By Dan Hockensmith
PLASTICS NEWS STAFF
FALLS CHURCH, VA. (May 2, 4:20 p.m. EDT) -- Corporate shareholders, including some Roman Catholic communities, have voiced concern in resolutions filed during the 2008 proxy season about plastic products that contain suspected toxic chemicals.
The resolutions followed high-profile toy and pet-food recalls, as well as recent controversies over chemicals used in water bottles, packaging, cosmetics and other consumer goods.
A record 21 resolutions on product safety have been filed this year, compared with 13 in 2007 and 12 in 2006, according to Falls Church-based Investor Environmental Health Network, a group of investment managers that encourage companies to adopt safer chemicals policies.
Those resolutions mentioned bisphenol A, PVC and perfluorooctanoic acid as chemicals that investors are seeking more information about, according to IEHN’s Web site. (Editor´s note: Full resolutions from the Kroger grocery chain and electronics retailer Circuit City appear at the end of this story.
Richard Liroff, IEHN founder and executive director, said in an April 29 teleconference that 11 of the 21 resolutions subsequently have been withdrawn, as a result of companies reporting related actions they have planned or already taken to address shareholder concerns.
“Investors and businesses are waking up to the fact today that the risks posed by unaddressed toxic chemicals, and the failure to adequately address them, can jeopardize a company’s bottom line and long-term wealth of investors,” Liroff said.
“The collapse of the retail market for polycarbonate baby and sport bottles containing the chemical BPA, during the last three weeks, vividly illustrates why companies and investors cannot avoid the threats posed by products that are unsafe due to toxic chemicals,” he said.
One pending resolution, addressed by nonprofit Catholic Healthcare West of San Francisco to supermarket giant Kroger Co., contains a reference to BPA.
IEHN singled out Hexion Specialty Chemicals Inc. of Columbus, Ohio, for praise for mentioning in its 2007 annual report scientific studies of BPA and possible costs associated with tighter government regulations.
Liroff said companies that anticipate government regulations of materials — and share possible implications with investors — will fare better than their competitors in the long term.
“The manufacturers of the alternatives to … [PC] baby bottles can’t make their products fast enough because they’re racing off the shelves,” he said, “They’ve been positioned very well on this issue, thank you very much, because they saw which way the science was moving and how intensely moms and dads care about the exposure of their very young children to these hazardous chemicals.”
Two pending resolutions — one to Kroger and another from the Sisters of St. Francis of Philadelphia to electronics chain Circuit City — mention PVC.
Already this year, Liroff said, pressure from shareholders has prompted retailers Circuit City, Best Buy, J.C. Penney and Costco to announce phase-outs of PVC products.
Toys R Us recently joined Target Corp., Sears and Wal-Mart in announcing reductions in PVC packaging and products. Toy maker Hasbro Inc. has agreed to include PVC in a broader sustainability dialogue with shareholders.
“They [BPA and PVC controversies] really drive home that companies can’t simply fall back on compliance with existing federal law,” Liroff said. “Companies really do have to understand the market and understand better the potential market risks if they don’t act.”
Officials at the Arlington, Va.-based Vinyl Institute downplayed the effect of such resolutions on manufacturing.
“What we are concerned about is that management of these [retail] companies educate the shareholders about the implications of passing these resolutions on PVC/vinyl applications,” said Michelle Wesley-Ford, the institute’s communications manager, in an April 29 telephone interview. “They could be cutting off materials that customers still want,” such as toys and building products.
The pending Kroger resolution also mentions PFOA, a component of fluoropolymers such as Wilmington, Del.-based DuPont Co.’s Teflon that are used to make nonstick products.
In a May 1 telephone interview, John Heinze, executive director of the Environmental Health Research Foundation in Chantilly, Va., and a senior consultant at the Fluoropolymer Products Information Center of the Society of the Plastics Industry Inc., said processors have adhered to the EPA’s PFOA Stewardship Program.
Under the plan, eight major chemical companies have committed to reduce by 95 percent their facility emissions and product content of PFOA by 2010 and to work toward eliminating PFOA by 2015.
“That makes all of these [resolutions] from a shareholder perspective pointless, because the industry is already proceeding and the industry is fully committed and engaged in reductions and alternatives,” Heinze said.
Amalgamated Bank of Chicago submitted a resolution to DuPont on the feasibility of phasing out PFOA. The motion was taken out of DuPont’s annual proxy statement after consultations with the Securities and Exchange Commission.
Company: Kroger
Subject: Toxic Chemicals in Products
Year: 2008
Sector: Food Retail/Processing
Lead Filer: Catholic Healthcare West
Outcome: Pending
Whereas:
Consumer concern about chemicals in products has escalated sharply. Numerous reports have surfaced about excessive levels of toxic chemicals in retail products, resulting in widespread product recalls, including contaminated pet food offered for sale at Kroger.
