The hidden costs of chemistry

The molecules that underpin modern life each have a story. Some of those stories come with a price tag that society has been paying quietly for decades. The economic burden associated with hazardous substances such as per- and polyfluoroalkyl substances (PFAS) and endocrine-system-disrupting chemicals is vast. These costs appear in many forms: environmental remediation, water scarcity, reduced agricultural productivity, lost workforce participation, and shorter life expectancy. The World Bank estimates that health impacts and diminished productivity from outdoor air pollution alone account for losses equivalent to nearly 5% of global gross domestic product. Other chemical externalities follow a similar pattern, even if they can be harder to trace and easier to ignore. For decades, these costs have remained largely externalized: absorbed by governments, communities, and ecosystems rather than by the companies that create and benefit from these chemistries. Eventually, however, the economic magnitude of externalities tends to surface as damage to people or the environment, with costs established through regulation or litigation, as well as reputational damage and the erosion of brand equity. PFAS provide a clear example. While the many chemicals considered PFAS have a host of useful properties, including stability at high temperatures, high oil and water repellence, and low dielectric constants, settlements addressing the damage they’ve caused to human health and the environment have already exceeded 10 billion, and additional liabilities continue to emerge. This reactive cycle—externalize first, internalize later under duress—is economically inefficient and strategically fragile. Firms should be recognizing these costs much earlier and integrating them into