How Your Input Can Shape Corporate Reporting of Toxic Footprints
<p>The latest revision of the world's most widely used framework for corporate sustainability reporting provides an opportunity to push for increased disclosure of companies' efforts to reduce their toxic footprints.</p>
The Global Reporting Initiative, the gold standard for corporate sustainability reporting, is inviting suggestions of new topics through June 30 for the upcoming v4 (GRI calls it "G4") of its standards.
This is the initial step in a revision process scheduled to culminate in a revised standard in 2013. Companies that are systematically reducing their products' toxicity and reporting publicly on their progress should submit comments urging GRI to add specific reporting provisions that capture such efforts. Such reporting can highlight leaders and laggards in reducing corporate toxic footprints and promote development of safer chemicals and products.
Companies and trade associations are moving to capture cost savings that can be achieved through toxicity reduction:
They are lowering the reputational and litigation risks that can arise from manufacturing and selling products containing chemicals hazardous to human health and the environment. They are establishing programs and policies (including supply chain inventories) for identifying chemicals; creating restricted substances lists ("RSLs") to ban, phase out, or monitor chemicals; and designing metrics for assessing and publicly reporting progress.
These initiatives are labeled, variously, safer materials or environmentally preferable purchasing programs. Some programs are going beyond identification of specific chemicals of concern and are insisting on complete disclosure of chemicals in their supply chains. These are the types of programs that should routinely be described in corporate sustainability reports.
Companies and some trade associations are moving in advance of regulatory processes for toxic chemicals that, though tightening in recent years, are protracted and fragmented. For example, the European Union's REACH chemicals management strategy is scheduled to be implemented over 12 years. In the U.S., in the absence of overdue updating of the federal Toxic Substances Control Act of 1976, individual U.S. states have targeted individual chemicals and products, creating a patchwork of requirements for manufacturers and retailers.
One of the longest-running toxic footprint reduction programs is SC Johnson and Son, Inc.'s Greenlist program for scoring and reducing the toxicity of chemicals in its products. Chemicals are ranked from 0-3, with higher scores denoting the lowest hazard. SC Johnson statistics show a dramatic change between 2000 and 2009 in chemical use, with the proportion of the zero-rated chemicals declining from 10 percent to 1 percent and the proportion of the two highest-scoring chemical categories increasing from 18 percent to 43 percent.
Wal-Mart's chemical policy states the company will "provide to our customers affordable and effective products in which all chemicals are evaluated for potential health and environmental impacts delivered in the most efficient and effective way." Wal-Mart has partnered with TheWERCs in creation of GreenWERCS screening software to accomplish product evaluation while protecting proprietary formulation data.
Similarly, SciVera Lens, a web-based software tool for assessing chemical hazards and risk, is being deployed by the Suppliers Partnership for the Environment, a partnership of automobile original equipment manufacturers and their suppliers and the USEPA.
The Green Screen for Safer Chemicals is Clean Production Action's free, publicly accessible screening tool to promote the design, manufacture and use of safer chemicals. The Green Screen is designed to facilitate commercial adoption of safer alternatives via a simplified benchmark score from 1 (avoid) to 4 (prefer) applied to each chemical. Hewlett-Packard has piloted the use of the Green Screen as an alternatives assessment tool for polyvinyl chloride replacements and other substances. The Green Screen has also been used by the State of Washington and Maine to evaluate chemical alternatives and has been used by the USEPA's Design for Environment Program.
Halliburton has developed a Chemistry Scoring Index to address growing demand within the energy sector for less toxic materials, especially for hydraulic fracturing for natural gas development. The CSI scores chemicals' hazards and compares the scores of functionally equivalent products containing these chemicals. The scores are used to promote the use of less hazardous chemicals, assist in development of less hazardous products, and prioritize products in a company's chemical portfolio. Halliburton competitor BJ Services, now a unit of Baker-Hughes, has similarly developed its SmartCare evaluation tool.
Certification schemes have also begun to incorporate chemical identification and reduction criteria. For example, the Business and Institutional Furniture Manufacturers sustainability certification system awards credits for chemical assessment and for chemical reduction and elimination. Credits are provided for the extent to which chemicals in products are identified and for the reduction of chemicals in categories such as endocrine disruptors, reproductive toxicants, carcinogens, and persistent, bioaccumulative toxicants.
