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Whether it's salmonella in food or bisphenol A in baby bottles, product safety has become one of the biggest green business issues of the day: it's a topic that garners major attention from corporations, individuals, the media and legislators alike.
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BPA is a great example of how quickly and thoroughly this heightened awareness can change the market; according to Rich Liroff, the executive director of the Investor Environmental Health Network, says that in a short span of time, BPA has basically come off the market for sports bottles and baby bottles.
Liroff has long been a leader in the push for a safer chemicals policy, and has been working with companies to encourage them to take greater responsibility for what goes into their products and supply chains.
I spoke with Rich last month, in advance of our Greener by Design conference, where he'll be a member of an all-star lineup of speakers and presenters looking at how to design greener products for leaner times.
Matt Wheeland: Rich, thanks so much for taking the time to talk today. I wanted to talk to you because last year when I interviewed you for our state of green business report; you gave me what you called at the time an extended version of the standard Liroff rap. And it was a really useful and clear overview of what's happening around growing public concern about toxic chemicals. And I wondered, would you give our listeners a sort of abbreviated rundown of that?
Rich Liroff: Thanks Matt, I appreciate the opportunity to give you the Liroff rap. The basic Liroff rap is that companies really need to pay attention to their toxic footprint. We hear a lot of talk these days about climate footprint. We hear growing talk about water footprint. Companies really need to be thinking about what their toxic footprint is.
At the Investor Environmental Health Network we think that companies should be adopting safer chemicals policies. They should know the chemicals in their products. And they should systematically be working to reduce the toxicity of the chemicals in the products that they make. There are lots of very good business reasons for doing this. There is of course reputational risk. There is the potential for being shut out of the marketplace if a regulator says you can't sell a product containing chemical X or chemical Y. There is of course the litigation risk. And then there is also the possibility of being shut out of a marketplace even if regulators haven't acted but some big, private sector purchaser decides to act on a chemical.
For example, last year even though bisphenol A in plastic baby bottles has been declared by the Food and Drug Administration to be safe, much of retailers like Walmart and Toys-R-Us said, "No, we're not going to carry those baby bottles." The story isn't – the business case isn't all a negative one. Really the business case is a double edged sword for all the risks that companies run if they don't know the chemicals in their products or if they have chemicals that become subject to regulation or litigation. The flip side is that companies that follow emerging science see risks are emerging, they can take early steps to be first entrants as older products are regulating out of the marketplace and room is created for newer products. So for example, again in the plastics bottle space, those companies which saw the changes in the marketplace coming switched over to alternative plastics or provided increasing numbers of steel and aluminum bottles; and they benefited from the BPA controversy last year.
MW: The other example that I had been thinking about when I thought of BPA was I felt like it was a little far flung, but I think in light of our discussion of the lining of canned food, it may be not as far flung as I had thought. And so the other example was the use of pesticides in food. And I know that your organization, the Investor Environmental Health Network, just had a major success along those lines. Will you tell us about that?
RL: People tend to think of agriculture as either conventional agriculture or organic agriculture. But in fact, conventional agriculture operates with many different amounts of pesticide. And the objective of our engagement with McDonald's and with other companies is to encourage them to encourage their suppliers to reduce their reliance on pesticides where they can, even if they're not going organic; at least reduce the amounts of pesticides that they're using on the fruits and vegetables that they're growing. There are quite a number of companies that have been doing this for a very long time.
Sysco, which is a supplier to Wendy's, has been doing this for several years. In the corporate social responsibility report, they report on the reduced use of pesticides by their growers. General Mills has done the same thing. And in fact, General Mills has published in their CSR report, future goals for further reduction of pesticide use. And Campbell's has been doing this for about 20 years. The benefits are not only to farm workers and to local agricultural communities but also to the bottom line, because a lot of these reduced pesticide use strategies save money.
