Shareholders Push Hasbro to Drop Toxics from Toys

Shareholders Push Hasbro to Drop Toxics from Toys

In the wake of new restrictions on toxic chemicals in products across the U.S. and in Europe, shareholders in Hasbro have filed a resolution urging the company to stop using PVC in its products, as well as to produce a sustainability report reassuring shareholders that the company is taking the matter seriously.

"Shareholders need to know whether the companies they own are implementing environmental practices that will allow them to prosper in a climate of growing government regulation and environmentally preferable purchasing, or whether they are risking damage to our health, environment, and the company's bottom line," said William C. Thompson Jr., the New York City Comptroller.

Thompson also serves as investment advisor to the New York City Retirement Systems pension fund, which announced yesterday that it will support the Hasbro resolution.

New York City is one of many cities and states that have recently restricted the use of toxic chemicals in consumer products. The move reflects growing concern among scientists, governments and consumers about health and environmental effects of products containing PVC, lead, mercury, toxic flame retardants, and other toxic chemicals.

The resolution at Hasbro, filed by the Camilla Madden Trust, asks Hasbro to produce a sustainability report and highlights concerns about Hasbro toys manufactured from and packaged in PVC.

The filers at Hasbro noted in a recent letter to shareholders filed with the Securities and Exchange Commission that Wal-Mart, after reaching a voluntary agreement with the attorneys-general of New York and Illinois on a recall of PVC baby bibs laced with lead, has committed to support a voluntary industry standard to eliminate PVC from all products intended for use by children.

Wal-Mart is Hasbro's largest customer, representing 24 percent of Hasbro's consolidated net revenues in 2006. Toy manufacturers such as Brio, Chicco, Evenflo, Gerber, International Playthings, Sassy and Tiny Love have either phased out PVC or committed to phase outs.

"PVC phase-outs and commitments from Wal-Mart and other toy manufacturers signal that Hasbro lags its competitors and potentially faces a toxic lockout from the marketplace," said Margaret Weber of the Adrian Dominican Sisters in Adrian, Michigan, which file the resolution. "The company should evaluate whether its commitment to PVC is sustainable."

The resolution at Hasbro is one of thirteen resolutions addressing toxic chemicals in products introduced this proxy season, according to the Investor Environmental Health Network (IEHN). IEHN is a collaborative partnership of investment managers, advised by nongovernmental organizations, concerned about the market and health risks associated with corporate policies and practices regarding the use of toxic chemicals in products.

IEHN participants manage more than $22 billion in assets. In April 2007, IEHN published "Fiduciary Guide to Toxic Chemical Risk", which provides investors with a toolkit for examining the potential toxic liabilities in their portfolios

According to Richard Liroff, IEHN"s Executive Director, "Investors have successfully resolved these issues at many companies this year, as reflected in their withdrawal of resolutions filed at Sears Holdings, CVS, Mohawk Industries, and Apple."