A group of toxic chemicals known as PFAS have moved from being a niche environmental concern to a multi-billion-dollar liability risk for investors, according to new research from financial think-tank Planet Tracker.
PFAS is now one of the most significant environmental litigation issues in history, with 15,000 active US lawsuits and a $10bn settlement by 3M in 2023.
This growing wave of PFAS-related settlements could translate into material impacts on the cash flow, balance sheets and credit profiles of exposed companies.
To help investors manage these risks, Planet Tracker has developed a PFAS litigation risk dashboard – an online tool to support research, valuation and stewardship efforts.
The dashboard analyses 1,082 publicly listed companies and 5,248 associated facilities for estimated PFAS litigation risk, focusing on major PFAS-using and PFAS-emitting industries in the US and Europe.
Over half of the companies (55%) and facilities (61%) are categorised as high risk, based on factors including company activity, area pollution and population concentration, as well as the strength of applicable PFAS regulation.
Planet Tracker’s analysis shows that exposure to PFAS risk is concentrated among upstream producers of specialty chemicals, fluoropolymers and firefighting foams, such as BASF SE, DuPont and Solvay SA. Roughly one third of all high-risk facilities sit within just 20 parent companies.
However, it also revealed that downstream users can still face significant liabilities through local groundwater contamination and community claims despite not manufacturing PFAS themselves. Material risks were identified in sectors as diverse as apparel, footwear, cosmetics, food packaging, waste management and water utilities.
For example, footwear company Wolverine Worldwide faced lawsuits after PFAS-containing Scotchgard used in waterproof shoe leather contaminated drinking water supplies. Settlements and costs of around $170–180 million equate to roughly 7–11% of its enterprise value of $1.6bn, demonstrating clear financial materiality.
For global asset managers, PFAS litigation risk is not just a stock specific issue but a portfolio wide one: Investment firms such as FMR, Invesco and BlackRock each hold hundreds of high-risk issuers, with combined exposure running into the hundreds of billions of dollars of equity value.
Planet Tracker urged investors to integrate PFAS liabilities into valuation, credit and risk models and to use engagement and voting to push companies to phase out PFAS. It also emphasised the need for investors to collectively integrate PFAS risk into mandates and index design, rather than treating it solely as an engagement topic.
Report author Thalia Bofiliou said, “PFAS is creating a hidden toxicity debt that is already surfacing on corporate balance sheets through mounting legal settlements and clean‑up costs. Investors who downplay PFAS risk now could face abrupt valuation adjustments as more cases and regulations crystallise into hard liabilities.”
