companies with proven commitments. Many companies are beginning to transition their use of such chemicals due in part to regulation and litigation risks, but also because of growing demand from their customers and investors to find safer, more sustainable alternatives. Frameworks like the Portfolio Sustainability Assessment (PSA), developed by the World Business Council for Sustainable Development, can help companies evaluate their product portfolios, develop sustainable transition strategies, and communicate progress to stakeholders.
Still, further clarity is often needed to more effectively evaluate how companies transitioning their use of toxic chemicals assess and define the “sustainability” of alternatives. Through engagements as part of the Investor Initiative on Hazardous Chemicals, supported by ChemSec, we encourage companies to provide greater transparency; we seek disclosure of the percentage of sales or products that include hazardous chemicals, whether they have commitments or targets to phase out usage of hazardous chemicals, and details on efforts to invest in non-toxic, sustainable alternatives. We also encourage collaboration between suppliers, manufacturers, which can allow companies to better respond to consumer demands and help industries move forward on a clear pathway together.
In some industries, alternatives for hazardous chemicals have already been identified, so the transition will be easier. In others, it will be more challenging. Many products rely on toxic chemicals that provide unique characteristics—such as water resistance, strong adhesiveness, or the ability to withstand wear and tear—and these may be harder to substitute. Some companies may also face longer regulatory approval timelines for changing their production processes. Greater clarity on these challenges can help stakeholders better understand the risks and priorities for companies’ transition strategies. We will keep encouraging companies in the Domini Funds to evaluate their use of forever chemicals and communicate transparently, so that we can continue to support their phase out and ensure a cleaner, safer future for people and the planet.