New Report Warns Investors to Act Now on Chemical Transparency
Safer Chemistry Impact Fund releases first comparative analysis of hazard disclosure tools amid growing portfolio risk
WASHINGTON, D.C. — A first-of-its-kind report released today warns that chemical hazards in corporate supply chains are becoming a serious—and largely unmeasured—financial threat to investors. The 21-page study reveals that most companies still fail to disclose the full extent of toxic chemicals in their products, leaving portfolios vulnerable to lawsuits, reputational damage, and regulatory shocks.
The report, Addressing the Portfolio Risk of Chemical Hazards: Guidance for Investors, compares leading tools that investors can use to evaluate chemical risks, similar to the evolution of carbon disclosure metrics, and outlines concrete steps the financial sector must take to avoid potential losses from undisclosed chemical hazards in supply chains.
“We’re at a tipping point,” said Bill Walsh, Fund Director of the Safer Chemistry Impact Fund (SCI Fund.) “Chemical hazard disclosure is no longer a niche concern for social impact investors—it’s a strategic due diligence requirement for all investors. Without visibility into these risks, investors fly blind in a market increasingly demanding accountability.”
The report includes a comparative analysis of leading tools such as ChemFORWARD’s Ingredient Intelligence Reports, SASB Safety & Environmental Stewardship of Chemicals Reporting, and Clean Production Action’s Chemical Footprint Project—evaluating them based on data quality, verification, their ability to detect unknown hazards, and more.
Key findings include:
"Free of" claims are insufficient. Companies must know and disclose what chemicals are used in products.
Most frameworks ignore information gaps, which can represent significant hidden risks from hazardous chemicals that have not been fully characterized.
Corporate reporting often relies on self-disclosure, masking the true scope of liability. At this time, only one tool is third-party verified, offering a level of rigor investors are seeking.
The report provides examples that the financial impact is already visible:
Lumber Liquidators lost over 70% of its stock value following a toxic chemical scandal.
A consumer watchdog group published peer-reviewed research that received global media attention, highlighting hazardous chemicals in black plastic cooking utensils. Sales of black nylon utensils plummeted over 20% while sales of stainless steel and silicone products soared.
PFAS lawsuits have erased billions in market cap for chemical manufacturers. Now, liability is expanding to brands that simply use these “forever chemicals.”
The report calls on investors to:
Demand verified, comprehensive chemical hazard disclosure from portfolio companies.
Embed chemical risk in investment decision-making and due diligence evaluations.
Engage with companies to eliminate toxic exposures and adopt safer alternatives.
Push financial rating agencies to incorporate chemical risk into their methodologies.
Collaborate across the sector to standardize expectations and drive consistent reporting.
“The stakes are high—but so is the upside,” said Stacy Glass, Advisory Board Member of the Safer Chemistry Impact Fund. “The shift to safer chemistry is already underway. Investors can accelerate it by demanding higher standards, just as they did with climate and carbon. This report gives them the tools to do exactly that.”
The fund invites businesses, investors, and philanthropies to join this collaborative effort and contribute to systematically reducing and eliminating toxic chemical pollution.. Organizations interested in accelerating the transition to safer chemistry are encouraged to visit www.saferchemistryimpactfund.org or contact the Fund Director at info@saferchemistryimpactfund.org.
About the SCI Fund
The SCI Fund, a unique blended capital fund with seed investments from Apple and Google, aims to embed safer chemistry tools and metrics in four consumer-facing supply chains in five years. The collaborative will identify, fund, scale, and measure impact solutions to embed safer chemistry across supply chains as the standard operating system.
