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Endocrine disruptors in ESG Analysis

Endocrine disruptors, the definition of which has not yet been ratified within the European Union, are chemicals that may affect the normal functioning of the endocrine glands to which humans may be exposed through different channels (WHO, 2012)1. Their main characteristic is that their toxicity is not correlated with their dose (strong effects can be seen at low doses and slight effects at strong doses). This goes against the principle of Paracelsus, the father of toxicology, which asserts that the dose makes the poison.

The best-known examples of these endocrine disruptors are certain Phthalates, Bisphenol A and Parabens, in widespread use in Western countries. People are exposed via food products, packaging, furniture, many consumer goods such as cosmetics and detergents, as well as UV filters, clothing, etc. According to a number of scientific studies, these endocrine disruptor can cause cancers, metabolic diseases (obesity, diabetes), developmental diseases, impaired fertility and neurological diseases.

In order to perform an overview of some corporate practices, we conducted a study on 50 companies operating in the sectors that we consider to be exposed, based on scientific references on the subject.

The main findings show that among the companies reviewed, communication on the topic remains very immature and that there is clearly a gap between sector issues and the responses given.:

  • Companies in the chemicals sector and in cosmetics and detergents, citing the lack of definition at European level, do not communicate on this subject. Some of these companies are in fact accused of aggressive lobbying activities. The precautionary principle is cited, but mostly in negative terms by some chemicals companies, which accuse it of hampering innovation.
  • The retailing sector sees more opportunities and considers that the subject can be used as a lever to encourage some of their suppliers to progress. The sector focuses more on managing reputation and boycott risks in business contexts where it is more exposed, such as in B2C (Business to Consumer).
  • The textile and luxury sectors are greater advocates of the precautionary principle, frequently publishing lists of restrictive substances and issuing special reports.

Observing these practices has given us a better understanding of this theme and will enable us to act and refine on it in the ESG ratings of some of the companies  present in Amundi’s investment universe.

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1 At the time of publication of this study, the European Commission had finally published a definition, more than two years behind schedule.

 

Finalised at 15 January 2016

Marie NAVARRE, ESG Analysis
Aurélie RENARD, ESG Analysis

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