The House of Representatives passed the Chemical Safety for the 21st Century Act on May 24th, and with another 60 senators cosponsoring the bipartisan bill, the bill is poised to become law. Designed to replace the older TSCA, the bill empowers EPA with the authority to reexamine over 85,000 chemicals that were previously considered safe under the old Toxic Substances Control Act. The bill requires that chemicals will need to be considered safe for children, pregnant women, workers, and other vulnerable populations in order for their continued usage and production. 

    Consumer goods producers will need to reexamine their entire product portfolios in order to comply with the bill. It stipulates that a minimum of 20 chemicals must be simultaneously reviewed by the EPA, and each review must be completed within 7 years. The EPA will be able to stop the distribution, use, disposal, etc. of any chemical it deems hazardous. Under the old TSCA, decisions to ban the use of chemicals took into consideration the financial impact of such a ban, however, the proposed bill requires only the health impacts be taken in account. 

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    For industry leaders such as Unilever (UN  ), which generates $20 billion annually from its personal care lines alone, this may bring sales to a halt, along with a litany of potential lawsuits, recalls, and other associated costs. Unilever settled a lawsuit for $10.2 million in 2014, after its Suave Keratin Infusion products caused hair loss and chemical burns. The costs of the EPA banning a key ingredient may be far greater: many chemicals are used in multiple Unilever brands, and a ban will not only result in lawsuits, but costly recalls, supply line restructuring, and damage to brand perception.  

    Competitors like Johnson & Johnson (JNJ  ) and Procter & Gamble (PG  ) have had glimpses of the damage a possible chemical ban could do to their profits. Johnson & Johnson recently settled a $25 million dollar suit related to a 2009 recall of their iconic Tylenol and Motrin brands after metal particles were found in the medicine; Johnson & Johnson has had over 40 similar recalls since 2009, and as a result, their market share of the cold & cough segment dropped from 17% to 5% since 2009, a $500 million loss in revenue. Procter & Gamble initiated a pet food recall in 2013, fearing that salmonella tainted pet food could infect its human handlers as well, recalling 10% of its annual output. The next year, Procter & Gamble profits dropped by 40%, a $4 billion loss.

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    The passage of the Chemical Safety Act will bring about a drop in profits across the industry in the short term, as risk analyses are performed, products redesigned, and recalled. Many chemical components are shared by multiple products in multiple companies, and household names like Johnson & Johnson, Unilever, and Procter & Gamble are sensitive to any sort of bans. A bar of Dove Soap can contain 15 or more different chemicals, all of which will need to be reviewed by the EPA eventually. Soap, shampoo, laundry detergent, and deodorant share many fragrant chemicals in common with each other, and a ban on any one of the chemicals used would affect Unilever's homecare segment significantly, along with similar detergent/hygiene products using the same chemicals under the Johnson & Johnson/ Procter & Gamble brands. These American consumer staples will need to increase spending to fund research and redesign efforts now, before the EPA forces them to with the regulations proposed by the reform bill.