In the first initiative of its kind to publicly benchmark corporate chemicals management, the Chemical Footprint Project has 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 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; California Baby and the Zero Discharge of Hazardous Chemicals group, 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:
“First came carbon, now it is time to measure the corporate chemical footprint. This is the obvious next step in sustainable business practice,” says Sonja Haider, Senior Business and Investors advisor with the NGO ChemSec, one of the contributors to the project. “Publishing the chemical footprint will close a gap in sustainability reporting, something really sought after by investors and it will help purchasers find the best suppliers.”
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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.
The CFP aims to:
- Establish a common metric for assessing progress to safer chemicals,
- Bring transparency to chemicals management practices, and
- Benchmark company performance.
“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 can not only improve their performance on environmental measures, but reap business benefits such as increased sales and market share, higher rates of customer loyalty and employee satisfaction, and lower compliance costs.
Levi Strauss, for example, “is committed to working with our suppliers and others to identify better alternatives when it comes to chemicals,” says Bart Sights, VP of Technical Innovation. “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 strong supporters 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.
Skincare and cosmetics company Beautycounter 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.
Consumer concern about chemical safety and transparency, particularly in apparel and personal care and household products, has erupted in recent years, leading to multiple campaigns and even a documentary called STINK!, released in December. A number of companies — including Target, Clorox and SC Johnson — have taken it upon themselves to publish their complete ingredient lists and eliminate certain hazardous chemicals from their products. In October, the Environmental Working Group (EWG) launched a verification program to help consumers quickly and easily identify consumer goods that do not contain toxic ingredients and that meet criteria set by EWG scientists. Last month, EWG announced that over 125 cosmetics and personal care products from 14 brands now bear the EWG VERIFIED: For Your Health™ mark.