When the Chemical Footprint Project launched in December 2014, it aspired to become the next carbon footprint or the next widely used tool for measuring company performance on a critical sustainability concern – toxic chemical use in the manufacturing of products.
It’s made steady progress since then, with 31 companies, including Levi Strauss, Walmart and HP Inc., using the Chemical Footprint Project’s annual survey to inventory and report on their hazardous chemical use, as well as their progress towards safer alternatives.
Last month, however, the initiative scored a big win that just might bring it closer to reaching its lofty goal. Nearly 45% of TJX Companies’ shareholders voted in favour of a resolution calling on the discount retailer to report on its plans to reduce its chemical footprint (the “chemicals of concern” used to manufacture the products it sells in its stores). “To get that kind of vote on this ask, that sends a message,” said Cherie Peele, program manager at the Chemical Footprint Project. Investors, it seems, want more transparency from companies about how they are moving toward safer chemicals, to manage their risks and respond to consumer preferences.
Socially responsible investors are further concerned about the environmental justice implications of the science linking hazardous chemical exposure to chronic diseases such as diabetes because communities of colour bear the brunt of chemical production.
This investor interest just may spur more companies to take up chemical footprinting, and particularly as they see their high-performing peers reap the rewards of consumer trust in their brands.
The TJX vote was “a good demonstration that the E in ESG is not just about climate or water, it includes chemicals. It’s something that I hope companies take to heart,” said Boma Brown-West, senior manager of consumer health at EDF+ Business.
The strong vote surprised the investors who filed the proposal, Trillium Asset Management LLC and First Affirmative Financial Network, because it was the first time such a resolution had been brought to a vote. Ordinarily, such first-time shareholder resolutions receive single-digit votes. That fact that it got over 40% is “an indication that some major institutional money managers voted in favour,” said Holly Testa, director of shareholder engagement at First Affirmative Financial Network. “It’s an indication that there’s widespread investor interest in this issue. It’s a mainstream concern.” “The chemical footprint provides a way to not just say that we care about safer chemicals & green chemistry, but demonstrate it by measuring the process towards safer chemicals,” say analysts.
As evidence mounts that chemical exposure has effects on chronic disease, such as diabetes, obesity and heart disease – and that individuals with those health conditions are more vulnerable to the coronavirus – socially responsible investors are wanting more disclosure and action from companies on chemical risks.
Research documents that the chemical plants that produce the chemicals used in everyday products are often sited in communities of colour, in areas some call sacrifice zones. “If the brands and retailers can start a program of reducing these chemicals, it’s going to go upstream and reduce the impacts of air and water pollution to the most vulnerable in this country,” Baker said.
The next carbon footprint?
With just 31 companies reporting their chemical footprints, the initiative has a way to go before it becomes as widespread as the carbon footprint. Peele says that “we’re still in the process of socialising” the survey. The Chemical Footprint Project survey is also evolving every year as it works with companies on the challenges of collecting and reporting information that comes from many places within a company.
McFadden agrees that it takes time for a reporting scheme to become mainstream, noting that the carbon footprint had slow uptake initially because companies were unsure about it. And he notes that carbon is just one chemical, whereas chemical footprinting is thousands of chemicals.
To that Peele responds, “Even just beginning the process is a leadership role. We’d like to think that anybody who’s participating, we see them in a leadership role.” Ultimately, if investors don’t spur more companies to report their chemical footprint, consumers just might do the job.