How big chains from Walmart to Whole Foods are cleaning up chemicals

How big chains from Walmart to Whole Foods are cleaning up chemicals

A bookcase shaped like a lab flask
More corporations are embracing greener chemistry in both research and production.

This is an edited excerpt from the book Chemicals without Harm: Policies for a Sustainable World.

Every day thousands of people make decisions that affect the chemical market. Most decisions are about the costs, availability, and performance of products; few involve consideration of human health or the environment. If the consumer market offers an important opportunity for promoting safer chemical production and consumption systems, the amount of chemical information in the market must expand, and the number of products that take health and environment into account must increase. A chemical conversion strategy needs to address the chemical market.

A focus on commercial products provides important leverage in shifting to safer chemicals because products are so central to a consumer economy and so accessible to decision making by an informed public. Consumers, at the point of purchase, can select products with safer chemicals; retailers and institutional buyers, when negotiating supplier contracts, can specify products with safer chemicals; product manufacturers, when designing products, can specify safer chemical ingredients; and consumer advocacy campaigns, when targeting specific chemicals, can recommend products to buy or avoid.

As consumers increasingly seek more sustainable products, retailers — especially large retailers — have become a new voice for the chemical safety of the products they sell. In the absence of strong federal regulations, retailers have begun to set their own chemical policies that include requirements for their suppliers and lists of chemicals that should be avoided.

For some time, specialized retailers such as Patagonia, REI, H&M, and the Body Shop have had product supplier programs that screen hazardous chemicals out of their products, but these are niche enterprises serving health-conscious customers, and their total inventory has typically been too small to directly shift a market.

However, because these firms are often market leaders, they can have broad indirect effects on their own economic sector by introducing environmentally superior products into the sector, encouraging customers to experiment with new, health-sensitive products, and setting high standards for other firms within the sector.

Patagonia provides an illustrative example of a small apparel retailer with a history as a pace setter in environmentally conscious marketing. In 1996, Patagonia's founder, Yvon Chouinard, switched the majority of the apparel line to organic cotton as a means of raising customer awareness. Although Patagonia's organic cotton t-shirts, “Beneficial Ts," became a national market leader, Chouinard recognized the limits of a small retailer

in shaping the market and turned his attention to the broader apparel market. Working together, Patagonia and several similar retailers engaged the Switzerland-based bluesign Technologies to develop a product standard for apparel. With the motto “ if you don't know, you don't care," bluesign built a standard around five values: consumer safety, resource consumption, water quality, air quality, and occupational health and safety.

To be certified by bluesign, a supplier of dyes, coatings, finishing agents, and other textile constituents must submit to an on-site facility audit and prepare a chemical screening using special "bluetool" software that converts a list of chemical ingredients into a color-coded score indicating whether a substance can be used without restriction or only under specific conditions.

H&M, a larger clothing retailer with operations in 22 countries, has created its own chemical management screening process. The firm first restricted azo dyes during the 1990s in response to proposed German regulations. This early initiative soon turned into a full-fledged list of restricted substance that by 2007 contained more than 170 chemicals and chemical categories. To supply H&M, clothing manufacturers must present tests from H&M-approved labs demonstrating that these chemicals are not present or are below defined thresholds. 

Whole Foods Market with some 400 grocery stores in the United States has built a reputation selling high-end, "natural" foods. Its self-created quality standards screens for minimally processed foods that are free of hydrogenated fats, artificial flavors, colors and sweeteners, and ingredients listed on its “Unacceptable Food Ingredients ”list. The firm offers a “Premium Body Care" seal for products that suppliers demonstrate do not include synthetic fragrances or any of a list of 250 synthetic chemicals.

On the other end of the retail market, the huge purchasing contracts of "big box" retailers such as Walmart, Target, K-Mart/Sears, Home Depot, Staples, Kroger, and Safeway can more directly affect a manufacturer's market share. Within the retail sector, there has been a steady rise in corporate concentration, with a few large retailers in some sectors now accounting for up to 50 to 70 percent of the market. Because they have much greater leverage on suppliers, these firms' requirements can put significant pressure on upstream chemical suppliers. 

In the home improvement and hardware retail sector, Home Depot and Lowes together control more than a third of the U.S. market. Both of these firms require suppliers to meet various environmental requirements, including agreeing to seek lumber certified by the Forest Stewardship Council (FSC). Since working with the FSC, Home Depot has sold more than 630 million pieces of FSC-certified wood, shifted out of lauan-finished doors, moved to second-growth cedar forests for wood shingles, and phased out sales of lumber from forty endangered trees.

