Risks and opportunities in the fight against PFAS

Hailed by industrial players over the past decades for their anti-adhesive, waterproof or heat-resistant properties, PFAS are used in the manufacturing process of many products, including cosmetics, packaging, textile, electronic devices and cooking utensils.  

The specificity of “eternal pollutants” is their persistence in the environment and their ability to be easily transported over long distances. They can be found in the air, water and soils, in the locations where they are manufactured and used, and even in waste. They also tend to accumulate in living organisms.  

In 2023, an international team of journalists conducted a wide-scale joint investigation as part of the Forever Pollution Project to build a  Map of Forever Pollution in Europe. They demonstrated that PFAS - a large family encompassing several thousand substances – are truly omnipresent. Early 2025, they estimated the cost of decontaminating Europe at around 2 trillion euros over the next twenty years.  

Beyond their impact on the environment, exposure to PFAS - notably through the food and water we consume, the air we breathe, or the products we use that contain these substances - pose a real yet invisible threat to public health. The U.S. Environmental Protection Agency (EPA) has drawn up a (probably non-exhaustive) listof threats for the human population, based on scientific evidence and covering substances that have undergone deep research. These include lower fertility levels, developmental defects in children, higher risk of cancer and obesity, etc.  

A major transparency issue 

Very few companies currently disclose detailed information on the use of PFAS in their product manufacturing chain and in the products themselves. Yet we believe transparency is the key, enabling investors to ensure companies comply with regulatory constraints - which have been tightened on both sides of the Atlantic in recent years - and to anticipate the risks posed by PFAS.  

As such, the United States and the European Union have already banned several of these chemical components (including PFOA and PFOS) and have recently set concentration thresholds for water, though they target different substances. Washington has introduced mandatory disclosure requirements regarding the production and imports of PFAS, while Brussels has banned these substances in a number of food products.  

Jessika Roswall, the new European Commissioner for Environment, was tasked by EU Commission President Ursula von der Leyen with the tricky mission of clarifying the EU’s position on PFAS and finalising revisions to the REACH regulation, which came into effect in 2007 to govern the manufacture and use of chemical substances in the industrial sector. Jessika Roswall has recently confirmed her determination to ban PFAS in consumer products. 

The crucial role of investors 

While stricter regulatory constraints and heightened vigilance from stakeholders are key to protecting our health and the environment, we also believe it is important for investors to identify a company’s exposure and potential reliance on PFAS.   

This will have a real impact on manufacturing processes and product composition, and could imply elevated compliance costs, particularly if the latter hadn’t been anticipated. Companies are also exposed to legal and reputation risks in the event of releases into the environment, the emergence of diseases, or misleading marketing practices for products labelled as “healthy” but containing these chemical substances.  

The “polluter pays” principle that was added to the law on PFAS adopted late February in France could implymajor expenditure for the companies concerned, notably in the event of site decontamination. In the United States, several financial arrangements have already been made within the chemicals industry in recent years. 

In this environment, and as the issue receives growing media attention, we call on companies to offer more clarity on their exposure to PFAS and the means employed to reduce this exposure. Access to reliable data will facilitate the assessment of PFAS-free product strategies and the identification of players that are spearheading research and the production of alternative substances.  

Shareholder engagement, core to Sycomore Asset Management’s responsible investment strategy, is an essential lever for supporting the development of sustainable business models able to address today’s societal and environmental challenges. 

Investment opportunities   

The fight against PFAS will naturally imply many private sector players and can generate attractive growth prospects for the latter, on account of the massive use of these substances in recent decades.  

Some segments stand to benefit from this trend in years to come, including consultancy firms, companies that either manufacture or sell testing equipment for water and soil pollution, or businesses handling hazardous waste or decontaminating soils.   

Finally, we believe companies specialised in the treatment of water and liquids or that supply this type of equipment will also have a major role to play. 

The opinions, estimates or projections relating to market trends or changes to the risk profile of issuers are based upon current market conditions and may evolve without notice. Sycomore AM offers no guarantee whatsoever as to their realisation. We believe the information supplied in this article to be reliable but should not be considered exhaustive. We remind readers that forecasts have their limitations and that as a result, Sycomore AM offers no guarantees that these projections will materialise.