Consumers want to know that the products they buy contain ingredients that are safe for them and their loved ones. EDF has identified five pillars of leadership to help companies meet that demand and in doing so build consumer trust in the products they make and sell. One company that has recently taken major steps to drive safer chemicals and products into the market is Walmart.
In 2013, Walmart published its Sustainable Chemistry Policy, which focuses on ingredient transparency and advancing safer product formulations in household and personal care products. EDF worked with Walmart as it developed its policy and has advised the company during implementation and data analysis. This past April, Walmart announced that the company achieved a 95% reduction in the use of high priority chemicals of concern. Now, Walmart has shared considerable additional information detailing the progress made, including the identities of the high priority chemicals.
In our previous blog, we broke down the wealth of information that Walmart has shared. However, to fully evaluate the significance of the numbers, we now look at how well Walmart has done against EDF’s five pillars: institutional commitment, supply chain transparency, informed consumers, product design, and public commitment.
EDF’s Leadership Pillar 1: Institutional Commitment
What it is: Successful outcomes require commitment and support from leaders across the organization – from the C-suite to middle management. The most effective tool in building Institutional Commitment is a written corporate chemicals policy that articulates to all levels of the organization, as well as to business suppliers, what the company wants to achieve.
What Walmart did right: Walmart has done a great job at building a foundation for Institutional Commitment. It spent several years developing and operationalizing a comprehensive corporate chemicals policy that contains specific goals and timelines focused on transparency and safer products. In the subsequent release of its policy implementation guide in 2014, Walmart went further by providing guidance to suppliers on how to adhere to the policy. They also pledged to measure progress using a list of specific metrics, including the mass of high priority chemicals (HPCs) and number of products containing HPCs.
These are key elements of quantifying one’s chemical footprint, defined by the Chemical Footprint Project as “the total mass of chemicals of high concern in products sold by a company, used in its manufacturing operations and by its suppliers, and contained in packaging.” Walmart led by committing to measure the portion of its chemical footprint related to the products and priority chemicals covered by its policy.
What Walmart should do next: Walmart’s chemicals policy is limited to the United States and only covers formulated consumables (largely liquids, sprays and gels) sold in the household cleaning, personal care, and cosmetic aisles. We commend Walmart for starting with products that consumers use on and around themselves every day. In the coming years, Walmart should extend its sustainable chemistry philosophy across all products sold and all stores globally.
EDF’s Leadership Pillar 2: Supply Chain Transparency
What it is: A company needs to know the chemicals present in the products it sells. This means knowing all the intentionally added chemical ingredients, including those in mixtures like fragrances, as well as known contaminants that occur in the making of the product. Such information enables the identification of areas of greatest risk, opportunities for action, and a means for measuring and monitoring progress.
What Walmart did right: Walmart required suppliers to submit “full product formulations” – the names and concentrations of all ingredients in a product – to a 3rd party-managed chemicals database called WERCSmart. By doing this, Walmart gained access to aggregate information on the types and quantities of chemicals in the products on its shelves. This enables its policy implementation to be based on real data and for Walmart to be empowered to drive change and measure progress.
Walmart reported that 94% of the product formulations entered into WERCSmart are full formulations. This suggests that the retailer’s chemical footprint calculations are based on complete ingredient information. Walmart has shown real leadership here, proving that you can have greater supply chain transparency while still protecting proprietary information.
What Walmart should do next: Robust data means robust calculations, and robust data relies on transparency – about all intentionally added chemicals and any changes in formulations – along the supply chain from ingredient manufacturers to brand suppliers. Currently, it is unclear how supplier-entered data in WERCSmart is verified for accuracy. Walmart should require suppliers to proactively check that product formulas are up to date and consider introducing sporadic spot-testing of products.
EDF’s Leadership Pillar 3: Informed Consumers
What it is: Sharing ingredient information with consumers is a key part of leadership. It shows that a company embraces and executes on the philosophy that consumers have the right to know what is in the products they buy.
What Walmart did right: Walmart called for online disclosure of all ingredients in the products covered by the policy starting in 2015. According to the results of Walmart’s Sustainability Index, its annual environmental issues survey sent to suppliers, 78% of respondents reported they share ingredient information online for every product they sell globally. As we discussed in a previous blog, Walmart also began disclosing ingredients online for some of its own private brand products in 2015 — a good first step.
What Walmart should do next: Walmart should continue to push itself and its suppliers to bring greater transparency to the contents of their products. Many companies, including Walmart, continue to use generic names in their online disclosure lists, and very few companies reveal the chemicals behind trade name ingredients. EDF's Rules of Online Disclosure provide guidance for meaningful disclosure, and we encourage Walmart to adopt it as the standard for itself and all suppliers.
Walmart states that 87% (by sales) of suppliers covered by the policy (Walmart U.S.) participated in the Index. Walmart should continue to boost Sustainability Index response rates and expand coverage of the Index to all the categories and suppliers covered by the policy.
EDF’s Leadership Pillar 4: Product Design
What it is: Leading on product design means using safer chemicals and phasing out chemicals of concern when manufacturing and selling products. Measureable objectives must be set, a credible and science-driven methodology must be used to assess chemical safety, and a measurement plan implemented to track progress.
