The SIN* List – A t o o l f o r in v e st o r s
Or how to avoid hidden risks of companies producing or using hazardous chemicals
REACH – a new era of chemicals policies Since 2007 the European Union has a new comprehensive regula-
The implementation of REACH, as well as future intensified chemi-
are identified as Substances of Very High Concern. These chemicals
as downstream companies and retailers.
alter DNA, bio-accumulate in bodies and persist for long periods
The public awareness on health and environmental implications
will be listed on the REACH Candidate List, a list of substances that
stance appearing on the REACH Candidate List is used in products
tion on chemicals, REACH. In REACH the most hazardous chemicals can potentially cause cancer, be toxic to the reproduction system,
once spread in the environment. Substances of Very High Concern will be restricted or for which an authorisation by the EU will be required. The number of substances included on the REACH Candidate List will increase in the years to come.
cal regulations1, will greatly effect chemical manufacturers, as well
of hazardous chemicals in consumer products is growing. If a subin concentrations above 0.1 percent, consumers have the right to
know this and may request information from the retailer, who will have a legal obligation to respond to such information request.
1. For example the Toxic Substances Control Act reform in the US.
*Substitute It Now!
Financial consequences Producers and users of Substances of Very High Concern face the
Recalls
risk of restrictions and increased costs associated with reformulat-
30
implications for company performance.
25 23,05
ing products and modifying processes, which can have significant
Hi 29,65
Hi 400,45
400
18,39%
300
20
This implies vast risks for companies with long production cycles. A product that is made today, but put on the market in ten years, could require the use of a substance that by then has been re-
-15,42% 15
Very High Concern in REACH, applications will have to be sub
mitted to EU authorities. Applications will be costly (eg. Base Fee of 50.000 EUR) with no guarantee that an approval will be granted. Product recalls are rising, in United Kingdom there has been a 10 percent increase per annum since 2003.2
271,40 250 200
0
Low 13,51 Low 10,45
2006
stricted through REACH.
For the use of substances listed as Authorisation Substances of
350
2007
2008
2009
–– Mattel Stock Price – Dow Jones Toy Industry index
2010
Source: Bloomberg
E x a m p l e : In 2007 the toy-maker Mattel was forced into large scale recalls following the discovery of lead in its products. As a result Mattel´s share price underperformed the sector by approximately 35 percent in the second half of the year.
At the same time, there are opportunities for winners to seize, in the form of both preparedness and innovation. When substances are restricted, a need will arise for alternative chemicals. The producers and users of these alternatives can gain market shares and
“SRI should always be one step ahead of legislation”
probably out-perform the sector.
”– EuroSif report 2008
The SIN List – staying ahead of REACH The SIN (Substitute It Now!) List includes substances that have
The SIN List shows a clear picture of which chemicals are most
according to REACH criteria. The SIN Database lists these substanc-
years. By doing this, the SIN List gives guidance to businesses that
been identified by ChemSec as Substances of Very High Concern es with names and CAS numbers, and also states health effects,
risk phases, technical functions of the substances and in what kind of products they are used.
likely to be included on the REACH Candidate List in the coming
have to substitute hazardous chemicals today in order to avoid to get caught by regulatory restrictions in the future.
2. Henderson, SRI briefing report Feb 2009, “Chemical safety in consumer products industries”
The SIN list identifies high concern chemicals through the combined efforts of scientists, technical experts and leading international NGOs. Toxicological, eco-
toxicological effects, bio-monitoring and epidemiological studies, as well as databases on use patterns (e.g. if
a substance is present in consumer products, etc), have been used in the selection of substances.
“There will be a steady and substantial increase of substances of very high concern on the candidate list over the coming years. Initiatives taken by stakeholders, like the SIN list, that draw the attention of the public and industry to the most hazardous chemicals that should be a priority for substitution are important to drive the process forward”. ”– Stavros Dimas, former European Union Commissioner for the Environment
The SIN List – widely used and referenced Since the launch in 2008 the SIN List has been acknowledged by a diversity of stakeholders. The SIN List is today considered a stand ard tool for identifying high concern chemicals and an important point of reference. The SIN List is for example:
• Influencing the official Candidate List, as six EU Member States have suggested a pre-list to the Candidate List, with a 90 percent correspondence with the SIN List. • Used by the US-based investment research firm RiskMetrics/ MSCI to help investors understand how the market will develop as a response to REACH, as presented in the report “REACH: Strategic Risks and Opportunities”.
“A key value of the SIN List here is that it provides companies, be they Substance of Very High Concern (SVHC) producers or SVHC users or alternatives providers, a peek into the future.” – Noran Eid, RiskMetrics/MSCI
• Used as a reference in the development of a new chemicals regulation in California, US, in the “Safer Alternatives for Consumer Products” Rule. • Used by leading European companies as a communication tool towards suppliers, and as guidance in internal product development processes. Examples of companies using or referring to the SIN List are B&Q, Boots UK Limited, Carrefour, Dell, L’Oreal, Skanska, Sara Lee and Sony Mobile. • Recommended by the Nordic Council to be used in public procurement as criteria to avoid hazardous substances in the Nordic countries. • Used to identify and proactively manage “emerging contaminants” by the US. Department of Defense’s Chemical and Material Risk Management Program. • Used by the Korea Institute of Science and Technology Europe, KIST, to inform Korean companies on how to stay ahead of REACH.
“The SIN list is a prime source of information about substances of concern that B&Q will use to ensure that it protects its customers, employees and the environment. In addition, it will provide an early warning system for substances that are likely to appear on the official REACH ‘candidate list’, enabling B&Q to move towards elimination/ substitution of these chemicals in advance of legislation.” – Roy Miller, Chemicals Advisor, B&Q Social Responsibility. B&Q is the third largest home improvement retailer in the world and part of Kingfisher.
ChemSec – the organisation behind the SIN List ChemSec is a non-profit organisation bridging the gap between policy-makers, business, NGOs and science. As an NGO working in close relation to downstream companies, ChemSec works to find concrete solutions and improve toxic use reduction through legislative processes as well as business initiatives. Know more • •
For more information on the SIN List, please visit www.sinlist.org, where also the SIN List Database is found. For more information on the SIN List as a tool for the investment sector, contact Sonja Haider, business and investment advisor. E-mail sonja@chemsec.org or phone +49 89 810 59 380.
P.O. Box 7005, SE-402 31 Göteborg, Sweden Phone: +46(0)31 711 04 95 E-mail: info@chemsec.org www.chemsec.org
www.sinlist.org
2013-04-08
ChemSec – the International Chemical Secretariat