Ask an Advocate Anything: Mike Schade, Mind The Store
Retail regulation advocate Mike Schade has a message for stores, brands, and manufacturers: The market is moving to transparency and safer materials—and you should be ahead of that trend.
Through our “Ask An Advocate Anything” blog series, we chat with influential activists and campaigners, seeking to better understand their theories of change and explore how NGOs are challenging and collaborating with companies to advance business as a force for good.
The views and statements shared in the following interview are those of the interviewee alone and do not represent the perspective of Future 500. To learn more about how we approach these conversations, check out our Editorial Policy.
He and his colleagues drive change via an approach that the industry calls “retail regulation.” They identify leading retailers selling products that either contain, or are packaged with, chemicals of concern. By spotlighting the health risks associated with these products, Schade hopes to eliminate them from the marketplace and drive companies to develop safer substitutions.
We asked Schade to elaborate on his theory of change, and outline the risks that companies should be aware of as consumers grow increasingly educated about chemicals of concern.
First off, why are you doing this?
There is a growing body of scientific evidence that has shown that our exposure to certain hazardous chemicals has contributed to a “silent epidemic” of diseases—from cancer, to infertility, to learning and developmental disabilities. Studies have found that over 98 percent of American women of childbearing age have toxic chemicals in their bodies that will increase their risk of cancer, reproductive harm, and brain damage. Many of these chemicals that can be dangerous to our health are commonly found in products where we least suspect them—food, clothing, packaging, and electronics.
Further, these chemicals are not only costly to our health but costly to our society. Exposure to a handful of toxic chemicals costs more than $340 billion a year in healthcare, social services, special education, and lost productivity. Furthermore, at a time when we are learning more and more about the dangers and the risks of chemicals, the federal government is rolling back regulation and putting the chemical industry in charge of government programs that are designed to protect us.
If federal policy reform is your ultimate goal, why are you going after Walmart and other retailers?
We think that retailers can play a really important role in driving the reduction and elimination of chemicals of high concern, promoting transparency, and driving the development of safer and healthier products. We launched the Mind the Store campaign six years ago to call on the nation’s largest retailers to get tough on toxic chemicals. The motto behind our campaign is “with great market power comes great responsibility.”
And what do you mean by that?
Retailers have the power and a moral responsibility to use their purchasing power to drive harmful chemicals out of the product packaging they use and sell to consumers. This can really help—not only will it make products and packaging safer and healthier for consumers, but also help clean up the factories and the communities where these products are made. Also, we think there is a strong business case for action; doing so can help build trust with consumers and employees that work at these businesses, and also help mitigate growing financial, reputational, and legal risks associated with the sale of products containing dangerous chemicals. Our aim is to create and drive a competitive “race to the top” in the retail sector.
What kind of results are you seeing?
When we launched the campaign, we challenged the top 10 U.S. retailers, including Walmart and Target, to get tough on toxic chemicals and launch robust safer chemicals policies to reduce and eliminate the “worst of the worst” chemicals in the products and packaging that they sell. Within one year of launching the campaign, both Target and Walmart identified thousands of chemicals of concern, and started calling on their suppliers to reduce and eliminate them. Walmart’s chemical policy has already driven the reduction of millions of pounds of chemicals of concern out of consumer products, from beauty and personal care products, to household cleaning products.
Give us an example of a specific chemical of concern that you’ve recently helped remove from the market.
This past year we launched a campaign to challenge retailers to reduce and eliminate methylene chloride and N-Methylpyrrolidone (NMP) from paint strippers. Since then, we’ve won commitments from 13 major retailers, including Home Depot, Lowe’s, Walmart, Amazon, AutoZone, and others to pull deadly paint-removal products from over 30,000 stores across the United States, Canada, Mexico and beyond. This is emblematic of the type of change we are trying to see in the marketplace.
Tell us how your campaign strategies and tactics work.
We pursue a variety of strategies to encourage retailers to improve—from working with [them] behind the scenes, to releasing reports investigating where chemicals of concerns might be found. We often test products for chemicals and then release the results publicly to encourage innovation. One of our most successful recent strategies is to put out an annual Retailer Report Card that benchmarks retailers on their safer chemical policies and implementation programs, or lack thereof. In 2016, we put out our first one that evaluated 11 major retailers, the next year we expanded it to 30 retailers, and this past year, in 2018, we expanded it once again and evaluated 40 of the nation’s retailers, and also some Canadian chains.
