Steering responsible innovation: the impact of EU REACH legislation on the novelty and toxicity of chemical inventions

This study investigates the influence of EU Registration, Evaluation, Authorisation and Restriction of Chemicals (REACH) legislation on the technological trajectory of the chemical industry. Focusing on the Substances of Very High Concern (SVHC) list, this study used a novel dataset of chemical patents and structures filed at the European Patent Office (EPO) over the period from 1990 to 2016. A staggered difference-in-differences approach with inverse probability weights was used to measure the impact of the SVHC list on the novelty and toxicity of chemical patents. The analysis revealed a substantial increase in the chemical novelty of patents after the introduction of the SVHC list. Simultaneously, a significant decrease in the toxicity of these patents was observed, underpinning the legislative intent of REACH. These findings highlight the ability of regulatory frameworks to strategically steer innovation, reinforcing the alignment between technological advancement and the overarching goals of responsible and sustainable development.