We approached McDonald's on pesticide use reduction because they're just such a huge consumer of fruits and vegetables, particularly potatoes. They're the number one buyer of potatoes in the United States. I think the number is something like two billion pounds a year. And so what we've done is we've reached an agreement with McDonald's for them to examine some of the metrics programs that have been developed by other companies and by researchers and to see how they can apply these metrics and management systems to their own potato supply chain. I would emphasize that we're not dictating to them how they should do this. We're simply encouraging them to look at the opportunities that are available to them because we think that since they're such a big player in the marketplace, if they begin to move then this can move reduced pesticide use that much farther and faster in the agricultural community.
MW: So from the sort of most basic level of growing food to much more complex manufacturing processes like sport water bottles or baby bottles, we've got a couple of examples of how companies are working to reduce toxics. Are there any other notable examples that you're seeing, ways that companies are looking at or removing toxics from their products?
RL: There are quite a number of companies which have adopted various methods for lowering the toxicity of their product lines. Perhaps the most noteworthy example is S.C. Johnson and Son privately held company. And they have a program called the green list process where they score all the chemicals that are being used in their products zero from the least desirable to three being most desirable. They total up the chemical use for all their product categories. And their objective is to raise their toxic chemical score over time. And this is a core strategic objective of the company. It's built into their compensation system. It's built into their training system. And they've had some degree of success with this.
And what they've found is for example, in their very well known blue Windex product, is that the search for lower toxicity formulations can drive innovation. In the case of blue Windex several years ago, they reformulated, got rid of some toxic chemicals, increased the effectiveness of the product by 30 percent and gained both sales and market share. There are other companies like Nike, like Dell, overseas companies like Marks and Spencer, Samson; all of which are say developing restrictive substances lists, identifying the chemicals that they are targeting for restriction or reduction. And they're making progress. And I think they derive the benefit of enhancing their reputations, enhancing their green credentials. And they reduce the risk of being locked out of various markets as the science grows around various chemicals of concern.
MW: And I think that your example of S.C. Johnson is fantastic. I mean they're leading on this in so many ways. And it sounds like they're also getting almost any benefit you can imagine from this. So what is keeping companies – what is preventing companies from starting these projects or taking these projects farther?
RL: I think to some extent it's an issue of prioritization. Over and over again it seems to me that the key factor is C-suite interest. Is the CEO interested, the senior management interested? Do they understand how important toxic chemicals can be in terms of return on investment? There's this great video that Lee Scott, the former CEO of Walmart, did in the context of their very, very well known sustainability program. He describes himself as being sort of a traditional compliance guy. Well of course we're going to be in compliance with the law and we'll be fine. And then he says that he – and he had some sort of aha moment where he realized that there's a lot to be said for going beyond compliance for looking seriously at sustainability in the business and seeing what sort of business benefits could be derived from that in addition of course to the social benefits.
And so part of Walmart's sustainability program is screening chemicals. They've identified a number of chemicals that they don't want to be selling. And they are not pilot testing some sort of score card or screening process where looking at the chemical characteristics of the chemicals in their product lines, and they're going to be encouraging the suppliers to provide them with safer products from the toxics perspective.
MW: Rich, you've been blogging for Green Biz.com and our other websites for some time now. And recently, I think it might be your most recent post, had the intriguing headline, "FDA legalizes salmonella." What was the idea behind that?
RL: The idea behind that is that it's not sufficient for companies, especially consumer friendly companies, to say well we comply with the law or we observe all rules and regulations. People expect more now because as the bisphenol A example illustrates, regulation is a lagging indicator. New science is popping up every day underscoring the hazards from various chemicals, especially small amounts of chemicals, in everyday products that pregnant women may be exposed to, the young children may be exposed to. So companies need to be paying attention to this emerging science. They need to get ahead of the game both to protect their reputations, avoid liability, and conversely to take advantage of business opportunities that might surface, the positive ones when all chemicals get phased out and space is created in the marketplace for new chemicals.
MW: Great Rich. Thanks so much for your time today. I look forward to hearing a lot more from you at our Greener By Design conference coming up next month in San Francisco.
RL: I appreciate the opportunity to speak with you today Matt, and I'm very much looking forward to that conference.