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Third-Party Benchmark Supports Investors, Purchasers, and Brands in Assessing Chemical Risks
In the first initiative of its kind to publicly benchmark corporate chemicals management, the Chemical Footprint Project(#ChemicalFootprint) today published its inaugural report. The results provide valuable insights into how leading companies manage chemicals in their products and supply chains, and how all companies might manage these issues in the future.
Last year, a select group of 24 leading-edge businesses both small (millions in annual revenue) and large (tens of billions in annual revenue) stepped forward to participate in the Chemical Footprint Project and to receive a score on their corporate chemicals management practices. Participants included: Levi Strauss & Co.; Seagate Technology, PLC; Johnson & Johnson; GOJO Industries; Becton, Dickinson and Company; Beautycounter; and California Baby, among others.
The report analyzes participants’ responses to a 20-question survey regarding chemicals management across four categories: Management Strategy, Chemical Inventory, Footprint Measurement, and Disclosure & Verification. Key findings include:
– Senior leadership matters:The 29% of firms with Board-level oversight or senior management incentives performed better overall than firms with no such accountability.
– Companies need comprehensive policies: Without policies that address chemical hazards in manufacturing, supply chains, and packaging – in addition to products – companies face hidden liabilities and chemical risks.
– Disclosure lags practice: Across every category – Management, Inventory, Footprint, and Disclosure – companies have more chemicals management practices in place than they share publicly. For example, 83% have a legally restricted substances list, but only 17% of those companies make that list public.
– “Design for Health” sets leading edge: companies whose entire product portfolios are based on minimizing or eliminating chemicals of high concern performed well above average.
– Chemical footprint measurement is new and challenging: Before they can reduce their chemical footprints, companies need to know the chemical ingredients in their products and identify chemicals of high concern, so it’s no surprise that in this first year, companies scored low for measuring baseline chemical footprint.
The Chemical Footprint Project (CFP) was launched in 2014 with the support of investors representing $2.3 trillion in assets under management and institutional purchasers with over $70 billion in purchasing power.Similar to carbon footprinting, the project applies clear and consistent metrics to help purchasers select suppliers based on how they manage their chemical footprint. These metrics also enable investors to integrate chemical risk into their sustainability analyses and investments.
“You can’t manage what you don’t measure,” said Dr. Mark Rossi,Executive Director of the nonprofit Clean Production Action and one of the project’s founders. “By scoring companies on their overall progress in avoiding Chemicals of High Concern and using safer alternatives, the Chemical Footprint Project fills a critical missing piece in the sustainability mosaic for investors, purchasers, and other stakeholders.”
Companies participating in the survey see not only an opportunity to improve their performance on environmental measures, but ultimately to reap business benefits like increased sales and market share, higher rates of customer loyalty and employee satisfaction, and lower compliance costs.
Levi Strauss & Co. (LS&Co.), for example, “is committed to working with our suppliers and others to identify better alternatives when it comes to chemicals,” says Bart Sights, Vice President, Technical Innovation for LS&Co. “We believe that innovation in this realm, both on our own and together with our garment manufacturers and chemical suppliers, presents significant business opportunities, as well as huge potential for advancing environmental sustainability in the apparel industry.”
For purchasers, the CFP provides a common standard that enables them to consistently evaluate suppliers, helping them to meet sustainability goals and providing a solid basis for side-by-side comparison.
“Our commitment to the Chemical Footprint Project furthers our mission of improving quality of life for our patients, staff, and the communities we serve,” says Mary Ellen Leciejewski, Director of Ecology at Dignity Health, a CFP signatory.
The CFP also gives investors an invaluable new tool to help them discern which firms bear the highest chemical risk and which are best positioned to capture new markets with safer products.
“As a strong supporter of the Chemical Footprint Project, Trillium encourages investors to demand and companies to provide consistent, transparent, data on their use of hazardous chemicals,” says Matthew W. Patsky, CEO and Portfolio Manager at Trillium Asset Management. “Integrating this information into our investment processes will help identify industry leaders and reduce company specific risk in our portfolios.”
The Chemical Footprint Project results provide a window into how companies manage the financial liabilities of: Regulatory risks (costs of current and future regulations); Reputation risks (costs of being exposed publicly with hazardous chemicals in products or supply chains); and Redesign risks (costs related to not redesigning or reformulating products before regulations change or markets shift). The report concludes that reducing chemical risk is challenging and requires leadership, training and incentives for employees and suppliers, and investment in data management systems. While these changes may initially be resource-intensive, they can result in great increases in customer trust and loyalty and open up many new business opportunities, especially for companies that sell directly to consumers.
Beautycounter, the skin care and cosmetics company, models how to reduce chemical risks. “Our 5 Step Ingredient Selection Process, which includes rigorous hazard screening criteria and disclosing all chemical ingredients, positions us to use the safest and healthiest ingredients in our products,” highlights Mia Davis, Head of Environment, Health and Safety at Beautycounter.
About the Chemical Footprint Project
The Chemical Footprint Project was founded by the environmental non-profit Clean Production Action, the research institute The Lowell Center for Sustainable Production at the University of Massachusetts Lowell, and the sustainability consultancy Pure Strategies. Itsmission is to transform global chemical use by measuring and disclosing data on business progress to safer chemicals.
The CFP aims to:
– Establish a common metric for assessing progress to safer chemicals,
– Bring transparency to chemicals management practices, and
– Benchmark company performance.
Clean Production Action is an environmental organization that advances safer alternatives to toxic chemicals through its GreenScreen and BizNGO programs. GreenScreen is a chemical hazard assessment method and BizNGO is a unique collaboration of businesses and NGOs working together to promote safer chemicals and drive innovation into and across supply chains and government regulations.
The Lowell Center for Sustainable Production is a research institute that works collaboratively with citizens, workers, businesses, and governments to create healthy work environments, viable businesses, and thriving communities that support sustainable production andconsumption.
Pure Strategies is a leading sustainability consultancy that helps companies improve environmental and social performance through green product design and production, sustainable materials, strong community relationships, and transparent measures of progress.
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