Is Your Company Ready for CPR?

Is Your Company Ready for CPR?

Amidst the global economic meltdown, many companies might need the financial equivalent of cardio-pulmonary resuscitation, but that's not the CPR that interests me here. I'm referring to Chemical Policy Reform, a long overdue, systematic and fundamental overhaul of the basic approach the U.S. federal government takes to managing hazards from chemicals in products.

Your company will be best positioned to deal with this new version of CPR if:
• You're tracking the chemicals in your supply chain and products;
• You're monitoring the latest scientific findings about how common chemicals foul up human development;
• Your corporate sustainability report addresses chemicals alongside energy, waste and recycling; and
• You're sharing and driving best safer chemical practices not only within your industry, but with leaders in other industries and NGOs.

Senator Frank Lautenberg plans to reintroduce his Kid-Safe Chemicals Act. President Obama's appointees will place greater weight than their predecessors did on the emerging science showing that even small amounts of common chemicals can wreak damage when exposure occurs in the earliest stages of human development. Reports on the many chemicals in all our bodies -- and their additive effects -- are proliferating, and the effect is rising consumer doubt about corporate assurances that the levels they're exposed to are "safe."

The companies likely to be hurt least and who might benefit the most will be those already far along in knowing their chemicals and finding safer substitutes.

Europe and various American states have already been moving on CPR; Washington is just playing catch-up. Last autumn's battle over phthalates in toys was recognized by seasoned political observers as the opening skirmish in a multiyear battle. It may not be a coincidence that the American Chemistry Council (ACC) is moving its headquarters from Arlington, Va., to Capitol Hill next year and that they have wooed form seven-term Democratic Congressman Cal Dooley to become their president. The State of Green Business 2009 report and Joel Makower's blog have referenced these issues and I've already foreshadowed them here on GreenBiz.com.

If the past is prologue, the upcoming debate will be portrayed as a battle royal between the chemical industry on the one side and environmental activists on the other. But between them are manufacturers and retailers whose reputations are getting caught in the crossfire and taking the hits when they're not prepared. Just this last year, retailers and bottle manufacturers got caught in the battle over BPA in plastic bottles. Those who saw it coming moved early, thereby avoiding disruption in the marketplace, and reaped financial rewards as a result, even while American Chemistry Council staff did their usual task of defending the chemical and the FDA became embroiled in one of its several disputes over politicized science.

So how might this debate be different? Well for starters, it's not as simple as the tree huggers versus those whose chemicals are "essential to life."

This time it's the environmental health movement -- much broader than the traditional environmental movement -- that's pushing for change, and that makes a big difference. It's the American Medical Association and the American Nursing Association passing resolutions calling for chemical policy reform. It's the Breast Cancer Fund pushing for a smarter chemicals policy that emphasizes reducing exposure to carcinogenic chemicals rather than emphasizing curing the disease once it occurs. And groups focused on asthma, learning disabilities and the like -- they're all increasingly aware of the growing science pointing fingers at the chemicals in our everyday lives, even if scientists haven't found the holy grail of "cause and effect" in humans.

It's also the case that growing numbers of entrepreneurs, startups and venture capitalists are recognizing that even if existing chemicals are essential to life, there might be safer substitutes. These could reflect lessons from biomimicry and be designed with the principles of green chemistry in mind.

So the companies with brand equity at stake -- retailers, food processors and so on -- need to ask themselves: How are we going to position ourselves in the coming policy debate? Your brand's less vulnerable if there's public confidence that your products are safe. Weak federal regulation erodes this confidence while concrete corporate commitments can help nurture it. Has your company committed to precautionary chemicals policies, along the lines of Wal-Mart and Dell, which acknowledge that action should be taken even when a scientific dossier is incomplete but there are ominous scientific warning signs? Are you systematically looking for safer chemical substitutions, like SC Johnson and Son, Inc., Herman Miller, and other such companies?

Beyond these individual corporate steps, are you joining in growing numbers of corporate/NGO dialogues whose goals are joint problem solving and a consensus on chemical principles that move beyond the existing, broken federal regulatory system.

One is the Green Chemistry and Commerce Council (GC3) organized by the Center for Sustainable Production at the University of Massachusetts-Lowell. The GC3 notes that "a growing number of companies are discovering that the approaches of green chemistry and Design for Environment (DfE) allow for a transition to safer alternatives. The Green Chemistry and Commerce Council provides open conversation about the challenges to and opportunities for this successful transition."

Along the same lines, the Business-NGO Working Group for Safer Chemicals and Sustainable Materials has hashed out a series of "Guiding Principles for Chemicals Policy," whose goal is to "establish an effective strategy for promoting, developing and using chemicals that are environmentally preferable across their entire life cycle." The four core elements are "know and disclose product chemistry," "assess and avoid hazards," "commit to continuous improvement" and "support public policies and industry standards" that advance these three principles. While the principles are in some respects aspirational and much work lies ahead to develop implementation guidelines, a number of companies have already signed on, particularly from the health care sector.

The state of California, always a bellwether for chemicals policy, recently enacted a green chemistry law and has encouraged broad public discussion over the last several years regarding the shaping of a green chemistry program that can produce both economic and environmental health benefits.

So as you position your company to participate in the upcoming public policy debates, what are you going to say and, especially, what might you want your trade association to say? How will this look to your customers concerned about their ability to conceive, their children's health, their own quality of life and burgeoning health care costs? And will your stance enhance or diminish your business's sustainability and its access to critical markets over the long haul?

(Full disclosure: I'm a "stakeholder" in Wal-Mart and Dell corporate social responsibility processes, and participate in both the Green Chemistry and Commerce Council and the Business-NGO Working Group for Safer Chemicals and Sustainable Materials.)

Richard A. Liroff, Ph.D., is founder and director of the Investor Environmental Health Network (IEHN). IEHN is a collaboration of investment managers that advocates for safer corporate chemicals policies to grow long-term shareholder value and reduce financial and reputational risks to companies. The business case for corporate safer chemicals policies, a list of shareholder resolutions on safer chemicals policies, and a roster of participants can be found on the IEHN website, www.iehn.org.
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