And by publicly ranking the retailers, you create that sense of competition, that “race for the top” strategy.
Yes. Within the first year, seven out of the 11 major retailers either significantly expanded their chemical policies or launched chemical policies for the first time. Companies like Home Depot, Costco Wholesale, and Best Buy launched chemical policies, and others like CVS, Target, and Walmart significantly expanded their existing policies. More recently, between 2017 and 2018, 72 percent of retailers we evaluated year over year reported and demonstrably showed some improvement, and between 2016 and 2017 the average grade for the 11 retailers improved from a D+ to a C+. So companies are using their market clout and influence to reduce and eliminate chemicals that pose a serious risk to not only their customers, but also communities and workers where those products are manufactured and disposed.
What would an A+ corporate chemical policy look like?
We’ve identified 14 key criteria that we benchmark companies against; each one is a notable and essential element of a comprehensive safer chemicals policy and implementation program. We believe companies should focus on four key areas. The first is having a transparent, public-facing policy. That means engaging senior management and the board. That means having frameworks in place to ensure supplier accountability, such as requiring suppliers to test products, and publicly reporting on ones that fail to meet the policy, and the challenges they face in reducing and eliminating chemicals in their supply chain. We also look for policies that set clear goals and quantifiable metrics to measure success; we encourage companies to embrace radical transparency around their policies and their challenges in eliminating harmful chemicals. Finally, a company will need to have a clear path for substitutions. They should have protocols in place to eliminate the risk of what we call “regrettable substitutions.”
That’s a sympathetic-sounding concept, “regrettable substitutions.” What is the responsibility of a company in your view if it unintentionally replaces something, for example, a chemical-based can liner, with something just as bad or worse?
The U.S. chemical safety system is fundamentally broken. If the U.S. Environmental Protection Agency (EPA) can’t ban asbestos – a material that kills an estimated 10,000 Americans – we know we have a problem with how chemicals are regulated in America. Since the 1970s, the EPA has banned or restricted only a handful of chemicals. Meanwhile, we have tens of thousands of chemicals in the marketplace. We used to think of “Made in America” as a sign of pride. There are a lot of good reasons for making chemicals here in America, but compared with other countries around the world, in terms of our chemical management regulatory system we are still in the 18th Century.
So when a company reassures its customers that it complies with all federal regulations on chemicals…?
Complying with basic regulations is just not going to cut it, because chemical regulations have not kept up with best-in-class science, with what science is telling us about the danger of chemicals. One of the areas we encourage companies to address is disclosure. You can’t manage what you can’t measure. If you don’t know what’s in a formulation or a shampoo, or an electronic product, you can’t manage its possible risks and hazards. This disclosure is important. Especially when you’re making a decision about substitution.
Which brings us right back to regrettable substitutions.
If you’re going to be moving away from a chemical that scientific bodies around the world are saying is a suspected carcinogen, you want to ensure you are not moving from one bad actor to another. There are tools out there that can help businesses make smarter decisions. One best-in-class tool is the GreenScreen for Safer Chemicals. It looks at many different hazard end points such as whether a chemical is a carcinogen, a reproductive toxicant, or persistent or bioaccumulative—that is, if it can build up in the human body. We have seen, time and again, companies move from one bad-actor chemical to another. The classic case is moving from Bisphenol A to Bisphenol S.
You focus on retailers, but to what extent are chemical manufacturers open to changing their practices?
We have focused our campaign work both on marketplace transformation – through Mind the Store – and federal policy engagement. On the latter front, we have attempted to engage with the chemical industry. Some years ago we had a pretty robust negotiation with the chemical industry on what federal chemicals reform could look like. Sadly, just as we were close to reaching a deal, the chemicals industry trade association pulled the rug out from underneath us and that negotiation process.
Unfortunately, they tend to represent the lowest common denominator. They don’t always represent the more cutting-edge viewpoints in terms of wanting to promote innovation and green chemistry solutions. And so because retailers remain on the front lines of consumer discontent with product safety, we think that they really are the place for us to transform the marketplace. They play an important role in sending the market signals to the chemical manufacturers on where we need investment and innovation in chemical substitutions.
