Shell Company Greenwashing Complaint Filed with SEC

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On February 1, 2023, Global Witness, an environmental justice-focused non-profit organization and a Shell shareholder, filed a complaint with the SEC’s Climate and ESG Task Force requesting the Agency investigate claims Shell has made regarding its renewable energy sources. The complaint alleges that Shell has materially misstated its financial commitment to renewable resources of energy by inflating the content of its new report,  “Renewables and Energy Solutions” (“RES”), reporting segment regarding fossil fuel activities.

Global Witness believes statements in the RES exaggerate the extent to which Shell is reducing its reliance on fossil fuels and investing in renewable energy sources. The non-profit states that while Shell claims to spend 12% ($2.4 billion) of its annual expenditure ($19.7 billion) on “Renewables and Energy Solutions,” actually, the company spends only 1.5% ($288 million) of its annual expenditure on true renewables (e.g., solar and wind power generation).  The complaint asserts that much of the RES designation is actually being diverted to investments in natural gas, which is neither renewable nor an energy solution.

In its complaint, Global Witness requests an SEC investigation into the following:

  • Whether the activities included in the RES segment have been properly reported under relevant accounting standards.
  • Whether including natural gas in RES without reporting how much spending Shell directs to gas has caused Shell to omit material facts necessary to its investors’ clear understanding of Shell’s purported energy transition.
  • Whether Shell’s reported capex on RES includes so much natural gas spending that labeling the segment “Renewables and Energy Solutions” constitutes a materially misleading misstatement.
  • Whether Shell is adequately disclosing its renewable energy investments in accordance with Section 10(b) of the Exchange Act and Rule 10b-5 thereunder, which make it unlawful to issue materially misleading statements or omissions in connection with the purchase or sale of any security.

Global Witness further requests that if SEC finds that Shell is misstating or omitting material facts in its financial filings, the Commission issue appropriate enforcement action to ensure that Shell’s investors have access to the clear and comprehensive information they rely upon to inform their investment decisions.

Kraft Heinz Sued Over PFAS in Capri Sun Strawberry Kiwi Juice Drink

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A class action lawsuit has been filed against Kraft Heinz, alleging that the company’s “all natural” Capri Sun Strawberry Kiwi juice drink contains PFAS chemicals. The lawsuit alleges violations of New York Business laws against misleading business practices and false advertising, as well as breach of express warranty, fraud, constructive fraud, and unjust enrichment. It asserts that Kraft Heinz has engaged in false and misleading marketing by claiming that the drink is always made from “all natural ingredients,” “every ingredient in Capri Sun® is All Natural” and is a healthy choice for kids while failing to disclose the presence of PFAS.

The complaint alleges that Kraft Heinz is aware that consumers are willing to pay a premium for all-natural foods and that disclosing the presence of PFAS in its product would damage place in the market. Capri Sun ranks as one of the top products in the $1.5 billion juice box market, with the company touting its product as the “#1 Kids’ Favorite Juice Drink”. The lawsuit seeks to cover all persons in the United States who purchased the drink for personal use during the period allowed by law.

 

 

Thinx Settles Lawsuit Over PFAS in Products

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Thinx, a New York-based period underwear company, has reached a settlement in a class action lawsuit related to the presence of PFAS in its products. The company was sued for marketing misrepresentations under the Florida Deceptive and Unfair Practices Act, on behalf of the Florida class, and breach of express warranty, unjust enrichment, negligent misrepresentation, and fraud, on behalf of the nationwide class. Plaintiffs alleged that third-party testing revealed the presence of PFAS in Thinx products despite claims by the company that its products, collectively referred to as “Thinx Underwear,” are a safe, healthy and sustainable choice. For example, multiple pages on its website state that the underwear is free of harmful chemicals.

The complaint asserted that customers are willing to pay a premium for Thinx Underwear as opposed to using less expensive traditional feminine hygiene products because traditional products are known to contain a variety of chemicals, including VOCs.

Thinx has continued to insist that it has never intentionally added PFAS to any of its Thinx Underwear. But the settlement agreement requires the company to take a number of steps to ensure PFAS are not intentionally added to its underwear at any stage of production. The company must also modify marketing materials to disclose the use of anti-microbial treatments, and it may not refer to the anti-microbial components as “non-migratory.” In addition, the settlement agreement requires Thinx to enter into a raw materials code of conduct with its suppliers, which requires suppliers to attest that PFAS are not intentionally added to Thinx period underwear.

