Retail demand for safer products is not only here to stay – it’s now a source of competition in the evolving marketplace. Amazon is the latest retailer to join Walmart, Target, CVS Health, Home Depot, and Rite-Aid by publishing a chemicals policy and a public Restricted Substances List. Amazon and several of the above-mentioned retailers represent half of the top ten retailers in the US. Amazon’s new policy is a big deal: not only is Amazon the third largest retailer by sales in the US, it is the first primarily ecommerce retailer to create a chemicals policy. Ecommerce represents a challenge in terms of implementing such a policy, but as shoppers increasingly turn to online retailers for many of their purchasing needs, this also presents a major opportunity to increase the availability of safer products.
In a rare move by two fierce competitors, Walmart and Target brought together stakeholders from across the U.S. beauty and personal care (BPC) industry in 2014 to drive safer, more sustainable products. This was bold considering that there was no consensus on the basic definition of product sustainability in an industry estimated at over $80 billion. After three years, a core group of eighteen organizations across the BPC value chain, including the Environmental Defense Fund (EDF), released the first science-based scorecard of 32 key performance indicators (KPIs), marking the most sweeping market demand signal for safer and more sustainable beauty and personal care products yet.
Why does this matter?
Beauty and personal care consumers increasingly care about the health and environmental impacts of the products they buy. A vast majority of 87 percent of consumers globally prefer products with “no harsh chemicals or toxins.” Millennial women are also driving demand for more sustainable products. To address this gap, Forum for the Future worked together with The Sustainability Consortium to facilitate the three year mission to “shift the beauty and personal care product sector into a more sustainable, thriving and resilient industry that serves the needs of people and planet both now and in the future.”
Last week The Home Depot published an update to their Chemical Strategy that expands their commitments to now cover household cleaning chemical products. They are asking suppliers to remove and exclude nine chemicals from these products by 2022. This commitment builds on their strategy first published in October 2017, which targeted chemicals of concern in flooring, carpet, insulation, and paints. Adding cleaning products to that portfolio builds on The Home Depot’s commitment to tackle products that impact the quality of indoor air. This commitment is important considering we spend 80% of our time indoors and many of the chemicals we are exposed to inside are linked to the development of asthma, among other health issues.
The Home Depot’s updated strategy is a move in the right direction for cleaning products. While they previously highlighted environmentally preferred products through the Eco Options® certification program, this commitment will impact all cleaning products sold in stores and online. This means more consumers will be able to bring safer products into their homes.
Retailers are increasingly aligning to eliminate or reduce these 9 harmful chemicals
Target has joined other retailers on the right path to developing a robust science-based policy for tackling greenhouse gas emissions in its operations and supply chain, creating more momentum toward action on climate by leading companies.
At COP23 in Bonn, Germany, we heard leaders at some of the world’s largest companies share their commitments to step forward on climate issues. This year we’ve also seen American companies like Mars Inc., Walmart, Hewlett Packard Enterprise and Amazon set ambitious goals during a time when our government is stepping back. At EDF+Business, we see time and time again why our world needs healthy environments and healthy businesses in order to truly prosper.
American businesses benefit tremendously from the robust voluntary and regulatory programs of the U.S. Environmental Protection Agency. These programs are now under threat of massive budget cuts and regulatory rollbacks. In the coming weeks and months, the experts at EDF+Business will examine what a weakened EPA means for business.
It’s safe to say that the EPA isn’t having the best week. Whether it was new administrator Scott Pruitt vowing to slash climate and water protections at CPAC or this week’s reveal that President Trump wants to slash a reported 24 percent of its budget, the EPA has taken a beating recently. However, what may not be as obvious is that slashing EPA’s budget and reducing funding to key programs actually hurts businesses that have greatly benefitted from EPA programs.
A key example of how the EPA bolsters business is freight. In the freight world, the EPA has done a lot for companies’ bottom lines while protecting human health and that of the planet. Companies seeking to
reduce freight costs and achieve sustainability goals across supply chains receive immense value from the EPA. Two key programs that provide this value are the U.S. EPA SmartWay program and the Heavy-Duty Truck Greenhouse Gas Program.
A compelling value proposition for business
SmartWay was created in 2004 as a key part of the Bush Administration’s approach to addressing clean energy and climate change. The program has grown from fifteen companies at its start to nearly 4,000 companies today. The program attracts strong private sector participation because it offers a clear and compelling value proposition: freight shippers gain access to information that enables them todifferentiate between freight carriers on emissions performance.
This saves shippers money and cuts carbon emissions. Freight carriers participate in the program to gain access to large shippers, such as Apple, Colgate-Palmolive and Target.
