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Detoxifying Corporate America
Joel Makower, 12 Mar 06

The U.S. Environmental Protection Agency last week unveiled its latest initiative to persuade American companies to reduce their use of chemicals it considers to be "persistent, bioaccumulative, and highly toxic." It's a timid goal, to be sure -- a 10% decrease in these substances over 10 years -- but a significant indicator that corporate toxic emissions don't exactly fall into the What Me Worry? category, as many companies would like us to believe.

EPA bills its National Challenge Commitment for Priority Chemicals as a "collaborative initiative to shrink industrial use of 31 priority chemicals." They include heavy metals like cadmium, lead, and mercury, and a witch's brew of solvents, insecticides, herbicides, biocides, and things fall into categories with benign-sounding names like "aromatic hydrocarbons" and "byproducts."

The "challenge" is exactly that -- a voluntary initiative to entice companies to "reduce the use of priority chemicals in products and waste." It's not the first time the government has taken this route -- one of the most effective early environmental programs, in the late 1980s, was dubbed "33/50," which targeted 17 priority chemicals and set as its goal a 33% reduction in releases and transfers of these chemicals by 1992 and a 50% reduction by 1995, measured against a 1988 baseline. The 33/50 Program achieved its goal in 1994, one year ahead of schedule.

The 33/50 program typified how government likes to do things these days -- it emphasized simplicity and flexibility, and allowed companies to set their own reduction goals and to achieve them in ways they felt made the most sense for their specific manufacturing operations. It's a carrot-and-stick approach, though neither the carrot nor the stick represent much of substance: Companies don't receive much more than attaboys for signing on and meeting the program's goals -- and receive little or nothing by way of punishment if they don't.

And yet, this is what passes for progress these days.

But nowhere near the progress some companies are making on their own in cleaning up toxic emissions -- not simply to be good guys, but to reduce their costs, liabilities, and exposure to activist and shareholder pressures. And, in some cases, to meet their customers' growing demands for less-toxic or nontoxic alternatives to business as usual.

A few trends and data points help to illustrate the current landscape:

  • New studies are showing that toxic chemicals are accumulating in human fat tissue, and are found in mothers' breast milk, blood, and urine at rates never before seen. As scientists have refined their biomonitoring techniques, they have sounded the alarm about the effects of low doses of common chemicals on everything from autism to cancer. For example, recent reports on flame retardants show that levels of these neurotoxins are now present in humans at unprecedented levels.

  • Regulators in Europe and at the state and local levels in the U.S. are passing laws that variously ban specific chemicals in products, or give procurement preference for government purchases of goods using fewer or no chemicals of concern. Some regulations -- notably, the European Union's REACH initiative -- require companies to make public much more data than are currently available about the toxic ingredients of their products.

  • Investor groups, especially pension funds, are beginning to partner with activist environmental and health groups to demand greater accountability in companies' management of toxic materials. Shareholder resolutions on the topic used to be limited to major chemical companies, but are now showing up at annual meetings of companies selling everything from cosmetics (Avon) to computers (Apple).

  • Customers, especially at the supply-chain level, are becoming more proactive in limiting or banning certain ingredients from the products and materials they buy. Companies are variously using blacklists, graylists, and greenlists to determine desirable and undesirable chemicals. A few have systems in place that measure and track the steady decline of undesirable chemicals from their purchases.

  • Consumer concern is growing, too. A survey by Harris Interactive released last year found that a majority (58%) of U.S. adults believe that chemicals and pollutants are more of a threat to people like them now than they were 10 years ago. Six in 10 adults reported having taken one or more steps to reduce their exposure to chemicals or pollutants, such as buying natural or biodegradable products, purchasing organic produce, purchasing chemical-free paints or furnishings, or having their homes tested for any of several indoor pollutants.

Much of this is not new. Concern over the environmental and public health impacts of toxic chemicals go back to Rachel Carson, DDT, dioxins, and PCBs. What's new is the confluence of concern among various stakeholders, the increased scrutiny and activism taking place around the globe, and the breadth of companies and sectors affected. Indeed, it's no longer just chemical companies, or even just manufacturers. Every consumer product company is fair game.

Dr. Richard A. Liroff, a senior fellow at the World Wildlife Fund in Washington, D.C., cites several companies that have begun to systematically review chemical use and to reduce or eliminate more problematic ones. Some examples:

  • Chiquita Brands has made a commitment to certify all its farms in Latin America using a program that requires steady reductions in agrochemical use, based on analyses of soils, plants, and insect populations.