EPA Requests Comments on New Approach Methodologies (NAMs) White Paper

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EPA published a draft white paper, New Approach Methodologies (NAMs) in the Endocrine Disruptor Screening Program (EDSP) and is requesting public comment. The white paper was developed pursuant to the Federal Food, Drug, and Cosmetics Act (“FFDCA”), which requires EPA to develop a screening program to determine whether certain substances may have effects in humans that is similar to an effect produced by naturally occurring estrogen or other endocrine effects. The white paper states that some NAMs are acceptable alternatives for certain EDSP Tier 1 assays. Other NAMs may be useful for prioritization purposes and weight of evidence evaluations. The EPA press release discussing the draft white paper states that it will “reinvigorate [EPA’s] efforts to meet its requirement for EDSP screening of chemicals and continue to provide transparency of EDSP Tier 1 testing, which is the step in the EDSP that determines the potential for endocrine-disrupting effects and whether there is a need to obtain more data by requiring additional Tier 2 tests.” Tier 1 screenings are used to identify substances that have the potential to interact with the endocrine system, while Tier 2 screenings are used to identify adverse endocrine-related effects caused by a substance.

Currently, each chemical undergoing ESDP Tier 1 methods can take up to six years, and the cost to the industry of each chemical review is roughly $1 million, due significantly to vertebrate testing. Certain validated NAMs included in the white paper will allow EPA to use alternatives to vertebrate animal testing and other in vitro assays, ultimately allowing the Agency to review chemicals faster, more efficiently, and at a lower cost to the Agency.

EPA Releases PFAS Analytic Tools

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On January 5, EPA released its PFAS Analytic Tools database, a collection of PFAS information the Agency has brought together from internal Agency databases, other federal agencies, and state and tribal agencies. The data will be particularly useful to the Agency when it reviews submissions on  PFAS releases from the Toxics Release Inventory (“TRI”) reporting.  In addition, EPA expects that the database will benefit state, local, and tribal governments in navigating the PFAS-related requirements they are subject to.  The Agency also expects that the database will help communities gain a better understanding of local PFAS releases.

The database has 11 tabs that include:

  • An integrated map,
  • Drinking water contamination, production,
  • Wastewater and/or stormwater discharge monitoring,
  • Superfund sites,
  • Industry sectors in which PFASs were manufactured or used as raw materials, and
  • toxic releases.

In its press release on the database and on the database interface itself, the Agency identifies several data gaps. For example, the drinking water Unregulated Contaminant Monitoring Rule (“UCMR”) data was collected only between 2012 and 2015. EPA notes that state agencies and public water systems may have better data on PFAS levels in drinking water. Additionally, only a few states have set PFAS effluent limits for National Pollutant Discharge Elimination System (“NPDES”) permit holders, causing significant gaps in discharge monitoring. (The Agency has initiated rulemaking to increase monitoring effluent for PFAS.

Each tab identifies relevant data gaps and limitations.

The Agency is taking steps to fill these data gaps, including:

  • Initiating rulemaking to increase monitoring effluent for PFAS;
  • Publishing the fifth Unregulated Contaminant Monitoring Rule, which will significantly increase the number of drinking water samples collected by regulated entities (EPA predicts the number of samples collected will be in the millions);
  • EPA’s proposal to designate PFAS as hazardous substances under CERCLA; and
  • EPA’s recent proposal to change PFAS reporting requirements in the TRI data collection.

EPA recently held a webinar introducing the database and demonstrating its use.  A recording of the webinar is available here. A copy of the Agency’s presentation is available here.

White House Office of Science and Technology Policy Requests Information on the Regulation of Biotechnology

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The White House Office of Science and Technology Policy (OSTP) recently released two Requests for Information (RFI) regarding the National Biotechnology and Biomanufacturing Initiative. The Initiative is intended to advance biotechnology and biomanufacturing for innovative solutions in a number of areas, including health, climate change, energy, food security, agriculture, and supply chain resilience. The goal of the program is to strengthen supply chains and lower prices, create sustainable products, create jobs, and spur new opportunities in agricultural communities.

The first RFI sought public input on how advances in biotechnology and biomanufacturing can help the country achieve societal goals related to health, climate change and energy, food and agricultural innovation, and resilient supply chains. Topics identified in the RFI include harnessing biotechnology and biomanufacturing R&D, identifying data gaps and collecting data on the bioeconomy, building a vibrant domestic biomanufacturing ecosystem, procuring biobased products, developing a biotechnology and biomanufacturing workforce, advancing biosafety and biosecurity, measuring the bioeconomy, and international engagement.

The second RFI focuses specifically on federal regulation of biotechnology. It requested public input on how to improve the clarity and efficiency of biotechnology product regulation. OSTP coordinated with the U.S. Environmental Protection Agency, the U.S. Food and Drug Administration, and the U.S. Department of Agriculture to develop the RFI.

 

 

EPA Issues Next Test Order Under National PFAS Testing Strategy — PFAS Used in Plastics at Issue

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EPA has issued its second round of Test Orders under its National PFAS Testing Strategy. The test orders require companies to conduct and submit testing on trifluoro (trifluoromethyl) oxirane (HFPO) (CASRN 428-59-1), a PFAS substance used in making plastics. According to EPA’s Chemical Data Reporting (CDR) database, more than 1,000,000 points of HFPO are manufactured each year. EPA has concluded, using existing hazard and exposure data, that HFPO may present an unreasonable risk of injury to health or the environment, finding that exposure may result in neurotoxicity, reproductive effects, and cancer. The Tier 1 testing will address human health from exposure via inhalation and hydrolysis. Tier 2 testing, if required, will look at reproductive toxicity, developmental neurotoxicity, and carcinogenicity.