What Walmart did right: There are many things Walmart has accomplished here. Walmart’s policy prioritizes safer products for customers by calling for (1) the “reduction, restriction, and elimination” of Walmart’s designated priority chemicals (PCs) of concern, and (2) designing products using “informed substitution principles.” Walmart based its PCs list on 16 reputable regulatory and authoritative lists. Walmart focused its suppliers’ attention on a short list of High Priority Chemicals (HPCs) to catalyze action. These eight chemicals and chemical classes (butylparaben, propylparaben, nonylphenol ethoxylates (NPEs), formaldehyde, dibutyl phthalate, diethyl phthalate, triclosan, and toluene) appear on a number of authoritative lists (e.g. EU REACH Substances of Very High Concern) for their hazardous properties and are worthy of action by Walmart.
Walmart also established and implemented a strong measurement plan, the key metrics being (1) total chemical mass, measured in pounds of PCs and HPCs going out the door, and (2) frequency of use, measured by the number of products on store shelves that contain PCs and the number of suppliers using PCs in their products.
Walmart tracked progress by using aggregate data from RetailLink, its internal product inventory database, and WERCSmart, and will be tracking this information over time. Prompted by what the data revealed, Walmart identified the greatest opportunities to work with specific suppliers to drive progress against its goals. Walmart has made commendable progress in calculating and reducing this portion of its chemical footprint (95% weight reduction in use of HPCs). See our previous blog for additional details.
What Walmart should do next: While Walmart reduced the total mass of HPCs by 95%, these chemicals are still frequently being used across products by many suppliers. Aggregate exposure, which is exposure to the same chemical through multiple sources, and cumulative effects, which is exposure to multiple chemicals that contribute to the same health outcome, pose significant health risks. Creating a healthier marketplace means reducing the total toxic chemical load on people while taking into account varying susceptibilities, vulnerabilities, and co-exposures to diverse environmental stressors (e.g., social, chemical) experienced in the real world.
Walmart can’t solve this alone, but it can act. First, Walmart should talk with suppliers who don’t use HPCs and share their success stories of safer formulations. Walmart can also work with suppliers and upstream manufacturers to identify and find solutions to the issues hindering widespread elimination, such as misaligned incentives or lack of broadly applicable viable chemical substitutes.
Preventing regrettable substitutions – hazardous ingredients getting replaced with other problematic ones – remains a challenge. Walmart’s current tracking of the changing amount of all PCs is a good first step; if this number goes up while the HPCs amount goes down, regrettable substitutions may be occurring. Walmart’s report of a 45% weight reduction in the mass of all PCs is a promising result. The company should continue to track this metric, and investigate any significant increase in the mass or frequency of use of PCs.
Walmart should also meet its pledge to increase private label offerings certified by Safer Choice, a voluntary U.S. EPA program that recognizes and brings consumer awareness to products using safer ingredients. It is the only policy commitment for which no quantitative data was released. As a 2016 Safer Choice Partner of the Year, EDF believes Walmart can join the ranks of other partners, including Wegmans and Albertsons Companies (owner of Safeway, Shaw’s, and Jewel-Osco), who have successfully increased their offerings of Safer Choice products and worked to educate consumers about the program.
EDF’s Leadership pillar 5: Public Commitment
What it is: Effective communication of a company's policy, goals, timelines and progress can garner valuable support from the general public. Telling the story about one’s journey – including the pitfalls along the way – can be just as powerful as sharing success stories.
What Walmart did right: Walmart has shown strong leadership here by publishing its policy, publicly pledging to measure progress, sharing its metrics, and committing to report progress starting in 2016. Walmart has now released a trove of quantitative information, good and bad, and the calculations behind them. This is a first among retailers.
Walmart has also deepened its public commitment by meeting its own call for increased retail transparency by revealing the names of the Walmart High Priority Chemicals. Knowing the identity of the chemicals on which so much action has been focused provides a number of benefits. First, it gives the public a greater understanding of the initial results. Second, it allows Walmart suppliers to point to their own successes in tackling toxic chemicals. Finally, it focuses the market signal for safer solutions around specific compounds.
All in all, by being public about its safer chemicals journey, Walmart is communicating a clear message to its internal business, suppliers, and the public that the company is serious about driving positive change.
What Walmart should do next: We encourage Walmart to keep the momentum going – not only on implementation of its policy but also on publicizing the journey. Publishing progress results annually and sharing the instances of challenges and problem-solving will ensure that Walmart’s leadership continues to resonate with the public as well as provide incentive for other retailers to follow Walmart’s lead.
Conclusion: safer chemicals leadership is achievable
Walmart’s policy is working because it hits on every one of EDF's five pillars of leadership for safer chemicals in the marketplace. Has the company achieved full leadership according to the five pillars? Not quite, but many of the critical foundational pieces (e.g. chemicals policy, measurement system, transparency goals) are in place, suggesting Walmart is well on its way if it can keep the momentum up.
EDF believes that other retailers can achieve similar successes. We look forward to doing our part to help all retailers pursue the five pillars of leadership and transform the marketplace.
To learn more about how Environmental Defense Fund is working with business to remove chemicals of concern, visit Behind the Label: A Blueprint for Safer Chemicals in the Marketplace.