AHC Group

Financial risks and opportunities from toxic chemicals in products

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Courtesy of AHC Group

In this article, the author discusses how social response product development (or SRPD) is an essential strategy for avoiding the risks from toxic chemicals in products and seizing the opportunities that arise from developing safer alternatives.

In World Inc., Bruce Piasecki focuses on Social Response Product Development (SRPD) as the core element of the Social Response Capitalism that is critical for sustainable corporate profitability in the 21st Century. The benefits Dr. Piasecki attributes to this business approach include:

  • Margin improvement
  • Rapid cycle time
  • Global market access
  • Product differentiation
  • Social bundling of value in products, and
  • Reducing the risk premium of the firm

Social response product development is an essential strategy for avoiding the risks from toxic chemicals in products and seizing the opportunities that arise from developing safer alternatives.

EMERGING SCIENCE, GROWING CONCERN

In July 2005, The Wall Street Journal published a front-page story captioned 'Common Industrial Chemicals in Tiny Doses Raise Health Issue'; and the next month, USA Today published a lengthy feature story entitled 'Are Our Products Our Enemy?' These two articles represent the tip of an iceberg of growing scientific concern about the impact on human health of relatively small amounts of chemicals in everyday products. Researchers are increasingly detecting scores of these substances in human blood, breast milk, and amniotic fluid, and scientists are increasingly recognizing the particular vulnerability of fetuses and young children to them.

As a result of emerging science, concern is growing about toxic exposures. Scientists historically have been fond of saying that 'the dose makes the poison,' but they are increasingly recognizing instead that 'the dose and the timing make the poison.' The human fetus undergoes a dramatic transformation during its nine months in the womb, developing a brain and nervous system, reproductive organs, an immune system, and myriad other systems and parts. The entire process is driven by minute amounts of chemicals delivering developmental messages at just the right place and just the right time. It doesn't take much of a foreign chemical at the wrong place at the wrong time to foul up the process, potentially causing learning and developmental disabilities, organ damage, and possibly increased susceptibility to health problems later in life.

The exquisite sensitivity of fetal development to toxic intruders has been summarized by biologist Dr. Sandra Steingraber this way: 'Exposures that produce only transient effects in adult brains can lay waste to fetal ones.' Likewise, a newspaper advertisement organized by faculty at the Center for Children's Health and the Environment at Mount Sinai School of Medicine in New York City is captioned: 'Johnny can't read, sit still, or stop hitting the neighbor's kid. Why? Toxic chemicals can cause learning disabilities.' Still other scientists, noting trends and relationships between testicular cancer, undescended testicles, a birth defect called hypospadias (where the penis opens along its length, not at the end of its shaft), and lowered sperm quality, have pointed to exposures to toxic chemicals as a possible underlying cause for this group of health effects that they label 'testicular dysgenesis syndrome.'

The growth of scientific interest in exposures to common chemicals is illustrated by the recent exponential surge in studies of brominated flame retardants. Some of these are linked in animal studies to immune suppression, cancer, hormone disruption, and neurobehavioral and developmental effects. Levels in humans are now close to the levels shown to have undesirable health effects in animals. Based on such research, some brominated flame retardants (penta- and octa-brominated diphenyl ether) have been outlawed in the European Union, California and other states, and are outlawed in a multitude of private and public sector environmentally preferable purchasing programs.

THE CHALLENGE TO BUSINESS

Chemical restrictions can have significant economic consequences and force a number of business choices. For example, a company whose products include these flame retardants (which are used in a wide range of consumer products such as computers, mattresses, foam, and textiles), must either reformulate, or exit the 457-million-person marketplace of the European Union as well as lose access to the world's eighth largest economy in California. Loss of access to major markets is likely to have material negative effects on shareholder value for companies that face these 'toxic lockouts.'

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