Retailers are often caught by surprise when a new chemical of concern hits the news. Headlines such as "Dangerous Toys Lurk on Store Shelves" or "Plastics in Baby Bottles May Pose Health Risk" can send retailers scrambling to remove products from shelves, often in response to public concerns that precede regulations.
While reacting quickly to such news is often an appropriate response, such hurried action can be very costly and can impact customer loyalty and brand integrity. And although it may get some products of concern out of the marketplace, it does not provide a long-term solution to the problem of harmful chemicals in consumer products. Such a reactive approach can also lead to regrettable substitutions, where a chemical or product of concern is replaced with one that is equally or more dangerous.
As this story plays out over and over with chemicals such as lead, bisphenol A, brominated flame retardants and other toxicants, many retailers are recognizing that it makes much more strategic sense to be proactive rather than reactive. Retailers understand that these events are often a signal that new regulations are imminent.
For example, after 17 million toys were recalled in 2007 for violation of the lead standard, the federal government quickly passed the Consumer Product Safety Improvement Act in 2008 that tightened restrictions on lead and banned phthalates in children's products, among other provisions. Government action on BPA was slower, but the Food and Drug Administration banned BPA from sippy cups and baby bottles in 2012, several years after concerns were raised and many manufacturers took action to remove the chemical from baby products.
Retailers are finding that their institutional and individual customers have become more sophisticated about and aware of toxic chemicals in products and are demanding that chemical information be disclosed and that these risks be eliminated. In response, leading retailers are developing a range of approaches to chemicals management that they are implementing throughout their supply chains:
- In 2010 Staples Inc. announced to its suppliers a "Race to the Top" strategy. Suppliers are asked to disclose whether they are using any chemicals on a list of chemicals of concern that Staples has compiled and if so, to find a safer alternative that is cost neutral. In cases where a safer alternative is not available, suppliers are asked to provide a timeline for phasing out the use of the chemical of concern.
- Kingfisher, Europe's largest home improvement retailer, has set a target that by 2020 none of its private label products will contain chemicals of concern that the company has committed to remove.
- Wal-Mart has developed category-specific scorecards for suppliers that include questions about chemical ingredients in relevant categories such as cleaning products. These scorecards will be used in reviews of suppliers and, in addition, Wal-Mart buyers will be evaluated for their success in bringing products that score well to store shelves.
- Boots, the U.K.'s leading health and beauty retailer, has developed a chemicals policy and management strategy. The company maintains a priority substances list that is updated regularly and describes the action being taken on chemicals of concern.
- Walgreen's recent purchase of a 45 percent stake in Alliance Boots (the parent company of Boots U.K.), raises the intriguing question of whether Walgreens will build on Boots' experience to expedite development of its own priority substances list that goes beyond the 10 chemicals of concern eliminated from its recently introduced "Ology" line of products.
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