The EPA SmartWay program is not only a popular program that is delivering billions of dollars of annual savings to the U.S. economy, it is also a core strategy for companies to reduce their freight emissions. The agency has calculated that since 2004, SmartWay partners have saved:
- 72.8 million metric tons of carbon emissions
- Over 7 billion gallons of fuel
- $24.9 billion in fuel costs
To put it in perspective, the reduction of 72.8 million tons of emissions is roughly the equivalent to taking 15 million cars off the road annually. The $25 billion in aggregate savings from this one program is more than three times the annual budget of the entire EPA.
Given the strong value proposition of the program, it is no surprise that many companies with existing science-based targets on climate emission reductions participate in EPA SmartWay, including: Coca-Cola Enterprises, Dell, Diageo, General Mills, Hewlett Packard Enterprise, Ingersoll-Rand, Kellogg Company, Nestlé, PepsiCo, Procter & Gamble Company and Walmart.
Clean fuel driving a healthy U.S. economy
Another key program that is saving companies billions is the Heavy-Duty Truck Greenhouse Gas Program. This program supports long-term cost savings and emission reductions through clear, protective emission standards with significant lead time.
The first generation of this program, running from 2014 to 2017, was finalized in August 2011 and will cut oil consumption by more than 20 billion gallons, save a truck’s owner up to $73,000, deliver more than $50 billion in net benefits for the U.S. economy, and cut carbon dioxide pollution by 270 million metric tons.
The program was created with the broad support of the trucking industry and many other key stakeholders. Among the diverse groups that supported the standards were the American Trucking Association, Engine Manufacturers Association, Truck Manufacturers Association, and the United Auto Workers. The industry has embraced the new and improved trucks too.
The success of the first generation effort spurred the agency to launch a second phase that was finalized in August 2016. This effort stands to be a major success as well. The program is estimated to save:
- 1.1 billion metric tons of carbon pollution
- 550,000 tons of nitrous oxides and 32,000 tons of particulate matter (aka: harmful air pollutants)
- 2 billion barrels of oil
- $170 billion in fuel costs
This latest phase is also big hit with leading companies. More than 300 companies called for strong final standards during the rulemaking process, including PepsiCo and Walmart (two of the largest trucking fleets in the U.S.), mid-size trucking companies RFX Global and Dillon Transport, and large customers of trucking services General Mills, Campbell’s Soup, and IKEA. Innovative manufacturers, equipment manufacturers, and freight shippers have also called for strong standards.
The corporate support for these standards was so impressive that the New York Times issued an editorial illustrating a rare agreement on climate rules.
Every company that sells goods in the market benefits immensely from these two programs and many others from the U.S. EPA. Programs like EPA SmartWay and the Heavy Truck Greenhouse Gas Standards are saving companies and consumers billions of dollars annually, and are integral to corporate efforts to cut carbon emissions.
In his remarks to EPA employees on his first day on the job, Pruitt acknowledged that “we as an agency and we as a nation can be both pro-energy and jobs and pro-environment…we don’t have to choose”. My hope is that this is a signal of open mindedness to a path forward would allow further improvements to the environment and the economy rather than roll-backs on vital programs and protections.
Perpetuating the belief that the EPA and business are at odds will not only hurt the environment, but would endanger American prosperity.
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Yesterday Target announced a new chemicals policy that applies to all products sold in its stores and to its operations. Does this policy have the capability to transform the marketplace by ushering in safer affordable products? Let’s take a look.
In the new policy, Target announces aspirations and time-bounded goals framed in three major areas: transparency, chemical management, and innovation.
On transparency, Target has surpassed its competitors by committing to gain not only full visibility into the chemicals in final products but also into chemicals used in manufacturing operations. Target also takes a leadership stance by aspiring for this full material disclosure across all product categories. This goal is significant and noteworthy, considering the number and variety of products (and associated manufacturing processes) at the average retail store. Target will first implement this transparency goal in “beauty, baby care, personal care and household cleaning formulated products by 2020”. In one drawback, Target is quiet regarding if and how this enhanced supply chain transparency will translate into greater ingredient transparency to consumers.
In the second area, chemical management, Target vows to implement a hazard-based approach to prioritize chemicals. It announces the use of hazard profiles – which characterize the inherent health and environmental hazards of chemicals – in judging which chemicals get added to Target’s new Restricted Substances Lists (RSLs) and Manufacturing Restricted Substances Lists (MRSLs), for future reduction and/or removal. This approach is critical to fostering safer product design and is in line with the philosophy of the Commons Principles for Alternatives Assessment, guiding principles EDF helped develop. To kick off this work, Target outlines chemical and product specific goals: removal of PFCs and flame retardants from textiles by 2022 and removal of formaldehyde and formaldehyde donors, phthalates, butyl paraben, propyl paraben, and NPEs from the formulated product categories mentioned above by 2020.