Two of the three largest office products retailers, Staples and Office Depot, representing nearly 50 percent of the sector's sales, now impose environmental requirements on their suppliers. Staples is the world's largest supplier of office products, with annual sales of $27 billion. During the early 2000s, Staples came under pressure from a nationwide campaign organized by consumer and environmental advocacy organizations that resulted in Staples ending sales of paper made from old-growth forests and increasing sales of recycled paper. In 2009, Staples purchased  

Driving the chemical market

Corporate Express, a leading supplier of business office supplies. Corporate Express had a line of Sustainable Earth commercial cleaning products developed by Roger McFadden, then the chief scientist at Corporate Express. To ensure high standards for these products, Roger had developed a three-part Sustainable Product Design Standard (SPDS), which he brought along to Staples during the merger. The first screen of the standard is composed of criteria for nine chemical hazard traits (such as CMRs, endocrine disruptors, volatile organic compounds) that a supplier's products must meet in order to sell through Staples.

The second screen includes criteria for 22 environmental, and health, and safety attributes that a product is scored on, while the third (optional) screen encourages continuous improvement. While products with low scores may still be sold through Staples, they cannot be marketed as environmentally preferable.

Roger sees such corporate policies as driving the market: "Being a market leader is a big responsibility. We are not just improving the environmental profile of our suppliers; we are making customers aware of how their purchases have real consequences on the health and safety of the offices that they work in and the places they go home to."

In terms of scale, Walmart is the world's heavyweight retailer. With 7,000 retail stores in 15 countries and annual sales of $410 billion, this one retailer has an unparalleled capacity to shape commercial markets. Walmart launched its sustainability program in 2005, with goals to use 100 percent renewable energy, achieve zero waste, and "sell products that sustain our resources and environment."

In 2004, Walmart began tracking hazardous chemicals in its stores to ensure regulatory compliance. New policies were established for Walmart buyers focused on preferential purchasing of garments made with organically grown cotton, toys that did not contain lead or phthalates, and electronic products compliant with the European RoHS Directive. To gain advice from outsiders, the retailer set up a series of 14 advisory groups called Sustainable Value Networks that focused on various environmental impacts ranging from energy efficiency, waste reduction, and packaging reduction to "chemical-intensive products."

This last group identified 20 chemicals of high concern and recommended restricting their presence in products, leading the retailer to ban pesticide products containing propoxur and permethrin and cleaning products containing nonylphenol ethoxylates.

In 2008, Walmart changed course by moving away from a discrete list of restricted substances to a third-party-based screening process. The process uses a screening tool, called the GreenWERCS Chemical Screening  Tool, designed by The Wercs, a private firm with a 25-year history of assisting corporations with chemicals compliance. The
GreenWERCS tool evaluates data on some 2,400 chemicals from 30 authoritative lists of chemical hazards.

To sell a product through Walmart, a supplier must present a confidential list of all intentionally added chemical ingredients to Wercs, and Wercs then uses its screening tool to develop a color-coded “ green score ”for the product. Before recommending the product to Walmart, Wercs reviews the product scores with the supplier and allows the supplier to adjust the chemical ingredients in order to achieve a higher score. Since its launch, Walmart has used Wercs to score more than 150,000 formulated products before placing them on Walmart
display shelves.

In 2013, Target, another "big box" retailer, also took steps to rate products on environmental attributes. Target took a different course from Walmart by working with GoodGuide to set a standard that product suppliers must use to rate their products, with scores that range from 0 to 100 based on points that can be earned in five categories: chemical hazard, transparency, animal testing, packaging, and water quality protection. Currently, the standard is being piloted on 7,500 products in household cleaners and personal care and baby care products. 

None of these retailers has a perfect record on all features of sustainability. Many have been criticized for problems in their foreign supply chains, and some have been criticized for their domestic labor relations. Such criticisms may be warranted; however, they do not negate the progress that these firms are driving in terms of chemical hazards.

Put bluntly, it is possible for retail firms to see a competitive advantage in offering safer products, particularly to business customers that they do not see in their labor relations. Thus, if the efforts of retailers on eliminating hazardous chemicals are to be seen as universally valued, they need to be balanced with incentives for promoting other values such as labor and community relations.

The role that these retailers are assuming in product supply chains presents several opportunities for shifting the chemical market. First, these retailers are broadening the definition of a quality product by making consumers more aware of the health and environmental values of products, particularly chemical hazards.

Second, the retailers are further defining their mission as a product screening and testing agent, suggesting a new role as a guardian of public and environmental health. Third, these retailer initiatives are sending assertive messages up the supply chain, pressing accountability for product safety and the burden of proof for chemical safety on to product manufacturers and, potentially, on up the supply chain to chemical manufacturers.

Conventionally, retailers have been seen as agents of product producers; however, some retailers are defining a new role as agents of consumers and, even more, as educators and partners of consumers. Such a reorientation creates a new voice for safer chemicals and provides important leverage for changing the chemical economy. Chemical manufacturers have not looked with much favor on this new activism by product retailers, arguing that restricting chemical ingredients in products should be the task of governments.

However, Richard Dennison from the Environmental Defense Fund praises this new corporate role as "regulation by retailer" and quips, "Chemical manufacturers need to be reminded that good business practice involves delivering what the customer wants — and product retailers know that voice best."