3M’s pollution prevention pride came long before its looming fall. The sprawling industrial conglomerate in 1975 helped pioneer corporate sustainability by aiming to stop harmful contaminants in its manufacturing processes, an initiative showcased on the U.S. Environmental Protection Agency’s website even today, nearly five decades later. Billions of dollars in touted cost savings from the efforts, however, won’t be enough to cover the legal liabilities related to long-lasting chemicals that now threaten the company’s sacrosanct dividend and may eventually exact an even steeper cost.
Best known to many consumers for its Post-it Notes and Scotchgard cleaners, 3M began as a small mining venture more than a century ago. It now churns out approximately 60,000 products. Some of them contain chemicals known as per- and polyfluorinated substances, or PFAS, used in everything from cars to medicines to resist heat, stains, water and more. 3M also manufactures the “forever” chemicals themselves, so-called because they don’t easily break down in the body or the environment. Following growing pressure from regulators and investors, the $57 billion company run by Mike Roman said just before Christmas that it would stop making PFAS by 2025 and try to rid them from all its products by then, too.
The chemicals, which have been linked to a range of health problems, only account for about $200 million of annual EBITDA, or about 2% of 3M’s total last year, but the damage they will inflict on the company will be far larger. It agreed last month to pay U.S. public water suppliers between $10.5 billion and $12.5 billion over more than a decade, or $10.3 billion on a present-value basis, to support remediation of PFAS. Roman called the agreement an “important step forward”.
[Roman’s departure will truly be an “important step forward.”]