While challenges remain, our engagement increasingly takes place in a context where sector practices are improving and where a growing number of chemical companies is improving transparency, strengthening chemical management systems and increasing investment in safer alternatives. This broader shift illustrates that companies have become more willing to engage in substantive discussions on hazardous chemicals, even where disclosure or commitments are still evolving.

Agenda 2025

Building on earlier engagement cycles, our dialogue in 2025 focused on four core tasks:

  1. Improving transparency by disclosing revenues and production volumes linked to hazardous chemicals across global operations;
  2. Developing and publishing time-bound action plans to eliminate persistent chemicals, supported by measurable KPIs;
  3. Reducing the production and use of hazardous chemicals through clear strategies and milestones;
  4. Increasing the share of revenue generated from safer solutions by setting a 2030 target and publishing a credible delivery plan.

Collaborative engagement

In December 2021, we joined the Investor Initiative on Hazardous Chemicals (IIHC), a collaborative investor effort representing over USD 23 trillion in assets under management or advice aimed at reducing the adverse impacts of hazardous chemicals and encouraging companies to transition toward safer alternatives. Through this initiative, we engage with chemical companies in collaboration with the non-profit organisation ChemSec, which provides independent analysis through its annual ChemScore assessment. The publication of the ChemScore Report each year marks the start of our engagement cycle.

In our previous articles, Phasing Out Hazardous Chemicals (2022) and Phasing Out PFAS (2024), Action against PFAS (2025) we outlined our approach to investing in chemical companies and shared notable engagement stories.

Company engagement highlights

 

Shin-Etsu Chemical

In 2025, we acted as lead investor in the engagement with Shin-Etsu Chemical, a Japanese chemical company best known for producing materials used in semiconductors, construction and electronics, including silicone products and polyvinyl chloride. Although we meanwhile divested from the company for reasons unrelated to this engagement programme and will therefore discontinue our engagement in 2026, discussions during the year focused on chemical safety, regulatory readiness and transparency. In particular, we discussed the company’s ChemScore results, its approach to substances that may pose risks to people or the environment, and how these are managed in practice.

Discussion outcome

Shin-Etsu confirmed that its ChemScore assessment was discussed at senior management level, including with the Chief Executive Officer, and emphasised that compliance with regulations is the main driver of its chemical management approach. The company explained that some regulated substances are used only as intermediate materials during production and are strictly controlled so they do not end up in final products or the environment. Shin-Etsu also highlighted ongoing research into alternatives and expressed willingness to improve disclosure, although it does not currently publish information on revenues or production volumes linked to hazardous chemicals.

Evonik

In 2025, we participated as a supporting investor in the engagement with Evonik, a German  specialty chemicals company globally active in supplying ingredients and materials to sectors such as consumer care, food and nutrition, automotive, construction and healthcare. Discussions focused on transparency, the management and gradual reduction of hazardous and persistent chemicals and the company’s response to its ChemScore assessment. Evonik acknowledged growing investor expectations for clearer disclosure and confirmed that it is reviewing how to improve reporting on hazardous chemicals, although it noted challenges related to data collection and commercial sensitivity.

Discussion outcome

The company explained that its exposure to these substances is limited and mainly related to controlled industrial processes rather than consumer products and stated that it expects to exit most activities involving fluorinated chemicals within the next two to three years. Evonik also described its internal system for identifying and prioritising hazardous substances and confirmed that the ChemScore results are discussed at board level and with investor relations. While the company showed openness to continued dialogue and further disclosure, it has not yet committed to publishing detailed revenue or volume data for hazardous chemicals.

AkzoNobel

In 2025, we participated as a supporting investor in engagement with AkzoNobel, a Netherlands- based, globally active paints and coatings company whose products are used in buildings, infrastructure, vehicles and industrial applications. Engagement focused on transparency, the use and reduction of hazardous chemicals and on how the company reflects these topics in its sustainability and regulatory reporting. AkzoNobel confirmed that it has completed a formal assessment to identify its most important sustainability risks and impacts, and that hazardous substances were identified as a key topic. The company has begun reporting the volumes of certain hazardous chemicals used, although it has not yet disclosed related revenues.

Discussion outcome

AkzoNobel stated that it does not manufacture fluorinated chemicals and that their use is limited to specific manufacturing processes. However, these substances were not considered material under the company’s assessment, a point we challenged during our discussions. The company described ongoing efforts to develop safer alternatives and reduce the use of hazardous substances, while also noting that progress depends in part on customer acceptance and the availability of alternatives. Clearer disclosure on revenues linked to hazardous chemicals and a more transparent inventory of fluorinated substances remain important topics for future engagement.

Looking ahead

While the pace and depth of progress differ across companies, our engagement in 2025 has confirmed that hazardous chemicals are increasingly recognised as a material topic and are receiving greater management attention. As sector practices continue to evolve and regulatory expectations increase, our future engagement as part of the IIHC will continue to focus on closing remaining disclosure gaps, encouraging time-bound phase-out strategies and testing the credibility of company pathways toward safer chemical portfolios.

Active stewardship

Stewardship is an integral part of our investment management process, with engagement, voting and advocacy as the key pillars. Find out more about our Stewardship activities.