Environmental think tank Planet Tracker has urged investors to call for the standardisation of chemical industry regulations between the EU and US to combat regulatory and litigation risks. In a recent report, Planet Tracker said that inconsistencies between the EU and US chemicals-focused reporting regimes makes it difficult to assess or compare company footprints, creating risks for corporates and financiers. The report highlighted that the EU uses a hazard-based approach to regulation while the US opts for a risk-based approach, which the report argued has the potential to “materially impact” future litigation risk. “For investors, we believe greater transparency is a critical request to make of both regulators and corporates, irrespective of the geography of operation and reporting,” the report read, adding that transparency should be an “increasingly urgent ask” of chemical industry corporates given the rising litigation risks. “Investors must push for transparency and advocate for a robust standardised regulatory framework to protect themselves,” said Richard Wielechowski, Senior Investment Analyst at Planet Tracker. “While producers may favour markets with a lower regulatory burden, they risk losing access to higher-regulated markets and could face litigation challenges. Standardisation benefits both environmental responsibility and financial stability.”
☣️Why are toxic chemicals reported in one region but not another? And what does this mean for investors? Our latest analysis compares the U.S. risk-based model and EU hazard-based model for toxic chemical reporting. Learn more: https://t.co/BUVE5Ywrvk pic.twitter.com/28qogmaY0i
— Planet Tracker (@planet_tracker) December 5, 2024
