In 1975, California implemented a law requiring that foam used in furniture be treated with chemicals to prevent the product from catching fire if placed in an open flame for 12 seconds. Across the United States, furniture manufacturers responded by adding flame retardants to their products.

More recently, however, the effectiveness of these fire retardants in reducing household fires has come under question, and scientific studies now indicate links between certain flame retardants and decreased fertility, lower infant birth weight, and deficits in physical and mental development in young children.

Fast-forward 38 years, and California’s standard for furniture flammability is being rewritten—part of a broader change in societal views globally on the risks and benefits of chemicals. For the past several years, activists groups such as the Center for Environmental Health, the Environmental Working Group, and the Green Science Policy Institute have been raising consumer awareness and creating successful campaigns to change business practices and laws.

Consider several examples across industries:

The number of chemical regulations is also on the rise, with recently passed laws in California and Washington, and increasing numbers of chemicals covered under Europe’s REACH regulation.

Given the growing market demands, regulations, and reputational risks, there is a need for companies to understand the impacts of chemical use on society and business and proactively manage their use in products and supply chains.

Impacts on Society

Proponents of better chemical management highlight a variety of social and environmental impacts that some chemicals can have—on consumers, workers, communities, and the environment. For consumers, there is growing awareness of the “body burden” of chemicals found within each of us. This is of particular concern for the young, as developing infants and children are more susceptible to chemical exposures than adults. In addition, persistent, bioaccumulative, and toxic substances (PBTs) remain in the environment once released, and they disperse across the globe with the wind and ocean currents. Because PBTs degrade very slowly, they accumulate in animals and humans and can cause negative health effects.

In the supply chain, many workers dealing with hazardous chemicals face health risks due to a lack of proper protective equipment. In addition, because wastewater treatment plants in developing countries are often inadequate or overtaxed, pollutants are released into lakes and rivers surrounding factories, with negative impacts on local communities. According to a UN report, between 300 and 500 million tons of heavy metals, solvents, toxic sludge, and other wastes are released into water bodies each year. The pollution of waterways in China, for example, is well known, and industrial effluents are a significant source of this pollution. This has a direct effect on human health, not just in China but in manufacturing regions around the world.

Impact on Business

Societal concerns drive consumer, government, and activist attention to chemical use, affecting business through increased costs and diminished reputation for targeted industries.

Proactive chemical management can help companies avoid recalls—such as those associated with lead in children’s toys—or changes in consumer purchasing habits, such as when consumers became aware of BPA use in water bottles. Proactive chemical management can also reduce compliance costs, especially as more countries seek to regulate chemicals in products. For example, Seagate is able to keep compliance costs from rising—in the face of an increasing number of regulatory and customer requests—by requiring suppliers to fully disclose products’ chemical content. 

When it comes to a company’s reputation, there are both risks and opportunities associated with chemical use. On the risk side, activist campaigns draw attention to gaps in chemical management in products and in supply chains, potentially tarnishing corporate brands. This is certainly the case for the high-profile campaign Greenpeace has run against the apparel industry. On the opportunity side, companies can enhance their reputations and build consumer trust by proactively addressing customer concerns. For example, Method successfully entered the competitive consumer packaged goods market with new approaches to packaging design and the use of safer chemicals in its products’ ingredients.

As was California’s experience with flame retardants, a combination of activist attention, consumer awareness, regulatory movement, and corporate leadership is making proactive assessment and management of chemical use an essential part of companies’ sustainability programs. Science-based assessment of chemical impacts, along with an understanding of chemical use in products and manufacturing processes, will help companies address current societal concerns as well as anticipate future ones.