Investors’ toxic footprints revealed

Planet Tracker’s latest report exposes the biggest financial backers behind petrochemical toxicity in the US Gulf States, setting clear targets for investors to combat the unfolding health crisis

LONDON, 12 July 2022: The products we use every day – from plastics and synthetic rubber to detergents and dyes – hide a dangerous secret: their production results in the release of pollutants that are highly toxic and impact on human health, including arsenic and asbestos. And troublingly, as Planet Tracker’s latest report, Toxic Footprints, reveals, this is a reality often overlooked by investors.

Using data provided by the US Environmental Protection Agency (EPA), the report reveals the effects of these pollutants and, most importantly, the facilities responsible for their emission as well as the financial institutions funding the industry.

According to Planet Tracker, financial markets are playing a significant role in backing this hazardous industry. The research aims to remove the often relied upon smokescreen of ‘not knowing’ about the impact that pollution has on the local communities and demands that investors take meaningful action to urgently reduce the risks.

The analysis is focused on the petrochemical and refining industries in the US Gulf of Mexico, which combined, account for more than a quarter of the country’s total petrochemical facilities.

With over 7,400 financial institutions, led by Vanguard, BlackRock and Berkshire Hathaway,  currently contributing to petrochemical plants in these US Gulf States through equity, debt or financing, there is an imperative for investors to pressure the facilities responsible for these toxic footprints to change the way they operate. But currently, fines for toxin violations are not significant enough to materially impact operators or investors. A tightening of regulatory standards could dramatically change this.

By revealing the most serious offenders in the industry –five facilities owned by Olin Corp., Covestro,  Valero Energy and BASF account for 75% of total releases in the region – this report, together with Planet Tracker’s accompanying interactive data dashboard, serves as a toolkit for investors to understand the devastating impact of the industry.

Planet Tracker’s findings are presented in two dashboards, covering 6,522 equity investors, 225 facilities, 89 facility owners, 76 corporates and 211 chemicals emitted by these facilities across two states, Texas and Louisiana. The first shows a detailed list of the top toxic polluters and their investors, while the second provides more detail on the facilities and locations that are linked to specific investors.

John Willis, Director of Research at Planet Tracker, comments: “Currently, not enough people investing in, or running, petrochemical facilities are taking action. As an absolute minimum, investors have a duty to be cognisant of the risks of toxic pollutants to local communities and the wider environment. This is part of investment due diligence. They should be pivoting their portfolios away from the damaging impacts of the petrochemical facilities they fund, by pressuring companies to enact change”.

With approximately 1.3 million US workers at risk of fatal asbestos exposure, and Louisiana’s main petrochemical corridor nicknamed ‘Cancer Alley’ as a result of its higher-than-average cancer risk to inhabitants, the time to act is now. And on a purely financial level – investors must recognise the risk associated with these investments, especially if regulatory and legal interventions force the closure and stranding of these investments moving forward.

The report calls on investors to ask:

• Are they aware of their investment or financing exposure to individual petrochemical facilities?
• Have they examined the toxic footprint of each facility?
• Do the companies that own these plants share pollution data with investors?
• Does the management team operate these facilities in the safest way using up to date emission technologies – e.g. discuss permit breaches or provide pollution transparency?

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ABOUT PLANET TRACKER

Planet Tracker is an award-winning non-profit financial think tank aligning capital markets with planetary boundaries. Created with the vision of a financial system that is fully aligned with a net zero, resilient, nature positive and just economy well before 2050, Planet Tracker generates breakthrough analytics that reveal both the role of capital markets in the degradation of our ecosystem and show the opportunities of transitioning to a zero-carbon, nature positive economy.

 ABOUT PLASTICS TRACKER

The goal of Plastics Tracker is to stem the flow of environmentally damaging plastics and related-products that are creating global waste and health issues by transparently mapping capital flows and influence in the sector starting from resins production through to product-use. By illuminating risks related to natural capital degradation and depletion, investors, lenders and corporate interests across the economy will be enabled to create more sustainable plastics products.

Media contact

Ophelia Jeffrey

Aspectus Group

ophelia.jeffrey@aspectusgroup.com

+44 7584657646