PFAS pollution is no longer just an environmental issue – it has become a hard economic risk. While investors and major chemical corporations such as BASF are distancing themselves from these toxic compounds due to looming lawsuits, Europe is paradoxically considering deregulation. As a result, we risk losing competitiveness at the very moment when the market is demanding safer innovation.
In the United States, PFAS have already become the subject of massive legal battles. Tens of thousands of residents – along with entire towns and states – are suing manufacturers of these “forever chemicals.” At the center of the conflict is contaminated drinking water: local authorities and state governments are suing companies not only for health damage but, above all, for the astronomical costs of cleaning up water sources. The most telling example is the settlement reached by 3M, which committed to paying at least 10 billion USD to U.S. water utilities to remediate PFAS contamination. The total financial liabilities now incurred or projected for PFAS manufacturers amount to roughly 20 billion USD – and analysts expect this figure to rise, especially as the U.S. Environmental Protection Agency (EPA) introduces stricter drinking water limits for PFAS. These legal and financial consequences are not hypothetical; they are a reality reshaping the chemical industry.
Europe is not far behind. The economic impacts of PFAS contamination are no longer a theoretical future threat but a tangible part of today’s landscape. In several heavily affected regions of Belgium, Italy and France, authorities have issued warnings advising pregnant women to avoid tap water entirely and rely solely on bottled water due to PFAS concentrations that exceed safe limits.
Data indicates that Europe has roughly 23,000 sites with PFAS-contaminated water. Around 12.5 million EU citizens live in areas with polluted drinking water. This not only erodes public trust in industry and regulatory oversight but also reveals the immense economic burden ahead. In many cases, remediation of affected areas is extremely costly – and at times even technologically near-impossible.
Polluters Will Finally Have to Pay
Citizens and policymakers are increasingly vocal about the “polluter pays” principle. Taxpayers should not bear the cost of decontamination – the companies responsible should. Moreover, evidence shows that some firms deliberately concealed information about the health and environmental impacts of their products from the public and from regulators. Legal accountability is now shifting from corporate fines to the personal criminal liability of executives.
A major precedent was set recently in Vicenza, Italy, in the case of the Miteni plant. In a first-instance ruling, the court sentenced eleven former managers to a combined 141 years in prison – with individual sentences reaching up to 17 years – and ordered more than 75 million EUR in damages. Nearly 57 million EUR of this goes directly to the Italian Ministry of the Environment as compensation for environmental harm. This liability was extended to parent companies Mitsubishi Corporation and ICIG. The reason: the intentional concealment of PFAS leaks into groundwater, which caused one of the largest environmental disasters in Europe.
Investors understand this new reality well. Companies contributing to the spread of persistent chemicals are increasingly viewed as high-risk assets. Investors are refusing to allocate capital where future lawsuits, regulatory action or enormous remediation costs may arise. This combination of investor pressure and reputational concerns is now one of the key drivers of change.
Major Global Companies Are Divesting from PFAS. This Is No Coincidence
The newly published ChemScore 2025 ranking shows that parts of the materials sector are responding to this trend – often faster than policymakers. After years of research, advocacy and collaboration across civil society, we are witnessing something previously unimaginable: the world’s largest companies are announcing the phase-out of PFAS from their portfolios. This shift did not happen spontaneously. It is the result of years of painstaking work by scientists, alternative material producers, NGOs and local communities. One example is the Stop PFAS Manifesto, supported by more than 130 NGOs and co-founded by the Czech organisation Arnika. These actors pushed consistently in one direction – and the results are now clearly visible.
An analysis by ChemSec, an organisation promoting safer chemical alternatives, found that roughly one-third of the world’s 40 largest chemical manufacturers have publicly declared their intention to phase out “forever chemicals.” The most significant and in many ways groundbreaking example is BASF, the world’s largest chemical conglomerate, which confirmed it will end production of PFAS-based substances and materials by 2028. Similar commitments have been announced by major players such as 3M and Ecolab. American companies performed the worst in the assessment, operating in a regulatory environment with the weakest controls on harmful chemicals. The findings suggest that lax rules undermine competitiveness globally, as modern markets now require higher sustainability standards.
“PFAS pollution is a growing concern among investors with significant long-term implications. Phasing out PFAS and replacing them with safer alternatives is a crucial first step companies must take – not only to protect ecosystems and public health but also to mitigate long-term risks to shareholder value arising from tightening regulations, compliance obligations and potential exposure to litigation,” said Tsitsi Griffiths, Engagement Manager for Investors at EOS at Federated Hermes and member of the Steering Committee of the Investor Initiative on Hazardous Chemicals (IIHC). The IIHC – a group of more than 75 investment firms with over 23 trillion USD in assets under management or advice – has designated the phase-out of PFAS and all persistent chemicals as a key requirement for the chemical industry.
Corporate shifts do not occur in a vacuum. They arise from dialogue between investors, industry and civil society. All stakeholders increasingly recognise that continuing the production of substances linked to widespread pollution and serious health risks is unsustainable – and investors see these chemicals as a financial liability that could erode the value of their portfolios.
Deregulation Is a Trap for Europe’s Competitiveness
In stark contrast to market developments, the current trajectory of European policymaking is concerning. The emerging Clean Industrial Deal prioritises the competitiveness of European industry but proposes to achieve this through a controversial strategy: deregulation. This would mean weakening or removing legislative measures designed to protect EU citizens from toxic substances and pesticides. Such a step would not only be regressive but would come at the worst possible moment, when markets and investors expect more responsibility and transparency, not less. While industry and agriculture may benefit in the short term through cost savings, this approach risks completely misaligning Europe with global market realities.
If Europe truly opts for deregulation, it is highly unlikely to achieve the desired outcome of enhanced competitiveness. European industry could become less attractive to major investors compared to markets betting on innovation. European companies are beginning to understand this dynamic, and ChemScore data shows that some of them are already working to transition their production faster than the political debate in Brussels. From the perspective of long-term stability and prosperity, Europe would be far better served by supporting the development of safer alternatives and phasing out hazardous persistent chemicals rather than reverting to weaker regulatory standards of the past.
PFAS are not a problem that can be postponed, ignored or solved by a simple administrative change. They represent a long-term challenge that will shape the economic health of the entire sector for decades. Europe now faces a defining choice: whether to base its future competitiveness on deregulation or on modernisation and safer product portfolios. This decision will determine the trajectory of European industry and shape how investors and the public perceive it.
But we must acknowledge one fundamental truth: even if every company in the world announced tomorrow that it was stopping PFAS production, the problem would not disappear. We would still face the enormous task of addressing existing global contamination and managing the toxic legacy already embedded in our environment.
