Business Case Analysis for Safer Chemicals

December 9, 2010

The development of chemical industry and wide proliferation of the industrial chemicals, man-made materials, chemicals in household items and substances, and eventually in our food chain supply has been a process that had different phases and different public attitudes to the issue. It started with the Second Industrial Revolution in mid 19-th century, but by mid-20-th century got to such a scale that omnipresence of the chemicals moved from just influencing our way of life (presumably making it better and more comfortable) to posing a very real and tangible threat to the human life itself through unintended consequences, unforeseen developments, industrial accidents.


As for the attitudes to the chemical industry and the externalities produced by it, we can say that they started with  the age of enchantment, when it was mostly lauded for the great scientific breakthroughs and profound advances in enhancing everyday lives of people by providing abundance in food supplies and indulging ever growing appetite for convenience and comfort.

These attitudes of exuberance were replaced with disappointment, frustration and fear when in the second half of the 20-th century very severe unintended consequences of widespread chemicals started to surface. Arguably, one of the most prominent cases could be the use of Agent Orange in Vietnam War. This dioxin-based chemical was not originally designed for warfare, but was the same component that had been widely used in agriculture to fight the weeds. However the dire consequences of its use on the human health in Viet Nam started to surface even during the war. Millions of Vietnamese and thousand of the US service personnel were affected [1]. The chemical was connected to cancer, birth defects, mental disability and other serious diseases. 

For many years the chemical companies had been effective in diffusing the public and government concerns and fending off the sporadic attacks of isolated effected consumers and consumer activists. Mostly it was possible because the evidence presented by those groups had been isolated and inconclusive.

However the continuous collection of data from scientific research, significant part of which had been conducted by chemical companies, coupled with the growing awareness of the general public and specific consumer groups has lead to the significant changes in the balance of powers between the stakeholders of the chemical industry. Of course, in addition to in-depth scientific studies that brought to light the before-unknown connections between the use of the common chemicals and their detrimental effects, there were more and more visible signs of possible negative impact of some of the chemical agents on the environment.

One of the first advances in bringing together the environmentalist movement and the chemicals industry was the establishment of the U.S. Environmental Protection Agency in 1970. [2] The work of the Agency allowed to establish a more rigid and predictable framework for the industry. Also it allowed the chemical industry to work with one designated governmental body at the federal level instead of trying to figure out the work between multiple federal agencies.  During the seventies this Agency was able to promote a few crucial legislative initiatives that had overall  positive effect on environmental clean up of some of the unintended consequences of chemical use.

At the same time these initiatives had effect on the chemical industry at large. One of them was the passing of the Toxic Substances Control Act (TSCA) in 1976. This legislation introduced stringent constraints on production, use and disposal of a few specific chemicals, including lead-based paint, asbestos, radon and others. Even though it had impact on the chemical manufacturers, and imposed significant financial obligations in order to comply with those legal requirements, the overall positive effect on the public health far outweighed the financial cost of compliance. Moreover, taking out from the market dangerous materials and chemicals has prompted the industry to direct research to alternative sources, in order to produce more environmentally sound product for one of its main stakeholders – consumers.

Over the last more than 30 years since the formation of the EPA, there have been many tectonic changes in the makeup of the stakeholder powers around the chemical industry. These changes have been induced by the same general tendencies that formed in the sixties and seventies of the last century: growth of knowledge and growth of consumer awareness.

As of today there are many more organizations that are presenting the general public and consumer groups in their attempt to improve our environment, health and well-being. Many of these organizations raise legitimate issues that can be overlooked by the insiders of the chemical industry due to their vested interests and specific perspectives.

Some of the more active and prominent organizations in this field are:

  • Environmental Defense Fund that leads many programs on federal and local levels in various aspects of the environmental protection. They proclaim on their website as their mission statement: “We partner with businesses, governments and communities to find practical environmental solutions.”  -http://www.edf.org/home.cfm
  • Center for Health, Environment and Justice – http://www.chej.org/
  • Environmental Health Fund – http://environmentalhealthfund.org/
  • Environmental Law & Policy Center – http://elpc.org/

There are many other organizations that cannot be listed here due to space constraints. However the main idea is for the chemical industry to stop seeing these organizations as opponents, but instead as partners and allies in finding practical solutions to the serious environmental challenges we are facing now, in part due to the negative effects of the chemical industry. Therefore the industry should seek cooperation with these organization and not just as a publicity spin, but for real and genuine research, establishing and funding programs aimed at mitigating the threats posed by the industry to the environment. This cooperation could be done on individual company to organization level as well as through the trade group presenting leading companies and businesses in chemistry research and industry – American Chemistry Council.

It seems that the time of playing PR games has already passed for the industry and the evidence of destructive effects, even though unintended, on the environment is overwhelming. The industry should pour more money in developing new non-invasive materials, to replace those whose detrimental qualities have been proven beyond doubt. But for the long run they need to look at the materials whose negative effects are highly-suspected, even if not conclusively proven. This includes many plastics and households substances currently produced. It is only a matter of time when these suspicions will be conclusively confirmed. But if the industry is readying itself for this, they will be able to provide real environmentally sound solutions instead of spinning another PR in order safe faces.

There is evidence that household cleaning supplies can be produced in a manner and from materials that are environmentally-friendly and do not pose health problems for consumers. One of these companies is “Method” which produces such products and promotes environmental cause at the same time. So far they have been able to prove that it can be done profitably too.

The fact that the public and consumer groups become more influential and make their voice heard did not escape the lawmakers. That’s why Frank Lautenberg, the US Senator has announced the overhaul of the TSCA through his legislative initiative “Safe Chemicals Act of 2010”  This is just another evidence that the shift of power is going on right now and there will be mounted more pressure on the chemical industry to change radically some of its long held practices, assumptions, and policies. The chemical industry will do much better in the long run if they make a genuine attempt to go at the head of this change in environmental movement and become the leaders in the process instead of waiting for the government and consumer groups getting on its case and making the chemical industry to comply by catching up with new much more stringent regulations, public outrage and other negative consequences which will eventually effect the bottom line too.

[1] Hush Hush: The Dark Secrets of Scientific Research, 2003. Michael Jordan

[2] http://www.epa.gov/history/timeline/70.htm