Finally, Target commits to directly support safer chemicals innovation. In doing so, Target has shown its understanding that eliminating hazardous chemicals from the consumer product value chain is half the battle; promoting the development or discovery of safer alternatives and enabling their usability in products is as important. Specifically, Target pledges an investment of up to $5 million in green chemistry innovation by 2022.
Target also pledges to publicly share progress against its new policy on an annual basis. We look forward to this regular engagement of the public and hope it will include quantitative measures of progress.
EDF commends Target for establishing a corporate chemicals policy, making it ambitious, and stipulating time-bound goals in specific product categories. Target continues the emphasis on beauty, home and personal care, and baby products that it initiated in 2013 with its Sustainable Product Index. New to the fold is action on safer textiles. In another welcome development, Target has publicly released a key set of chemicals of concern that it plans to remove from these product categories. Interestingly for formulated products, Target’s starting list of chemicals for removal is very similar to the initial set of high priority chemicals Walmart disclosed in 2016. With the two largest retailers in the U.S. not slowing down on safer chemicals leadership, the future of the marketplace looks healthier. Will other retailers finally follow suit?
By Neal Tsay, MBA Candidate at UCLA’s Anderson School of Management, 2011 EDF Climate Corps fellow at Target
As a former history major, probably the last place I would have expected to spend my MBA summer internship was at a large architecture and engineering firm in Minnesota. Well, almost. Store Design at Target Corporation is the department that handles architecture and engineering (A&E) for its 1,762 U.S. stores and over 100 stores in Canada opening in 2013. If Store Design was a stand-alone A&E firm, it would be one of the largest in the United States. And it is where I spent my summer as an EDF Climate Corps fellow.
Last December, Target made several public commitments to sustainability – among them, getting 75% of its U.S. buildings ENERGY STAR certified by 2016. As one can see from Target’s Here for Good website, only 8% were certified as of last year. My task? Develop the plan to help Target meet its ENERGY STAR commitment on time.
Innovation is everywhere at Target. While most of my EDF Climate Corps colleagues were hunting high and low for energy-saving opportunities at other companies, I was sitting pretty with an existing list of no less than 60 different innovation projects in development to make Target stores more energy efficient. Prioritizing these projects and optimizing their deployment across 1,762 stores, both in terms of financial returns and ENERGY STAR impact, seemed like a monumental challenge for a 10-week assignment. But I was up for it.
In total, my recommendations to the firm, if deployed across all Target stores in the United States, could save over 84 million kWh per year, eliminate over 50,000 metric tons of CO2 equivalent and generate several million dollars in annual energy savings.
I was able to achieve my task thanks in large part to the culture of innovation that had already created a highly efficient portfolio, generating millions of dollars in energy savings that helps Target continue to offer great value for its guests, long before I arrived. So how did Target get so far already, and how will the company reach its commitments? Collaboration is a key factor on several fronts:
Collaboration with Government and Industry. Target is working with the U.S. Department of Energy’s National Renewable Energy Laboratory (NREL) through its Commercial Building Partners program to develop highly efficient retail buildings. This involves collaboration with other retailers such as Best Buy and Kohl’s – companies that compete for the same consumer dollar – in sharing best practices to help the retail industry as a whole become increasingly energy efficient over time. A successful pilot program at a SuperTarget store in Colorado could provide many of the solutions Target needs to reach its ENERGY STAR commitment.
Collaboration with Universities and Trade Organizations. Target partnered with the University of Minnesota to study advanced ventilation strategies that maintain good indoor air quality while reducing energy usage. About half of Target’s stores now utilize these procedures, which have saved the company millions of dollars in energy and capital costs without compromising the comfort of its guests. While this has enhanced the ENERGY STAR standing for many stores, Target has more broadly engaged practicing engineers by sharing these innovations through organizations such as ASHRAE.
Collaboration within Target. At Target, team members in engineering, finance, sustainability, stores, commissioning, energy management and more all play key roles in helping Target reach its ENERGY STAR commitment. With 15,000 team members at headquarters, finding information can sometimes be a challenge. However, once people found out about my project, they were more than happy to help and actually quite excited to have somebody on board to help guide Target’s efforts to meet this sustainability commitment.
Expect More. Pay Less. is Target’s brand promise. By expecting more efficient store prototypes, Target itself benefits from significantly lower energy costs, and by reaching its ENERGY STAR commitment, Target would have more ENERGY STAR certified buildings than any other retailer. Collaboration along the way will no doubt provide as valuable lessons for retailers and engineers as it did for this EDF Climate Corps fellow.
EDF Climate Corps places specially-trained MBA and MPA students in companies, cities and universities to develop practical, actionable energy efficiency plans. Sign up to receive emails about EDF Climate Corps, including regular blog posts by our fellows. You can also visit our Facebook page or follow us on Twitter to get regular updates about this project.