Other companies MSCI has classified as proactive innovators are Apple, Dell, Nike, Adidas AG, L'Oréal SA, Gap and Hennes & Mauritz AB (H&M). "Asset managers tend to concentrate on identifying the innovators, but we think they should also be concerned by the laggards," says Marques. MSCI has found that companies with large, complex portfolios-including Target, Carrefour SA, Procter & Gamble and Henkel AG-are likelier to take a more reactionary approach.
Marques thinks there are a couple of reasons that P&G has removed substances banned in the EU only from the products it sells there. First, household and personal products may look the same in different markets but are developed, designed and manufactured locally with formulas altered according to local consumer taste and other factors such as water hardness. Second, safer alternatives to chemicals banned in the EU may not yet be available in large volumes or at a reasonable price in other markets.
In general, Marques hopes to see better disclosure of chemical management. "Companies are disclosing more and more information in this area, yet the overall level of transparency remains poor," she says.
Liroff thinks U.S. retailers should study the chemical management initiatives being taken by such European-based retailers as M&S, H&M and Alliance Boots, a pharmacy-led health and beauty group. What happens in Europe can come here, and companies entering Europe must be able to compete against the likes of them, he says.
Smaller companies can collaborate through industry coalitions to better manage their supply chains, say Liroff and Joel Tickner, director of the Lowell Center for Sustainable Production at the University of Massachusetts Lowell. "Footwear and apparel has been doing some amazing work in collaborating supply chains," says Tickner, who notes that a half dozen brands, including Nike, are working with Greenpeace toward zero discharge of hazardous chemicals. Consumer electronics manufacturers are also doing a good job with chemical policies and management, he says.
The Green Chemistry & Commerce Council (GC3), a business-to-business forum that's a project of the Lowell Center, has received very positive response to its retailer portal. Tickner says the portal, accessible through the GC3 Web site, is a great starting source of information for retailers to learn what types of tools, support and programs exist.
Turning Up The Heat
Shareholders have also been pressing companies to improve their chemical management policies. Last October, Boston-based Trillium Asset Management LLC sent a letter to Newell Rubbermaid asking about brominated flame retardants (BFRs) in its Graco brand children's car seats. It filed a shareholder proposal in November after failing to receive a response, and then withdrew that proposal following a good dialogue with the company in December and January.
"Shareholder proposals have a way of getting noticed in the same way that shareholder letters seem to get lost," says Jonas Kron, vice president with Trillium and a member of its advocacy team.
BPA has also been a hot issue for Trillium. This year, it filed a resolution with Panera Bread Co. regarding BPA in its thermal receipt paper, which it withdrew after receiving commitments from the company. Resolutions it co-filed with Coca-Cola about BPA in aluminum can linings received a significant 22% of the shareholder vote in 2010 and 26% in 2011.
Apple agreed to phase out some toxic chemicals in its products after Trillium filed (and then withdrew) a shareholder proposal in 2007 asking the company to consider the feasibility of eliminating "persistent and bioaccumulative chemicals," BFRs and PVC plastics from all its products. More toxic chemical resolutions and their outcomes are posted on the IEHN Web site.