  • Fujitsu is evaluating and aims to reduce the annual use by its facilities of approximately 70 chemicals that Japan's Ministry of Environment has designated as exerting potentially harmful endocrine effects.

  • Gerber has a goal of no detectable pesticide residue in its baby food and has implemented a comprehensive pesticide reduction program, beginning in the farm field and ending in baby food preparation.

  • Nike is working to identify and eliminate chemicals known or suspected to have adverse effects on human health or biological systems and is targeting them for replacement. It is creating a "positive list" of preferred substances and is working with vendors to establish replacement guidelines.

  • Samsung began in mid-2004 to conduct an inventory of chemicals and to formulate a substitute development program with targeted phase-out dates, including taking into account suspected-but-not-definitively-proved links between chemical causes and health effects.

True, not all these companies acquired their nontoxic mantras willingly. Some were prodded or pushed by activists, but others launched initiatives as part of their proactive corporate cultures. How they came to address toxics matters little. What's significant is the path they are forging for themselves, and all that follow.

The gold standard for all this, says Liroff, has been set by SC Johnson -- the producer of such venerable consumer brands as Glade, Pledge, Raid, and Windex, which has taken aggressive measures to reduce the toxic ingredients of its products and processes.

The centerpiece of SCJ's efforts is its Greenlist, which classifies all of the ingredients of its products into a simple scale: 3 for "Best," 2 for "Better," 1 for "Acceptable," and 0 for "Restricted Use Material." Aggregate scores are derived based on the weight of the screened materials the company purchases. So far, the company has conducted screenings for the 15 material categories that constitute 95% of its raw materials purchases, including surfactants, solvents, propellants, insecticides, resins, and packaging. All of SCJ's new or reformulated products must go through the Greenlist process.

In creating Greenlist, SCJ opted for a pragmatic approach: "The data had to be readily available," David C. Long, Sustainable Innovation Manager in the company's Global Environmental and Safety Actions department, told me last year. "We didn't want to ask our suppliers to generate data that would cost them millions of dollars. We asked them for information that was readily available." SCJ supplemented that information with pubicly available resources, such as the U.S. EPA's ECOTOX database.

The goal of Greenlist is to continually ratchet up overall scores by reducing or eliminating low-scoring materials. When the first assessments were conducted, during 2000-01, the average score was 1.2 (out of a perfect score of 3.0). Long says he expects the current (2004-05) average to be about 1.4 -- roughly the goal SCJ had set for itself for 2007-08; now he's in the process of resetting that goal.

Greenlist has provided other benefits, says Long. "We have been very successful at looking at how we can be innovative in our product formulating by putting in better chemicals. In some cases, we find synergies with other raw materials so we get better cleaning with fewer raw materials. Sometimes we find raw materials that are less expensive."

For example, in reformulating a concentrated floor cleaner sold in Chile, SCJ was able to replace seven restricted materials with ones that were biodegradable and VOC-free. The reformulated product cleaned better, was less expensive to manufacture, and -- because SCJ has a rule that it won't export a formula with restricted use materials beyond the country where it's manufactured -- the new product could be rolled out to new markets.

Last year, SCJ formalized Greenlist into project team success criteria, alongside such conventional metrics as sales, performance, and marketing. Up to now, SCJ's environmental success criteria focused primarily on global regulatory compliance. Now, success includes using Greenlist to determine whether tomorrow's products will be greener than today's.

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Comments

...And Bush was saying something about implementing "zero emission coal power plants" or so. Yeah right.


Posted by: Energy on 13 Mar 06

Your post seems to vacillate between being angry at the lack of iron-handed regulations by the government and being thrilled by the enormous amount of stuff corporations will do on their own if you ask them nicely and put them in a reasonably well-educated market economy.

For all the criticism of these types of programs as not using the full force of regulation and realpolitik, the evidence seems to be that they actually do work fairly well.

Why do you think this is? Have you ever considered that people who run these corporations are not actually evil? That those who administer and work at these plants, often in small towns far from cities, generally live in the area? That they have a vested interest in actually finding out how toxic these chemicals are, since they are exposed to them every day?

It seems obvious to me that if things get worse, it is possible to use these laws. By worse I don't mean we can see what's happening to us better (as in your post) but rather that we measure the outputs of industrial amounts of toxic chemicals into the environment, and they are growing, then there would be clear reason for the government to step in. Without evidence, reason cannot help but be hijacked by ignorance and fear.


Posted by: Ben Hunt on 13 Mar 06

Yeh, and we are going to solve global warming on a voluntary basis, too.


Posted by: t on 13 Mar 06



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