In January 2008, the acting Commissioner of the Consumer Product Safety Commission declared CPSC will increase its scrutiny of retailers if pending product safety legislation is enacted by Congress, noting that retailers share responsibility with manufacturers for the safety of the products they sell. (“Safety Push Focuses on Retailers”, Wall Street Journal, January 8, 2008)
Products sold in Kroger stores are likely to contain various materials which are controversial because of their potential health and environmental impacts.
BPA Issues: bisphenol A is found in the polycarbonate plastic used for manufacture of baby and sport bottles, and also is used as an interior lining in food cans. Researchers have associated exposure to BPA with a host of health effects in laboratory test animals. Though scientific debate continues regarding effects on humans such as increased susceptibility to cancer and diabetes, some companies are taking precautionary action to eliminate certain human exposures. Whole Foods Market has removed baby bottles containing BPA from its shelves and Canada’s largest outdoor equipment retailer, Mountain Equipment Co-op has removed polycarbonate water bottles from sale.
PFOA Issues: Perfluorooctanoic acid is used to produce stain- and grease-resistant coatings for cookware and food packaging. In June 2006, the majority of EPA’s Science Advisory Board identified PFOA as a likely carcinogen. Retailers including Wal-Mart and McDonald’s have announced their intent to study or use alternatives to PFOA-based products or packaging. Food producer ConAgra is examining alternatives to reduce or eliminate its presence in food packaging.
Cosmetics and Personal Care Product Safety Issues: Cosmetics and personal care products have come under scrutiny due to ingredients such as phthalates -- which have been linked to malformed or underdeveloped reproductive organs in males, among other things -- and the neurotoxicant lead, which has been found in red lipstick. Legislation recently enacted in California is requiring increasing ingredient disclosure. Media stories have prompted growing consumer attention.
PVC Issues: Polyvinyl chloride raises a host of environmental and human health issues throughout its supply chain. Retailers such as Wal-Mart, Target, Sears, and Kmart are phasing out PVC products and packaging.
Resolved: Shareholders request that the Board publish a report to shareholders on Kroger policies on emerging product safety issues, at reasonable expense and omitting proprietary information, by March 2009. This report should summarize which, if any, product categories sold in Kroger stores may be affected by the product toxicity concerns described above, and options for new initiatives, above and beyond legal or regulatory compliance, that management can or will take to respond to this public policy challenge.
Supporting Statement:
The proponents believe the potential new initiatives that might be described in the report could include communications, guidelines, product review, consumer education or other changes in Kroger policies.
Company: Circuit City
Subject: PVC, Other Toxic Chemicals in Products
Year: 2008
Sector: Electronics Retail/Manufacture
Lead Filer: Sisters of St. Francis of Philadelphia
Outcome: Pending
Whereas:
Toxic chemicals in electronics supply chains have been a prominent concern in recent years, as stories in the media have highlighted hazards to human health and the environment from the production, use, and disposal of electronics products.
Public policies in the United States and overseas have begun to address these issues. For example, the European Union has adopted the Reduction of Hazardous Substances (RoHS) Directive limiting the use of specific chemicals such as lead and certain brominated flame retardants in electronics products.
Private sector companies have also responded. For example, Wal-Mart is developing a scorecard for assessing the sustainability of its suppliers’ electronics products that includes the use of innovative materials that reduce the amount of hazardous substances in products. Wal-Mart also has established a goal that all televisions and computers it sells will comply with the RoHS directive by the end of 2007.
Numerous suppliers in the electronics industry have adopted policies and practices on the use of PVC in products and packaging out of concern about the health and environmental impacts of PVC throughout its supply chain. Manufacturers establishing publicly-disclosed policies on PVC use include Apple, Dell, Hewlett Packard, Microsoft, Nokia, Samsung, Sharp, and Sony. Retailers doing so include Wal-Mart, Target, Sears, and Kmart. Retailers have given priority to addressing PVC in their private-label products.
Safer, cost-effective alternatives to PVC are readily available, including safer and recyclable plastics, and bio-based materials. Our company sells such private-label brands such as Element and NexxTech, but has not published policies or practices with respect to PVC in products and packaging.
Resolved: Shareholders request that the Board publish a report to shareholders on Circuit City policies on product safety, at reasonable expense and omitting proprietary information, by December 2008. This report should summarize which, if any, product lines or categories sold in Circuit City stores may be affected by the product safety concerns described above, and options for new initiatives, above and beyond legal compliance, that management can or will take to respond to this public policy challenge.
Supporting Statement:
Proponents believe that publicly responding to these concerns not only has significant environmental and health benefits, but also helps to build public trust, protect brand reputation, and can safeguard and grow market share by anticipating further regulation and mitigating the risk of product recalls and other legal liabilities.
NOTICE: In accordance with Title 17 U.S.C. Section 107, this
material is distributed without profit to those who have expressed a
prior interest in receiving this information for research and
educational purposes.