Is targeting one bad-actor chemical after another effective, or is there a bigger strategy at work here?
Last month, the Green Chemistry and Commerce Council [a collaboration of dozens of leading brands] issued a Statement on Chemical Innovation Priorities and Transparency Road Map. The first part prioritizes groups of chemicals where there is a real need for innovation, to develop safer retardants, plasticizers, water and stain repellents, and so on. This was developed by a group of large retailers – Amazon, Walmart, Home Depot, Target, and others – and it’s valuable because it sends a clear market demand signal to formulators and chemical manufacturers. This is a valuable road map that can help the chemical industry understand what needs to happen. The statement also identified best-in-class approaches for ingredients transparency. When companies come together, when there is a greater alignment, that is where we see the sweet spot for transmitting the demand needed to drive market transformation.
The European Union (EU) embraces a precautionary approach on chemicals, and its chemicals industry seems to be doing fine. But in the United States, industry argues that some chemicals are simply irreplaceable, and that a risk management approach is more practical. Who is right?
On chemicals management and regulation, the EU is about a generation ahead of us. And we have seen how that has translated into more impressive leadership from the business community. Companies like IKEA, Boots, and others are way ahead of U.S. retailers, but the U.S. retailers are beginning to catch up. If we think about chemicals of concern in plastic, IKEA banned PVC plastic in 1992, where it wasn’t until the early- to mid-2000s in the United States that retailers started catching up on that material. Because there has been that lack of federal leadership, that is all the more reason why NGOs like ourselves have been turning to the marketplace to call for change, and at the same time focusing our efforts on states.
Which states are doing a good job regulating chemicals?
Over the past 15 years, a growing number of states have introduced and/or enacted laws to regulate chemicals of concern. According to the Safer States website, there have been 186 policies adopted in 35 states over the years, and this past year we have seen states like Washington and Maine pass legislation that goes much further than the feds in regulating chemicals in commerce. Last year, the state of Washington banned PFAS in food packaging, and the State of Maine also just passed legislation banning PFAS in food contact material. Meanwhile these chemicals are still permitted for food use by the FDA.
Wait, what is PFAS?
PFAS [per- and polyfluoroalkyl substances] is a grouping of literally thousands of chlorinated chemicals made by companies such as 3M and the DuPont spin-off company, Chemours. These chemicals were historically used to make things that are stain, water, and/or grease-resistant. But the carbon fluorine bonds are incredibly persistent. Because they are so persistent and so mobile, they have been found to have contaminated the drinking water of millions of Americans. They were historically used in food packaging, textiles and apparel, and also firefighting foam.
We are beginning to see states restrict these chemicals and retailers step up and use their market influence to regulate them, too. This past December we put out a report that found five of the largest grocers in America were using these chemicals [in plates and trays used in take-out food, among other uses]. In response to the report, Trader Joes and Whole Foods, to their credit, made new commitments to take action on PFAS in their supply chain. That is an example of a class of chemicals that is facing increased scrutiny. Even the feds are looking at this. There is a lot of activity in Congress right now—even some bipartisan interest—that would give federal agencies more authority to regulate these chemicals. But given how slow things move in Congress, we really look to the states and the retail markets.
If we were to ask a chemicals manufacturer about these chemicals, they might tell us that the risks of these chemicals can be safely managed, and that eliminating them outright would come with serious tradeoffs in cost, convenience, and efficacy. How would you respond?
It really comes down to the consumer. Consumers don’t want to be told – and certainly don’t believe – that a “little bit” of a chemical that can cause cancer is going to be safe for them. Try telling Jane or John Doe, for example, “This bottle that your baby is using contains an endocrine disruptor, or a carcinogen, but it’s not going to cause them harm.” They’re not going to believe it. The truth of the matter is that the way we evaluate chemicals for risk is often done in isolation. Americans are not exposed to X amount of Y chemical, and that’s it. Every day we are exposed to hundreds of chemicals, day in and day out, from washing our hair, to brushing our teeth, to putting on our clothes, to working in the office.
In other words, you believe the risk management approach is fundamentally flawed.
