In our daily lives we are constantly exposed to a large number of chemicals, affecting us and our health – without us even realising it.  These chemicals stem from a broad-range of products we use every day; plastic food containers, shower curtains, sunscreens, pesticides, furniture, toys, cosmetics and even the cash receipts or lottery tickets we handle.

This daily danger comes with a difficult name – endocrine disruptor chemicals (EDCs) – or substances that interfere with the hormonal communication between our cells. EDCs are linked to human reproductive abnormalities, immune disorders, cancer and obesity and obesity-related illnesses such as diabetes. Babies, children and adolescents – humans in a stage of quick development and growth – are considered to be most at risk from EDCs, as early exposure to EDCs may lead to illness in adulthood.[1]

Bisphenol A (BPA) is an EDC and is one of the most common and widely manufactured chemicals in the world. It has “feminizing” or “oestrogen-mimicking” properties on the human and can be harmful to reproduction even at low levels of exposure.BPA is linked to a wide variety of health problems, such as birth defects, obesity, cancers and fertility problems, as well as early puberty in girls. BPA can be found in many common goods such as plastics, food and drink containers, toys and computers.[2] BPA-based plastics are clear, sturdy and cheap to manufacture and easy to use – and therefore attractive for business.[3] Most food cans are lined with plastic containing BPA that can leach into the food. In thermal paper, such as in cash receipts, BPA is a powdery substance on the surface and can easily be absorbed by the skin.[4] A large study by French scientists have shown how BPA is easily absorbed through the skin from thermal paper[5] and it advised expecting mothers to avoid handling thermal paper and cashiers to wash their hands regularly during the working day.[6]

Parabens are also EDCs used mainly in personal care products and in cosmetics.  They are used as preservatives in cosmetics because of their antimicrobial properties. Exposure to parabens is linked to various birth defects, infertility and cancer. [7]

Phthalates are another group of EDCs that are used as softeners for plastics in flooring, toys, clothes, paints and furniture just to name a few. Phthalates are not chemically bound to plastics and can easily migrate into air, water, dust and humans, with negative effects on reproduction and metabolism.[8]

We are completely surrounded by these substances and over 90% of the US population[9] test positive for BPA.[10]The potential cost to society in terms of future negative health effects is therefore significant, with the potential negative health effects manifesting themselves only years after exposure, adding to the challenges of EDC research and analysis. The World Health Organisation (WHO) warned in a 2012 report that endocrine disruptors constitute a global threat.[11] An EU funded report from June 2014 estimates that EDCs contribute to or were responsible of at least 2-5% of the illnesses that have been attributed to EDC exposure.[12] This means EDCs would be directly responsible for c. $41bn in health costs and lost productivity every year in the European Union, with diabetes and autism being by far the largest cost burdens.[13] However, policy makers have been remarkably slow in reacting to this threat, focusing on analysing huge amounts of research in this space, instead of taking a precautionary stance – which should be expected when serious negative human health issues are at stake.

One of the reasons for the slow progress – and the source of much of the scientific controversy – is the “low dose effect” of EDCs. For many hazardous chemicals, there are regulations in place stating the maximum levels of exposure that can be tolerated without serious damage to human health. This regulatory approach has been questioned for EDCs, as tests on pregnant animals have shown that e.g. BPA produces developmental problems and adulthood illnesses even at doses well below the government’s safety cut-off levels, the “low dose effect”. EDCs seem to behave differently from most other toxic substances, perhaps because our bodies’ respond so easily to natural hormones, such as oestrogens. The US National Institute of Environmental Health Sciences (NIEHS) is one organisation working to bridge the gap between the regulatory studies and research into low dose effects. The NIEHS is currently funding work carried out in the way regulatory studies are normally conducted but covering a much broader dose range than is traditionally looked at in regulatory studies. Some scientists believe – and hope – that the legacy of BPA might be that low dose effects will be considered for all chemicals and not just for BPA and EDCs in future regulatory safety processes.[14]

Regulatory progress has taken place, however, with Canada, Europe, Australia and several states in the US banning BPA in infant feeding bottles in the last few years. France banned all BPA-products affecting pregnant women and children under the age of three in 2013 and has set an expanded ban on any BPA that comes into contact with food from 2015.[15] While regulatory progress is slow, the direction of travel seems clear – regulation on endocrine disruptors is likely to be tightened over time. The EU is legally obliged to set uniform safety classifications and criteria on EDCs. This is likely to be finalised sometime in 2015.  A decision is crucial, as the EU with its REACH-regulations[16] has been the leading global authority in regulating toxic substances. Many Asian countries have been fully or partly following the developments of EU REACH-regulations in their national chemical regulations.[17]

The US Food and Drug Administration, on the other hand, has been a laggard to date. The challenges and risks in the process for EDC regulatory classification in the EU are two-fold; firstly, there is fierce resistance by the large chemical and pesticide producers such as Bayer, BASF and Monsanto and secondly, the Transatlantic Trade and Investment Partnership (TTIP) being negotiated between the EU and the US and aiming to remove trade barriers between these two, by harmonising technical regulations, standards and approval procedures.[18] These two aspects could threaten the EU’s traditional precautionary approach to health and environmental issues.[19]

While regulators are dragging their feet, consumers increasingly want to know what is in their daily products and food —and are demanding healthier and cleaner alternatives. The continued strong growth of organic food can be viewed as evidence for this trend. US organic food production has increased by about 240% between 2002 and 2011, compared with 3% growth in the non-organic food market.  The US organic food market is expected to continue growing at roughly 14% per year to 2018, much faster than the overall food market.[20] For individual companies this growth can be even more dramatic. For example, food maker General Mills, which announced plans this month to purchase organic food brand Annie’s Homegrown for $820 million, reported that its organic and healthy food lines grew by 35% in 2013compared to 2% growth for its non-organic lines.[21] Some companies have been first movers in responding to these healthier opportunities and have successfully developed substitutes to EDC substances or are diversifying their product offerings away from EDCs.

