Environmentally Focused Investment Managers Publish Nano Risk Report
The Investor Environmental Health Network has issued a report urging federal regulators to change shareholder reporting requirements to close loopholes that are allowing corporations to use nanotechnologies without disclosing their potential long-term risks to investors. Titled “Bridging the Credibility Gap, Eight Corporate Liability Accounting Loopholes That Regulators Must Close,” the report explores two case studies, asbestos and nanotechnology, to show how Securities and Exchange Commission (SEC) rules allow companies to underreport or fail to report product risks and liabilities until after they have become targets of litigation and may be on the verge of bankruptcy.
The network describes itself as an organization that encourages companies through dialogue and shareholder resolutions “to adopt policies to continually and systematically reduce and eliminate the toxic chemicals in their products.” Its members and advisory panel include groups such as the As You Sow Foundation, Sierra Club Mutual Funds, Friends of the Earth, and Campaign for Safe Cosmetics.
Discussing nanotechnology, the report notes that most companies do not openly advertise that their products contain nanoparticles and contends that current annual research investment in nanotechnology exceeds $9.6 billion worldwide with more than 2 million people working in its development, production or use. While the report discusses nanotechnology’s potential benefits, it also refers to a number of studies that purportedly show adverse effects on health and the environment.
The report specifically addresses how nanotechnology is being applied in the food industry in five categories: (i) “food contact materials or coatings designed to interact with the food or environment surrounding the food”; (ii) “food ingredients processed at the nanoscale to form nanostructures or nano-textures”; (iii) “nanosized additives and processing aids such as flavorants or colorants”; (iv) biosensor packaging utilizing nanotechnology”; and (v) “nanosized pesticides or agro-chemicals used in food production.”
Among the reforms that the network advocates are requiring SEC filings to disclose trends in scientific studies that may relate to public health or environmental risks; describe measures the company is taking to prevent, reduce or mitigate potential long-term liabilities; and allow the placement of shareholder resolutions requesting disclosure of the risks of concern to investors on annual proxy ballots.
In a related development, FoodNavigator-usa.com recently discussed differing views over nanotechnology. The president of nanoAgri Systems, which is developing vegetable packaging with nanosilver to prevent Salmonella, Listeria, and E. coli contamination, reportedly said during a nanoscience conference in California that restrictive regulation could “kill” the industry. He apparently claimed that environmentalists are lobbying the Environmental Protection Agency to impose barriers on the development of nanotechnology.
A toxicologist reportedly told FoodNavigator-USA that the food industry’s use of nanotechnology could make it “the new asbestos.” According to George Burdock, manufacturers do not understand how particles change when they are used at nano-size. He is reportedly concerned that nanoparticles could cross cellular membrane barriers and create health and safety risks. Still, he believes that federal
agencies have the tools they need to effectively test nano-product safety. See FoodNavigator-USA.com, June 16 and 17, 2009.
