Considered by some to be the next frontier of global economic development, nanotechnology has the potential to revolutionize industries like healthcare, information technology and energy systems. However, the promise of nanotechnology is tethered to unique environmental, health and safety (EH&S) issues that are not yet fully understood.
A new study provides investors and stakeholders with a comprehensive guide to this nascent, rapidly growing industry. The study indicates that nanotechnology could provide important societal and economic benefits along with substantial financial rewards for investors. But, interest groups and shareholders eyeing rapid growth and minimal regulation already are questioning whether nanotechnology is on a responsible development path. The study also finds corporate disclosures on nanotechnology are minimal and, in some instances, even the companies themselves may be unaware that their products contain nanomaterials.
Nanotechnology and the S&P 500: Small Sizes, Big Questions is authored by the Sustainable Investments Institute (Si2) and was commissioned by the Investor Responsibility Research Center Institute (IRRCi). A webinar is scheduled for Thursday, October 23, 2014, at 2 PM ET to review the findings and respond to questions.
Download the research here. Register for the webinar here.
“Already, nanotechnology has realized scientific success. Its next phase could lead to revolutionary advancements for treating diseases, purifying water and addressing environmental issues,” said Jon Lukomnik, IRRCi executive director.
“However, the nanotechnology debate is heating up. Investors are engaging companies in discussions about nano-related environmental, health and safety risks and recently forced a vote on the first nano-related shareholder resolution. We hope this new guide informs this debate with objective information that is a useful decision making tool for investors, policymakers and others,” Lukomnik said.
“Because various regulatory agencies are only starting to evaluate possible health and environmental risks, investors may want to determine for themselves if companies have risk management systems in place commensurate with their exposure,” said report author Susan Williams.
“Most industries either are already incorporating nanomaterials into products or conducting research based on nanotechnology. This means companies should tell investors how they are using nanotechnology and taking appropriate precautions,” Si2 Executive Director Heidi Welsh added.
The report provides a guide to:
- Key issues: This study identifies key issues for investors to consider regarding companies that use and develop nanotechnology and nanomaterials.
- Current disclosure: This study summarizes the current state of disclosure by S&P 500 companies.
- Development of the field and market: This study provides an overview of products and processes, sketches out the 30-year-old development of the nanotechnology field in the U.S., and points out the key areas that appear most promising. It also presents estimates on the size of investments so far and the potential market in the near future, noting why it is hard to obtain accurate data.
- Environmental, health and safety: The study presents the currently identified range of risks to humans and the environment and efforts to improve EH&S research, including voluntary codes, frameworks and collaborations.
- Regulation: The study’s section on regulation identifies questions about appropriate regulations and notes the differences in current European and U.S. strategies, outlining the relevant EU and U.S. laws and policy principles released by the White House Office of Science and Technology.
- Shareholder engagement: The study notes shareholder proposal disclosure efforts begun in 2008 and how they have fared to date.
Nanotechnology is an emerging field that focuses on the understanding and control of matter at near-atomic scale. It crosses scientific disciplines and has the potential to affect virtually every aspect of daily life and every economic sector. At least 1,600 consumer products have entered the marketplace in the last eight years, and this is just a sliver of the products and processes already in use and under development. By 2020, six million people worldwide may work with nanomaterials. Corporations now provide about half the funding for research on nano frontiers, catching up with governments led by the United States and 60 other countries such as Germany, France, Japan, Korea and China.
The Investor Responsibility Research Center Institute is a nonprofit research organization that funds academic and practitioner research that enables investors, policymakers, and other stakeholders to make data-driven decisions. IRRCi research covers a wide range of topics of interest to investors, is objective, unbiased, and disseminated widely. More information is available at www.irrcinstitute.org
The Sustainable Investments Institute (Si2) provides institutional investors with in-depth, impartial analysis of environmental and social policy shareholder resolutions filed at U.S. companies. It also is an incubator for empirical research on emerging sustainability topics and corporate and investor responsibility issues. More about Si2 is at www.siinstitute.org.