Chemical footprinting strides to become mainstream with Walmart
Global momentum toward chemical safety is rising as the financial and health implications of chemical mismanagement become increasingly clear.
Witness the global Sustainable Development Goals (SDGs), which highlight the importance of reducing and managing hazardous chemicals to meet the objectives of ensuring healthy lives, the availability of clean water, and sustainable consumption and production patterns.
The Chemical Footprint Project (CFP) initiative of investors, retailers, government agencies, non-governmental organizations (NGOs) and health care organizations aspires to support these goals through the effective management of chemicals in products and supply chains. CFP signatories include investors with over $2.3 trillion in assets under management and purchasers with over $600 billion in buying power. (Some of the authors of this piece are affiliated with the Chemical Footprint Project).
Walmart Stores is the latest signatory to the project, agreeing to offer up data related to chemicals in products it sells.
And it isn't alone. The results from a 2016 CFP Survey reveal how 24 companies manage chemicals in their products and supply chains. They provide a snapshot of chemical management policies and practices — beyond regulatory compliance — across a diverse set of businesses.
The CFP Survey evaluates companies and their chemical management policies and practices based on four key pillars:
1. Management strategy: the policies and strategies companies put into place to manage chemicals
2. Chemical inventory: the information companies collect on chemicals in products and supply chains
3. Footprint measurement: the baseline data companies have on chemicals of high concern to human health and the environment (CoHCs) in products and their tracking of progress to safer alternatives
4. Disclosure and verification: the sharing of information on chemicals in products with the public, disclosure of scores and responses to the CFP Survey, and steps taken to verify responses to the survey.
“Companies that excel in these indicators are the companies that use the safest chemical ingredients in their products and have the deepest knowledge of their suppliers and their chemicals management practices,” said Boma Brown-West, senior manager for consumer health at the Environmental Defense Fund.
Capturing your chemical footprint
The diversity of companies participating in the CFP Survey highlights the relevance and value of chemical footprinting across the business community.
Companies participating in the 2016 CFP Survey have annual revenues over $670 billion and market cap valuations over $730 billion. They sell formulated products and articles. They range in size from small national brands to large multinational corporations. They sell apparel and footwear, building products and furnishings, household and personal care products, electronics, toys, medical devices and packaging.
Walmart is the first company to participate both as a responder by filling in the survey and a signatory, agreeing to engage its suppliers in participating in CFP.
The upshot of this evolution: For the first time ever, companies are quantitatively measuring and reporting their chemical footprint.
Companies participating in the 2016 survey are breaking new ground by demonstrating how to calculate an organization-wide chemical footprint.
Companies reporting their chemical footprint now have clear metrics for evaluating progress to safer chemicals, including reducing the number and mass of CoHCs in products. A highlight in the 2016 CFP Survey responses is that 13 percent of reporting companies reduced their use of CoHCs in products by 416 million pounds (or 189 million kilograms) over the past two years.
Quantitative chemical footprinting is the new metric for assessing corporate performance. It will help companies in meeting the SDGs and reporting to the SASB standards, which ask companies to report on chemicals of concern by percent of revenue sales.
Minding the gaps
Looking ahead, survey results can provide metrics for benchmarking chemicals management performance based on company size, type of products sold, and CFP pillar.
The 2016 survey results fall into two broad categories of companies based on type of products sold: first, companies that sell formulated products, and second, companies that sell only articles. Formulated products include liquid-based products such as cleaners, paints, personal care products and detergents. Articles are hard products such as furniture, electronics and apparel.
The two categories of companies differ significantly. Formulated product companies recognize their products contain chemicals, which they often specify in the products they sell. Governments regulate the handling, shipping, disposal and labeling of formulated products much more rigorously than with articles. Companies selling articles see their products as made from materials and may not consider the chemical content of those materials unless asked or required by customers or regulations.
Surprisingly among companies selling formulated products, small and large companies overall scored similarly — though they reached their scores by following different paths.
Large companies selling formulated products scored higher in the category of Management Strategy and Chemical Inventory, while small companies selling formulated products scored higher for Footprint Measurement and Disclosure & Verification. The large companies scored higher for developing and implementing policies, systems and procedures for safer chemicals. Yet small firms scored higher for footprinting and disclosure because many participating in CFP avoid hazardous chemicals by design and are committed to greater transparency.
Article companies scored in a more predictable fashion, with large firms scoring highest, followed by medium and then small companies. Large companies selling articles scored highest for every CFP Pillar. Medium companies selling articles scored higher than small companies for every CFP Pillar except Disclosure & Verification. Small companies selling articles are on the learning curve for how to implement environmentally sound chemical management practices.
We attribute the higher scores for large companies selling articles to their greater awareness of chemicals of high concern in their products and supply chains, for greater resources to manage chemicals of high concern (including resources for supply chain engagement as well as creating and managing databases), and for greater need to have corporate policies in place to develop and implement chemical management systems.
Small companies in particular are encouraged to tap into the technical knowledge of peers and leverage resources available from governments, universities and NGOs to offset their resource disadvantages.
The CFP survey results reveal clear steps companies can take to improve their "sound management of chemicals" and move toward the goal of achieving sustainable consumption and production, including:
- Corporate policy: establish a comprehensive chemicals policy.
- Inventory: know the chemicals in your company’s products and supply chains.
- Measurement: quantitatively measure your company’s chemical footprint, set measurable goals, and monitor progress to these goals.
- Transparency: engage the public, institutional customers, and investors in your firm’s journey to effective chemicals management by sharing publicly your CFP answers and score.
Companies taking these actions will be well on the path to the environmentally sound management of chemicals in their products and supply chains.