The companies that are subject to the test order include The Chemours Company, DuPont De Nemours Inc., E.I. du Pont de Nemours and Company, and 3M Company. These companies are required to submit the results of testing data to EPA within 415 days of the effective date of the order. All data produced from this test order will subsequently be published on EPA’s website.

EPA Publishes Final IRIS Assessment of PFBA

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In December, EPA published the IRIS Toxicological Review of Perfluorobutanoic Acid and Related Salts. The Agency’s assessment addresses potential cancer and noncancer human health effects of exposure to perfluorobutanoic acid (PFBA) and its related salts. The most significant of the IRIS findings is that sufficient oral exposure to PFBA likely causes disruptions to normal thyroid hormone production, liver damage, and developmental effects. The Agency stated there was inadequate evidence to determine whether reproductive effects might represent a potential human health hazard following PFBA exposure.

PFBA and its related salts are members of the PFAS family.  It is a breakdown product of other PFAS that are used in a variety of products, including stain-resistant fabrics, carpets, and paper food packaging. PFBA can also be used in the manufacturing process of photo film and is used as a substitute for a type of PFAS, longer chain perfluoroalkyl carboxylic acids in consumer products. The substance can accumulate in agriculture crops, household dust, soils, food products, and surface, ground, and drinking water. Exposure to PFBA can occur through inhalation of indoor or outdoor air, ingesting contaminated drinking water and food, and dermal contact with PFBA-containing products.

As part of its PFAS Strategic Roadmap, EPA has been actively working on IRIS assessments for five PFAS: PFBA, PFHxA, PFHxS, PFNA, and PFDA. The PFBA IRIS is the first in this series to be released.

EPA Revokes Interim Approval of Glyphosate

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EPA recently withdrew its 2020 Interim Approval of glyphosate, often referred to by its trade name Roundup. Interim approvals are part of a conditional registration process used by the Agency to allow new active ingredients to enter the market for an unspecified period of time while the registrant generates missing data required by the Agency for the formal registration process.  Although the Interim Approval was revoked, EPA maintains that the chemical is not carcinogenic, and the product will remain on the market as the Agency completes its periodic review as required by law. In its registration review of glyphosate, the Agency will attempt to elaborate on its evaluation of the carcinogenic potential of glyphosate. EPA will also consider whether a better explanation is needed for its findings on other aspects of the human health analysis. EPA expects to complete the review of glyphosate in 2026.

The 2020 Interim Approval was challenged in the U.S. Court of Appeals for the Ninth Circuit. Petitioners made two main allegations, first that EPA’s analysis of human health, particularly related to cancer analysis, was faulty. Second, the Agency violated the Endangered Species Act (ESA) which requires the weighing of such risks against the benefits of glyphosate and the interim risk mitigation measures.

In June 2022, the Court vacated the human health portion of the glyphosate interim review decision and held that EPA’s registration review decision under FIFRA triggered ESA obligations. It also granted EPA’s request for voluntary remand, without vacatur, of the ecological portion of the interim registration review decision but imposed a deadline for EPA to issue a new ecological potion.

While the EPA has made this withdrawal decision, it is unable to finalize the new ecological portion in a registration review decision as mandated by the Court decision. The Agency states the delay is necessary to appropriately address the issues EPA sought to remedy in the ecological potion and satisfy the ESA requirements. EPA is currently working on a consultation with the U.S. Fish and Wildlife Service and the National Marine Fisheries Services. Any proposed decisions will require a 60-day comment period and an assessment of comments received. You can read EPA’s full release on its withdrawal decision here.

EPA Updates New Chemical Review Program Webpage to Increase Transparency

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In December 2022, EPA announced updates to its New Chemicals Review Program website to include additional information and metrics on the Agency’s review of new chemicals and significant new uses.  In the announcement, the Agency stressed its commitment to increasing efficiency, effectiveness, and transparency through the chemical review process. To progress in this goal, the website will now include:

  • A more detailed breakdown of new chemical submissions, including a month-by-month count of new chemical submissions, completed risk assessments, and completed risk management actions for all notices and exemptions.
  • Greater details and explanations on each step of the review process. This includes “the extent to which the submitter has provided additional information during the review period – subsequent to the original submission – and the level of effort needed to potentially rework some or all of the risk assessment as a result” and applicability of new approaches developed by the Agency to standardize reviews for certain new chemicals.
  • A status tracker for new chemical exemptions (e.g., Low Volume Exemptions (LVEs) and Test Market Exemptions (TMEs)).

According to EPA, the new website will be updated monthly.