For instance, the chemical giant Eastman Chemical has developed a business strategy that aims to capitalize on the demand for non-toxic chemicals. Eastman has increased its production of non-phthalate plasticizers, such as Benzoflex, Eastman TXIB, as well as Eastman 168, which is used as an alternative to DEHP-based products, a substance on the EU REACH Authorization List[22]. The company states that it has 10 non-phthalate plasticizer facilities and has further increased production by 60% following a retrofit. The company said it planned to increase production capacity of Eastman 168 non-phthalate plasticizer by an additional 15% by mid-2014. In 2013, the volume of Eastman 168 plasticizer sales grew by 25% or three times faster than its traditional plasticizer sales, indicative of strong growth of this market segment.[23]

Another interesting example is Eden Foods, another US organic food concern, which became alarmed by the toxicity of BPA in cans and food packaging long before the issue made it to mainstream news. In 1999, it asked its packaging supplier, Ball Corp, to develop a BPA-free can. The cost was 14% higher for the BPA-free cans in 1999; as of 2012 it is 30% more expensive than BPA-containing cans. Even so, Eden Foods has always been able to pass on the more expensive packaging costs to consumers, without suffering decreases in demand, again pointing to the strong underlying demand for healthier alternatives.[24]

Even in non-consumer-facing sectors there are companies moving away from EDCs. For example, the Finnish water treatment company, Kemira, decided to phase-out all EDC substances from their water treatment substance portfolios, in anticipation of tightening regulation regarding EDCs.[25]

There is a strong sense of déjà vu in this debate. As with actions to mitigate climate change, or reduce air pollution in our cities or demands for properly labelling GMOs in our foods, it seems that consumers would want to have much more information and transparency, but also strong policy action in order to achieve healthier and more sustainable lives.  However – largely due to industry standing in the way – policy action is often painfully slow. This same dynamic applies to the slow pace in progress for regulating endocrine disruptor substances. It is therefore this disconnect in demand and supply of sustainable action that creates a great opportunity for forward-looking businesses who can see past the entanglements to greener fields ahead.

The author would like to thank Sweden-based NGO ChemSec for providing outstanding information around EDCs and chemical safety more generally. Any potential errors or omissions are however those of the author.

Lisa Beauvilain is the Head of Sustainability & ESG at Impax Asset Management. She is responsible for environmental policy and legislation investment research and non-financial ESG analysis.
 
 
[1] http://www.chemsec.org/images/stories/2011/chemsec/What_are_endocrine_disrupting_chemicals.pdf
[2] http://www.chemsec.org/images/stories/2011/chemsec/In_Focus_Bisphenol_A.pdf
[3] http://www.rsc.org/chemistryworld/2012/11/bpa-bisphenol
[4] http://www.chemsec.org/images/stories/2011/chemsec/In_Focus_Bisphenol_A.pdf
[5] The study found that c. 46% of the BPA in thermal paper was diffused through the skin.
[6] http://www.nature.com/news/2010/101104/full/news.2010.581.html
[7] http://www.chemsec.org/images/stories/2011/chemsec/In_focus_Parabens.pdf
[8] http://www.chemsec.org/images/stories/2011/chemsec/In_focus_Phthalates_2.pdf
[9]BPA was detected in 92.6% of persons ≥ 6 years of age.
[10]Calafat AM, Ye X, Wong LY, Reidy JA, Needham LL (2008). “Exposure of the U.S. population to bisphenol A and 4-tertiary-octylphenol: 2003–2004”. Environ. Health Perspect. 116 (1): 39–44.
[11] http://www.euractiv.com/sections/sustainable-dev/eu-seeks-uniform-regulation-hormonally-active-substances-303306
[12] This is based on a pioneering US scientific paper that estimated that BPA exposure in food contact materials may be responsible for 1.8% of child obesity and almost 39,000 cases of new incident coronary disease in the US, with an associated cost of $2.98bn. The EU report includes infertility, cancers, ADHD, autism, obesity and diabetes as endocrine-related diseases or conditions.
[13] Health and Environment Alliance (HEAL), June 2014: http://www.envhealth.org/IMG/pdf/18062014_final_health_costs_in_the_european_union_how_much_is_realted_to_edcs.pdf
[14] http://www.rsc.org/chemistryworld/2012/11/bpa-bisphenol
[15] MSCI ESG Research, Industry Report: Containers & Packaging, November 2013
[16] REACH = Registration, Evaluation, Authorisation & restriction of Chemicals
[17] Notably Japan and South Korea.
[18] http://ec.europa.eu/trade/policy/in-focus/ttip/about-ttip/
[19] Discussion with Anne-Sofie Andersson, Director at ChemSec, August 2014
[20] http://www.foodnavigator-usa.com/Markets/US-organic-food-market-to-grow-14-from-2013-18
[21] Discussion with MSCI ESG analysts, August 2014
[22]The REACH authorisation procedure aims to assure that the risks from Substances of Very High Concern are properly controlled and that these substances are progressively replaced by suitable alternatives while ensuring the good functioning of the EU internal market. (ECHA, European Chemicals Agency).
[23] MSCI ESG IVA Analysis of Eastman Chemical Company, June 2014, discussion with MSCI ESG analyst Cyrus Loftipour, August 2014
[24] http://www.edenfoods.com/articles/view.php?articles_id=178
[25] Discussion with Kemira IR Tero Huovinen and the Director of Sustainability Riikka Timonen, March 2014.