Brands should take note of a new retail sustainability trend that responds to growing consumer demand for healthier products and full ingredient disclosure.
Major retailers are increasingly adopting policies that restrict the use of hazardous chemicals in the products and packaging they buy and sell, as well as across their global supply chains. This trend unleashes new opportunities for innovation and business development for suppliers of reformulated products and packaging that rely on more sustainable chemistry and materials.
With great market power comes great responsibility
Scientific evidence implicates products and packaging as a daily source of human exposure to toxic chemicals linked to chronic disease, disability and early death. Yet, the federal government is rolling back regulation of those products and putting chemical industry staff in charge of government programs that are supposed to protect our families from chemical hazards.
It’s incumbent on major retailers to step up and fill this major regulatory void to protect consumers and meet the rising consumer demand for safe and healthy products. Retailers have the power and moral responsibility to eliminate and safely replace toxic chemicals to “mind the store.”
And there is a strong business case to act. Retailers that are not meaningfully managing hazardous chemicals in their supply chains face major reputational, legal, financial and regulatory risks that can be costly to their bottom line. Brands that don’t respond to retailer calls for safer chemistry may lose market share to competitors that do.
Benchmarking retailer progress towards safer chemicals
The customer is always right
And these days, more and more customers are demanding sustainable products! Hear the latest insights on consumer engagement and changing preferences from BBMG, DoSomething.Strategic, J. Walter Thompson and more, as well as the brands leveraging them most effectively.
Over the past few years, our campaign’s report Who’s Minding the Store? — A Report Card on Retailer Actions to Eliminate Toxic Chemicals has set out to evaluate the progress that has been made and challenges that remain in the retail marketplace to address toxic chemicals. In November, we published our third annual report card evaluating the safer chemicals programs of forty of North America’s largest retailers, from major home improvement stores to grocery chains and big box stores.
We benchmark retailers on 14 key criteria that are essential elements of a safer chemicals sustainability program, from whether a company has a robust safer chemicals policy to whether a retailer publicly reports quantifiable reductions and the elimination of harmful chemicals in their products, packaging or manufacturing. On our website, you can download the full criteria, which provide an important framework for best in class approaches for safer chemicals management. It should be on the reading list for every retail sustainability professional.
Retailers are certainly paying attention. Over the past few months, three major retailers — Amazon, Walgreens and Rite Aid — announced safer chemicals policies for the first time ever. It’s no coincidence that these policy announcements came just one month before the release of our 2018 retailer report card.
The three most improved retailers of 2018
By publicly benchmarking businesses, we are driving a race to the top in retail to transform the marketplace to healthier toxic-free products and packaging. For example, the eleven retailers that we scored in the first report card in 2016 have improved their average grade from a D+ to a C+ since then. Another eighteen retailers first graded in 2017 bumped up their grade from D to a D+ over the past year, on average. 21 out of the 29 retailers (72 percent) that were evaluated in both 2017 and 2018 improved their score over the last year.
We found that Walgreens, Rite Aid and Amazon were the most improved retailers, with each adopting sweeping chemicals policies between September and November 2018.
Let’s take a look at the policies of all three retailers and how they and other businesses can continue to improve.
Amazon launches new policy to restrict toxic chemicals
In early October, Amazon launched a new chemicals policy, making a significant improvement compared to our first evaluation of the company in 2016, when it earned an F. This year, Amazon earned a grade of C, scoring 51.75 out of 135 possible points and ranking 14th in overall points scored among 40 retailers.
Amazon’s new chemicals policy includes a Restricted Substance List (RSL) targeting 54 chemicals of concern such as phthalates for elimination in Amazon private-brand baby (shampoo, lotion, wipes), household cleaning (all-purpose, kitchen, and bathroom cleaners), personal care (shampoo, sanitizers, moisturizers) and beauty (make-up) products. The company is working to phase out chemicals that are carcinogens, mutagens, reproductive toxicants, PBTs (persistent, bioaccumulative and toxic) and other systemic toxicants. Amazon noted that it began its reformulated efforts with private brand products since it has the most control over these products.
The policy does not yet address other private-brand or brand-name products on Amazon.com, though the company stated that it will work to add additional product categories and “work to achieve fuller ingredient disclosure on its Private Brand product detail pages” in 2019.
On transparency, the policy states: “Our goal is to make product health and sustainability data as easy for customers to access and interpret as price and customer reviews. This is why we are working on website features that will make it easier for customers to access comprehensive information about product ingredients and third-party certifications. We hope that making this information more readily available for customers will encourage additional brands to move away from potentially hazardous chemistries in their products and adopt safer chemistries.” Amazon cites Safer Choice, Made Safe, Green Seal and Cradle to Cradle as examples of third-party standards it is focused on.
Since the company launched its chemicals policy, it went even further by globally banning the sale of all deadly paint strippers containing the hazardous chemicals methylene chloride and NMP, becoming the 11th North American retailer to do so in 2018. And more recently, Amazon subsidiary Whole Foods has taken initial action on toxic PFAS in food packaging, following a report we published that found these chemicals hiding in takeout containers and other food contact materials.
Rite Aid doubles its score in one year
In 2018, Rite Aid earned a letter grade of B+, scoring 81.5 out of 135 possible points, ranking seventh out of 40 retailers in overall scoring; it more than doubled its 2017 score of 36.5 points.