Similarly, the Green Seal pilot sustainability standard for product manufacturers, in its section on social and environmental goals, addresses safer chemistry planning and management, safer chemistry replacement progress, and public reporting. In a similar vein, the ULE Interim Sustainability Requirements proposed for manufacturing organizations award points to companies undertaking a chemical feedstocks inventory and a chemical alternatives program.
Seagate, the major supplier of disk drives to the electronics industry, requires its suppliers to disclose all the chemicals in the components and raw materials they are providing and has restricted the use of more than 200 chemicals of concern in its products. By having a complete inventory of chemicals, Seagate is well-positioned to respond to emerging concerns about chemicals that have not been previously regulated.
Building on these trends, the Business-NGO Working Group on Safer Chemicals has adopted four Principles for Chemicals Policy: Know and disclose product chemistry, assess and avoid hazards, commit to continuous improvement, and support public policies and industry standards that advance these approaches.
The Working Group was created in 2006 by 22 organizations from the environmental health community and the electronics, healthcare, furnishing, and retail sectors. Thus far the principles have been endorsed by 23 businesses and health care organizations, 11 investment groups, and 18 NGOs. Endorsing organizations include, for example, Hewlett-Packard, Staples, Kaiser Permanente and Catholic Healthcare West.
The Green Chemistry and Commerce Council, called GC3, is a business-to-business forum for members to discuss and share information and experience relating to advancing green chemistry, including product selection and supply chain management.
GC3's February 2011 report, Meeting Customers' Needs for Chemical Data: A Guidance Document for Suppliers, provides tools and examples in support of improved supply chain communication between suppliers and their customers about chemicals, to aid manufacturers' efforts to make informed decisions on the health and environmental impacts of the products they market.
The report notes that companies such as Nike and Method prefer suppliers with a chemical collection and reporting process in place. The report further observes that suppliers who have not been forthcoming about the presence of chemicals of concern in the materials they supply have been dropped by fabricators/formulators that have previously purchased their products.
In the current v3.1 of the GRI standard, the Product Responsibility indicator set, addresses "the effects of products and services management on customers and users." According to the standard, "Organizations are expected to exercise due care in the design of their products and services to ensure they … do not pose unintended hazards to health and safety."
However, because this section does not ask for details on chemical identification and hazard reduction programs, it does not presently drive companies to routinely and systematically describe such programs, though there are some companies who take the opportunity to do so. For example, Natura Brasil specifically describes its goal of eliminating parabens and phthalates from its personal care and consumer products and describes its progress. The Boots unit of AllianceBoots similarly reports its chemical-specific actions.
Notwithstanding these examples, since the point of GRI is to create comparability among companies through a consistent standard, the absence of a standard specific to reporting on chemical identification and hazard reduction makes it difficult for consumers of GRI reports -- both investors and other concerned stakeholders -- to determine which companies are best positioned to deal with emerging scientific, consumer, media and regulatory concerns regarding chemicals, and which are not.
The Product Responsibility indicator set should be revised to specifically encourage corporate reporting on precautionary chemical management approaches reflecting the disclosures and metrics, described above, used by leading companies and organizations. This reporting requirement would grow support for the GRI standard by investors, companies, institutions, and NGOs concerned with toxic chemicals.
Companies who are leaders in chemical identification and reduction and supply chain disclosure should urge GRI to add such reporting, to bolster their own efforts to secure disclosures and reductions more broadly within their industries. New indicators companies could suggest would ask GRI reporters to address:
1. Company programs to identify all the chemicals in their products and supply chains and eliminate the use of chemicals of concern and develop/procure safer alternatives
2. Specific chemicals of concern or groups of chemicals (e.g., carcinogens, endocrine disruptors, reproductive toxicants, etc) that are priorities for action based on authoritative lists, emerging science, or customer interest
3. Metrics of progress, and numerical goals, for reduction or elimination of substances of concern.
Image CC licensed by The U.S. Army, a Flickr user.