When we think about a risk assessment, it typically only looks at your exposure to one chemical at one point in time. It doesn’t look at the cumulative, combined, or synergistic risks of exposure to hundreds of chemicals over one’s lifetime. Also risk assessments don’t take into account the critical vulnerability that pregnant women, infants, and young children face. When we know a chemical is harmful from the scientific literature or from governmental bodies that study chemicals, we think it is important to take a more precautionary approach—especially when the scientific evidence is saying, “Wait, there is a major cause for concern here, because we have a significant body of evidence suggesting that this chemical may cause cancer or infertility or asthma or some other problem.” We don’t think we should take unnecessary risks with our childrens’ health, especially when there are, often times, cost-effective and safer alternatives available for many chemicals of concern.
Let’s say I’m a baby-bottle manufacturer. I hear you, but the replacement you’re recommending is going to triple the cost of my product, and it’s going to sit on the shelf next to my competitors that are not using it. How am I going to compete?
We share those concerns. Cost is an important factor. But often times, there is no major cost impediment [with respect to safer alternatives to many high-profile chemicals of concern]. A lot of times it is a question of economies of scale. At first, it may be a little bit more expensive, but over time as the alternative is commercialized and brought into the marketplace, those costs can be brought down. In many cases, we have seen examples of companies that have actually saved money in making substitution decisions.
In other words, the risks of inaction outweigh the short term pain of revenues?
Companies that are using hazardous chemicals face major risks, from lawsuits, to reputational risks, to having to comply with costly regulation, maybe at a local or state level. A classic example was Lumber Liquidators, which was found to be selling laminate wood flooring containing formaldehyde in violation of California law. After 60 Minutes ran an exposé, the company’s reputation was severely damaged. The CEO was forced to resign. There are a lot of examples like this that help paint the business case for action. In some cases, there are up-front costs for companies, but in the long term we think that innovating and transitioning to safer alternatives is not only smart to do but there is a strong business and financial case to be made.
In terms of consumer backlash and concern, the biggest chemicals story of recent memory was, of course, Bisphenol-A. When you look at all the chemicals of concern you track, what’s on the horizon? What is the “next BPA?”
There are three classes of chemicals that should be on the radar of every major retailer, brand, and chemical manufacturer:
The first, which we talked about, is PFAS chemicals. Just as we did with BPA, we are seeing a perfect storm of activity in the scientific community, regulatory community, and the marketplace. At Mind the Store, we are focusing a lot of our attention on PFAS. We have put out two reports on food packaging and we have more in the works on other product sectors.
The second is phthalates, which are also commonly found in food packaging. These should be on the radar of all major grocery chains and food brands. A study from a couple of years ago found evidence of phthalates in Kraft Macaroni and Cheese. They are also commonly found in formulated products like cosmetics and cleaning products. Their biggest use is in PVC vinyl plastic.
The third is halogenated flame retardants [TDCP and TDEP]. They have largely been phased out of furniture, but they are still commonly used in electronics, like televisions. The European Union is considering banning these chemicals in televisions and other electronics, states like Washington are increasingly stepping up to regulate these chemicals, and scientists are sounding the alarm.
For companies that want to get out in front of regulation, NGO campaigns, and consumer concerns, these three classes of chemicals should be at the top of the to-do list.
Thank you, Mike. Any closing thoughts you would like to share with all the chemical company executives whom we expect will be reading this?
Retail regulation – using the power of retailers to drive change – is not going away. It is the new normal. Brands, chemical manufacturers, and formulators really need to pay close attention to the market signals and demands that retailers are setting. Large companies like Walmart, Target, and Amazon are stepping up to use their market power and clout to drive change. Companies should be taking a very close look at their supply chain to understand where potentially hazardous chemicals may be found, and get out in front to innovate and transition to safer chemicals and chemistries. Consumers don’t want to be told that a little bit of a cancer-causing chemical is safe, and I think consumers are going to be increasingly calling on retailers, brands, and regulators to step up. There is a real financial and business opportunity for innovative brands and companies to meet this rising consumer demand for safer and healthier products.
Editor’s Note: The Chemours Company, mentioned in this interview, is a current Future 500 partner and Corporate Affinity Network member.
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