In 2017, Rite Aid staff disclosed to us that the company was beginning to develop a safer chemicals program that included a Beyond Restricted Substances List (BRSL) applying to several chemicals of high concern (CHCs) in its private-label products. Rite Aid’s goal was to eliminate these CHCs from its formulated private-label products by 2020.
Rite Aid significantly improved its grade this year by adopting a new safer chemicals policy and a significantly expanded RSL in September 2018, developing a range of accountability measures, reporting continued progress on eliminating CHCs from its products, and stating an explicit preference for ingredients on the EPA Safer Chemical Ingredients List.
Rite Aid has set public, quantifiable goals for reducing and eliminating CHCs in its products. Its policy states: “In 2016, Rite Aid committed to eliminating eight chemicals of high concern from its own-brand formulated products by 2020. These chemicals include: triclosan, formaldehyde, toluene, butylparaben, propylparaben, diethyl phthalate, dibutyl phthalate and nonylphenol ethoxylates.” The company also states that it is expanding its RSL to include 69 chemicals total, will expand its policy to apply to brand-name formulated products and will encourage suppliers to avoid ingredients not just on its RSL, but on the six authoritative lists on the BPC stewardship list, which is made up of thousands of chemicals of concern. The company plans to eventually extend its chemical policy to cover all of the products sold in its stores.
Rite Aid also reports on metrics in implementing these efforts. In September 2018, the pharmacy chain stated: “The number of suppliers producing own-brand products for Rite Aid that contain these [initially listed CHCs] has dropped by 64 percent.” The company went on to state the number of own-brand products containing any of these initial restricted chemicals has decreased by 54 percent, and it is on track to meet its elimination commitment by 2020. Rite Aid plans to begin reporting additional metrics starting in 2019, particularly progress towards the 100 percent elimination goal and the number of new products launched in a year that are free of the initial eight CHCs.
In its 2018 policy, Rite Aid states that it will also encourage suppliers to publicly disclose all ingredients online or on pack, including the constituents of fragrance and other generic ingredients.
Walgreens eliminating key toxic chemicals by end of 2021
Walgreens earned a B- grade, scoring 70.5 out of 135 possible points, and ranking eighth out of 40 retailers. This represents a significant improvement from 2017, when it received a D-.
The company’s improved score is due to the release of its new safer chemicals policy, including public, quantifiable goals and a public RSL. As an initial step, the policy applies largely to private-label products in the baby, beauty, personal care and household cleaning categories. Walgreens has set a goal of eliminating all of the chemicals on its RSL in these products by the end of 2021 and has already made strides in reformulating sunscreens so that a majority of the formulations do not contain two chemicals of concern. The company also created a list of chemicals that it is monitoring and “over time…looking to restrict and/or minimize across [its] product portfolio.”
The company also requires private-label suppliers to disclose all intentionally added ingredients, including fragrance components. Suppliers are encouraged to look to EPA’s Safer Chemical Ingredients List in finding safer alternatives and to obtain third-party safer chemicals certifications for their products.
In its policy, Walgreens states: “In moving to eliminate [CHCs], we encourage suppliers to select ingredients identified as Safer Chemicals by the U.S. Environmental Protection Agency (EPA) Safer Choice program, or to use EPA Safer Choice criteria or ChemSec safer alternatives marketplace to evaluate and select safe substitutions.”
How Amazon, Rite Aid and Walgreens can continue to improve
While all three retailers have made notable progress, there are still opportunities for improvement, which also rings true for other top retailers. Here at some ways each of the retailers can improve their chemicals management policies and implementation plans in the year to come:
Amazon should set clear public timelines for reducing, eliminating and safely replacing chemicals on its new RSL, and should publicly report on metrics in implementing it annually. In 2019, Amazon should expand its chemicals policy to other chemically intensive private-label product categories — particularly electronics, apparel and food — and establish goals and timelines to restrict toxic flame retardants, phthalates and PFAS chemicals in these products, packaging, food service ware and supply chains. The company should also expand the policy to restrict highly hazardous chemicals in brand-name products sold on Amazon.com, and expand the scope of its RSL for private-brand formulated products to apply to the same categories of brand-name products sold on Amazon.com.
Rite Aid can make more progress by setting public quantifiable goals for reducing and eliminating all chemicals on its expanded RSL, and on the six authoritative lists that make up the BPC stewardship list for both private-label and brand-name products. Rite Aid can also improve by requiring suppliers to conduct alternatives assessments to avoid regrettable substitutions.
Walgreens can improve by strengthening accountability measures, including conducting its own testing and requiring suppliers to test in third-party approved laboratories. Walgreens should also expand the scope of its policy beyond the categories currently covered and require suppliers to conduct alternatives assessments to avoid regrettable substitutions. One low-hanging fruit opportunity for Walgreens would be to stop selling lead-based hair dyes, which you can still find on the company’s website.
All three retailers should also become signatories to the Chemical Footprint Project and pilot it with key private-label suppliers.
We are excited to see how each of these companies continues its journey to safer chemicals. We are looking forward to seeing how they consider our recommendations and improve and expand their policies in the year ahead.
Retailers must step up in 2019 to meet consumer demand
In the year ahead, we expect other major retailers to join this growing trend and develop comprehensive policies to address toxic chemicals. We urge all retailers to adopt safer chemicals policies, fully disclose the ingredients of their products and packaging, and substitute hazardous chemicals with safer solutions. They can get in touch with us to learn how to get started.
With a federal government that’s failing to protect us from dangerous chemicals, it’s time for retailers and brands to leverage their market power and influence to drive the development of safer chemistry solutions and products.