RETAILER PRESSURESDR. JACK LINARDUNILEVER

PCPC Science Forum20 October 2015

Discussion Topics

• Retailer Sustainability: Origins• Retailers

• Mind the Store• The WERCS

• Examples of Initiatives• Walmart’s Sustainability Index/Sustainability Leaders• Target Sustainable Product Index

• State Initiatives• Positive News• Conclusion

Fortune, 31 July 2006

10 Years Ago, this month….

• Lee Scott Announced Walmart Sustainability Goals• to be supplied with 100% renewable energy, • to create zero waste, and • to sell products that sustain people and the environment.

• "We're not going to spend our time arguing about what our goals are. Here's clearly what we ought to be doing. Here's what the end game should be.“

• Scott faced disapproval from both inside and outside the company. • "Well, the great thing about a business is, it's not a democracy," • "So people can have a say, but they don't necessarily get a vote. The board gets a

vote."

• Scott credits many of Walmart's working groups with shining the spotlight on valuable internal talent, which had a compound effect of helping to shift the culture to one that embraced sustainability. • "All of a sudden, people in the company are looking and saying, 'Wow, the people who

are involved in sustainability are getting promoted!'"

• Walmart• Kroger• Target• Walgreens• Costco• The Home Depot• CVS Caremark• Lowe’s • Best Buy• Safeway

NGOs Focus : Retailers

NGOs Focus : Retailers

• NGOs have focused for several years on state governments• Implementing regulations far faster than for Federal Government

• A ban of a chemical in one state will have a knock-on effect of banning it on a national basis

• States have taken too long to enact chemical management regulations NGOs focusing on retailers

• Retailers, led by Walmart, are reacting to the NGOs campaigns by questioning the need for these materials

Messaging by NGOs

• Their Agenda:

• Typical Messages:• Eliminate Toxic Chemicals from All Products, regardless

of Exposure or Level in the product

• Target Chemicals include preservatives, phthalates, antibacterial agents, contaminants• Synthetic chemicals, especially those made from

petroleum, are undesirable

Mind the Store: “The Hazardous 100”

Other chemicals listed include:- Dioxane, - Formaldehyde Donors, and - Estragol

Retailer’s Process

• Limited opportunity to provide comments on proposals

• Potential for Unintended Consequences

• Helps Retailers meet their “Sustainability” goals

Q: Where do Retailers get information?A: The WERCS

• UPC/DPCI/GTIN

• Product Formulation• Include all ingredients or components• Chemical name, CAS No., % present per ingredient

• Physical Properties (e.g., pH, Flash Point, Boiling Point, etc.)

• EPA and State Pesticide Registration Data, if applicable

• Transportation Data for Ground, Air, Rail and Water

The WERCS: What Retailers See

• Basic Information• VOC % by Weight (if applicable)• Global Chemical Inventory Status Indicator by Organization• Bi-Lingual / Safety Summary Sheet PDF (MSDS.PDF)• Hazardous Waste Codes, including RCRA and applicable State

codes• Transportation Classifications for All Modes

• Safety Summary Sheet• One page document used for internal hazard communication. • Health, safety, first-aid, and handling information present in a

standardized format • Sustainability Graph

• Maps impact of the product against environmental and health risks and hazards

Who uses The WERCS?

Walmart’s Initiative

Wal‐Mart requiring manufacturers to phase out 10 undisclosed substances 

Walmart’s Sustainability Index

• Central to Walmart’s ability to deliver sustainable products• Launched in 2009 in collaboration with The Sustainability

Consortium (TSC)

• Over the past two years, TSC significantly expanded the categories covered by the Index

• Tools are to be developed by TSC to show suppliers how to improve Index scores by addressing • Key hot spots • Drive efficiency • Reduce waste

Walmart Sustainability Leaders

• “Makes it easier to find products made by companies that have scored as best in class in Walmart’s Sustainability Index.”

• “Customers shouldn’t have to choose between affordability and sustainability….”

• >10,000 items made by companies identified as leaders in a category (like televisions or plastic toys) through the Walmart Sustainability Index are marked with Sustainability Leaders badge.

• Does not make representations about the environmental or social impact of an individual product

• Indicates that the manufacturer has scored well enough to earn a badge across all of the products they make in that category.

Target Sustainability Initiatives

Target Sustainability Initiatives

Target Sustainable Product Index

• Goal: Expand selection of wellness and sustainable product choices that effectively balance price, performance, convenience.

• Sustainable Product Index assesses products on ingredients, transparency, minimal environmental impact, certification and key issues within product categories. • UL PurView Platform collects information to evaluate products

• Key components to the index are: • Chemicals of concern• Packaging• Third-party certifications• Transparency in the personal care, beauty, household cleaning, baby care

product and feminine care categories

Target Sustainable Product Index-Primary Criteria• Product developed with human health in mind (70 points Total)

• 50 Points: Ingredients• Zero points--one or more ingredients on one of Target's designated high level health

concerns authoritative lists. • 50 points--no ingredients on the high level health concerns lists and no generic

ingredients. • 20 Points: Transparency

• 20 points--ingredients are listed on packaging and website, ingredient purposes are listed on website and there are no generic ingredients.

