Impact on Dow Chemicals Reputation

Aside from direct financial liabilities, investors should recognize the international significance and historical resonance of the Bhopal chemical disaster, and therefore its powerful effect on corporate reputation. Since the purchase of Union Carbide in 2001, Dow has been subjected to escalating public scrutiny and demands for action refocused from Union Carbide to Dow Chemical as the new parent corporation. These include  

In light of these developments, it is reasonable for investors analyzing the situation to determine that the Bhopal controversy will not go away on its own and indeed will always be a black mark on the company s record. Increased attention to Bhopal heightens the real potential that money managers who run portfolios that incorporate environmental and social analysis will screen out Dow stock. There is over 2.18 

To leam more about these and other similar issues facing Dow Chemical, see Dow Chemical Risks for Investors by Marc Brammer, Sr. Analyst, Innovest Strategic Value Advisors (available at www.innovestgroup.com). 

11 SCIENTIFIC, POLITICAL, AND INVESTOR DRIVERS OF CHEMICAL INDUSTRY SUSTAINABILITY AN NGO PERSPECTIVE 

The saga of brominated flame retardants offers a cautionary tale for the chemical industry.65 These chemicals, developed in the early 1970s, are used in a wide range of consumer products, such as furniture, foam, and plastic casings of electronic devices. In 1998, Swedish scientists reviewing archived human breast milk samples discovered that certain flame retardant chemicals (polybrominated diphenyl ethers, or PBDEs) had doubled in concentration in Swedish breast milk about every five years over the preceding twenty. This was a source of concern, as studies of laboratory animals had shown that PBDEs dismpt thyroid hormones. Such dismption yields neurobehavioral effects similar to those of PCBs (polychlorinated biphenyls), whose manufacture the United States banned in 1976. 

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