Paving the way for chemical responsibility: LBP AM's SRI approach to forever chemicals
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As a member of ChemSec's Investor Initiative on Hazardous Chemicals (IIHC), LBP AM and Tocqueville Finance are committed to working directly with chemical companies to reduce the risk of their portfolios having an impact on people and the environment. On the occasion of the publication of the 2023 edition of the ChemScore report, focus on LBP AM's strategy with regard to forever chemicals.
"PFAS chemicals are the new asbestos". It is with this warning, addressed to the chemical sector by the members of IIHC, that ChemSec shares its 2023 report. In this document, the Swedish NGO driving the change to safer chemicals ranks 50 chemical producers according to their actions in terms of sustainability.
Also known as "forever chemicals", per- and polyfluoroalkyl (PFAS), are so widespread that no territory on the planet is spared from their contamination. Present for almost a century in many everyday objects (paint, carpets, pesticides, packaging, make-up, etc.), these substances, which can have a serious impact on our health, do not break down in nature or in living organisms, where they accumulate. Able to travel far from the areas where they are emitted, they now represent a major public health issue.
This is why it is becoming urgent for investors, like LBP AM, to commit the chemical sector to a transition towards the production of healthier molecules that respect human health and the environment.
LBP AM's strategy for the chemical majors
As a pioneer in SRI, LBP AM is committed to working with companies to change their practices. In this context, the Group identified 19 of the world's leading producers of forever chemicals, based on data analysed by ChemSec.
LBP AM then undertook enhanced due diligence on these companies in order to examine the measures taken to reduce the risk of impact on people and the environment linked to the production and use of forever chemicals, as well as the policies and strategies for remediating the impacts already caused by these products.
As a result of this due diligence, seven companies, the least advanced and showing the least engagement to a total halt in the production offorever chemicals, were excluded. Six companies that had made little progress, but for which improvement seemed possible in the long term, had their SRI rating downgraded and were placed on the watch list. Finally, six other companies with a stronger engagement to stopping the production of forever chemicals or with a clearer remediation strategy were also placed on the watch list. Today, they are the subject of a reinforced engagement, in order to support them in their approach and guide them in their remediation strategy. Some of the companies identified have signed up to the Investor Initiative on Hazardous Chemicals.
Collaborative engagement with the Investor Initiative on Hazardous Chemicals
LBP AM and Tocqueville Finance joined this initiative in November 2023. Spearheaded by ChemSec, the initiative brings together 54 investors with more than $10 trillion in assets under management. LBP AM and Tocqueville have signed a letter sent to 50 of the world's largest producers and users of PFAS, and are engaging four chemical companies to encourage them to plan a gradual phase-out of PFAS and to be more transparent about the management of the risks and impacts associated with the production and use of these chemicals. Collaborative engagement is one of the ways in which LBP AM and Tocqueville can increase their leverage with companies.
Through this approach, LBP AM is working directly with companies to promote more responsible chemistry and reduce the risk of impact on people and the environment associated with its portfolios, in line with its raison d'être: "To enhance the value of financial, natural and human capital and support clients' sustainable transitions".
1 - In French: Initiative des investisseurs sur les produits chimiques dangereux