• Minimal Environmental Impact: A product has been developed with the environment and community in mind (30 points Total)• 20 Points: Packaging

• Product's packaging sends minimal, if not zero, waste to landfill. • 20 points--How2Recycle labeling present on packaging, which exhibits at least one

sustainable attribute & reduces at least one environmental impact as per Global Protocol on Packaging Sustainability 2.0.

• 10 Points Total: Water Quality and Animal Testing

• Product Certifications (15 Points Total)

Target Sustainable Product Index-Primary Criteria• Product developed with human health in mind (70 points Total)

• 50 Points: Ingredients• Zero points--one or more ingredients on one of Target's designated high level health

concerns authoritative lists. • 50 points--no ingredients on the high level health concerns lists and no generic

ingredients. • 20 Points: Transparency

• 20 points--ingredients are listed on packaging and website, ingredient purposes are listed on website and there are no generic ingredients.

• Minimal Environmental Impact: A product has been developed with the environment and community in mind (30 points Total)• 20 Points: Packaging

• Product's packaging sends minimal, if not zero, waste to landfill. • 20 points--How2Recycle labeling present on packaging, which exhibits at least one

sustainable attribute & reduces at least one environmental impact as per Global Protocol on Packaging Sustainability 2.0.

• 10 Points Total: Water Quality and Animal Testing

• Product Certifications (15 Points Total)

New “Target” Chemicals onSustainable Product Index

• 600 substances on Health Canada’s roster of prohibited cosmetic ingredients identified• Coal tars, Bisphenol A, Triclosan

• Target:• Made the changes earlier this year without publicizing• Isn’t prohibiting the ingredients outright• May help promote complying products or give them more shelf space.

• Safer Chemicals, Healthy Families plans to spotlight the list

State Initiatives

• Washington State: Specified “Chemicals of Concern” in children’s products must be reported

• Parabens are on the list

• Maine: None of the listed “Chemicals of Concern” are in our products [yet]

• Minnesota:• Formaldehyde Donor Ban Enacted in Products Marketed to Children <8 Years old;

effective 1 August 2014 with 1 Year Sell-through• Bill Amended May 2014 to allow up to 0.05% Free Formaldehyde; same

amendment banned several uses of Triclosan

• Massachusetts: Toxics Use Reduction Act passed in 1989

• California: Final Safer Consumer Products Regulation published• Three Products with Chemicals of Concern nominated for Alternative Assessment

Process: None are personal care• Personal Care Products named as one of the next 7 product categories to be

considered in next round of product nominations• First Alternative Assessment Guidance Document available for comments.

Vermont: Chemicals of High Concern in Children’s Products

• Reporting Requirement, similar to Washington State• All chemicals in children’s products above the Practical

Quantification Limit (PQL) must be reported by July 1, 2016• Key Ingredients and PQL’s

Ingredient PQL (ppm)Formaldehyde 1Methylparaben 30Ethylparaben 30Propylparaben 30Butylparaben 30BHA 10

Positive News: Danish EPA

• “Based on the environmental and health screenings the following 5 were investigated: DMDM hydantoin, imidazolidinyl urea, zinc pyrithione, thimerosal and phenoxyethanol.

• “The study showed risk of allergy using: DMDM hydantoin, imidazolidinyl urea and thimerosal; it was impossible to set a maximum concentration limit value and to calculate a risk

• “Furthermore the risk assessment showed that use of the products is safe, at the maximum allowed concentration of the 5 preservatives too.”

More positive news for preservation…

• Beauty and Personal Care Summit• Sponsors: Walmart, Target, Forum for the Future

• NGO’s, Academics, Government Officials, Standards Organizations, Personal Product Manufacturers, Chemical Companies represented• September 4, 2014, Chicago• March 25, 2015, Brooklyn

• The need for new preservative systems was a key conclusion• Forum for the Future is continuing to engage all parties• Green Chemistry and Commerce Council will be a major

player going forward• Environmental Defense Fund is also evaluating preservatives

More positive news for preservation…

GC3 Preservatives Program

Conclusions

• Industry is engaging to show the importance of each ingredient and the consequences of removal• Risk assessment as the best tool to evaluate product safety• “Unintended consequences” must be avoided

• Preservation is a key component of assuring retailers and consumers that our products are safe to use, over the life expectancy of the product• The science community must continue to stress that microbiological

safety is a key attribute of any product• “Preserving the Palette” is necessary in the short term, but• Development and evaluation of new preservation ingredients,

technologies, and strategies must be considered• What new innovations can we invent to effectively & safely preserve our products?