Walmart Sustainable Chemistry Policy A “Big Deal,” But Raises Questions

While generally seen as a positive step promoting ingredient disclosure and safer products, Walmart’s Policy for Sustainable Chemistry in Consumables raises questions among consumer advocates. The Campaign for Safe Cosmetics wants the mega-retailer to release its list of “high-priority” chemicals publicly and seeks clarification on how the policy will enable more informed decisions by shoppers.

Wal-Mart Stores, Inc. has released further detail on its Policy for Sustainable Chemistry in Consumables, which provides confidentiality protections for industry while raising questions among consumer advocates about transparency and the initiative’s practical value for shoppers.

Generally regarded as a positive step with potential for industry-wide improvements, the policy consists of two major components – “transparency” and “advancing safer formulation of products” – and applies to all marketers of personal-care products carried in Walmart and Sam’s Club locations nationwide.

The policy was developed with input from suppliers, NGOs and academic, government and industry stakeholders, Walmart says.

On the transparency side, the policy requires suppliers to disclose all product ingredients online beginning January 2015, with “disclosure to be publicly accessible from the supplier's website and to be displayed at the per-product level.”

Suppliers with products containing “priority” chemicals of concern deemed to pose hazards to human health and/or the environment must disclose those chemicals on packaging by January 2018, according to Walmart.

The mega-retailer cites a number of “authoritative and regulatory lists” that can be used by companies as resources defining Walmart Priority Chemicals, including lists of endocrine disruptors and REACH substances of concern compiled by the European Commission, environmentally toxic substances flagged by the U.S. Environmental Protection Agency, carcinogens identified by the International Agency for Research on Cancer, and developmental and reproductive toxins targeted by Prop 65 law in California.

The second component of Walmart’s policy, safer product formulation, is designed to spur suppliers to reduce, restrict and eliminate the use of priority chemicals of concern using informed substitution principles, as defined by EPA's Design for the Environment (DfE) Standard for Safer Products.

Firms are expected to enter product formulations into a database called WERCSmart, run by Werks Professional Services, LLC, which specializes in hazard communication and provides tools to promote regulatory compliance and information sharing in the supply chain.

Formulation detail will be kept confidential from Walmart, the policy notes, but the retailer will be kept informed regarding suppliers’ level of data-entry completion across their product offering, and suppliers will be alerted when a formulation they disclose contains a Walmart priority chemical.

Initially, the retailer is primarily focused on roughly 10 “High Priority” chemicals, which can serve as a “starting point” for suppliers in their efforts to reduce and eliminate potentially hazardous substances from products, according to the policy.

The high-priority list was developed based on factors including the prevalence of a chemical in Walmart products and concerns about direct exposure to consumers, the retailer notes.

CSC Cites Transparency Concerns

The Campaign for Safe Cosmetics hailed Walmart’s initial announcement of the sustainable chemistry policy in September as a “victory” for consumers, and the coalition provided the retailer with a “wish list” of chemicals it hoped would be included as high priorities, including triclosan, phthalates, parabens and formaldehyde (Also see "Campaign Prepares “Wish List” Of Chemicals For Walmart To Target" - HBW Insight, 23 Sep, 2013.).

Whether or not its recommendations made Walmart’s list of high-priority chemicals is indeterminate, and CSC has taken notice.

“For business reasons, Walmart has elected not to publish the list of Walmart High-Priority Chemicals,” the retailer says. It notes that the identification of such substances is intended to “be used by the respective supplier to achieve the goals of the policy, and not be disclosed or used outside the supplier's organization.”

In a March 11 email, CSC spokesperson Margie Kelly said that while her organization still views the policy “as a big deal” for the personal-care industry overall, “we don't like it that they won't reveal the list of 10 chemicals. Nor have they made clear how the consumers will interact with this information.”

She pointed out the lack of specifics on how the policy would impact shoppers' ability to differentiate between products that do and do not contain controversial substances.

“How will the policy make a difference for a Walmart shopper? Will they know more than what's on the labels (like signage or sections for products that meet the criteria)? It's still unclear.”

Walmart says it will measure suppliers’ performance based on information provided by The Wercs without breaching confidentiality commitments “by grouping products and chemicals into combinations of aggregate data.” It will consider information on reduced or discontinued use of priority chemicals or replacement with informed substitutions, among other sustainability metrics.

Beginning in 2016, Walmart will begin publicly communicating progress in its annual Global Responsibility Report. The retailer does not specify the level of detail it will report.

And it remains to be seen how trace contaminants are handled. Substances like 1,4-dioxane, a chemical-processing byproduct, and formaldehyde, which can be released at trace levels by certain preservatives – both of which are frequently targeted by consumer watchdog groups as toxins to be eliminated – are not typically listed as ingredients on product labeling, so it is questionable whether they would be picked up by The Wercs.

Fragrance is another question mark. CSC and other NGOs have campaigned for regulations that would require full disclosure of fragrance compositions, which traditionally have been treated as trade secrets and identified on product labeling with the generic descriptor “fragrance.”

Walmart says it “recognizes that best-in-class online disclosure often goes beyond the minimum recommendations” found in the guides it proposes for industry use, namely EPA’s DfE standard and the Consumer Product Ingredient Communication Initiative by the Consumer Specialty Products Association.

It counts full disclosure of fragrance components and the identification of “known residuals, contaminants and byproducts” among such additional information.

Though the DfE guidelines do not explicitly mandate disclosure of specific ingredients in fragrances, they hold that the formulator must indicate where more detailed information can be found. The source could be the online list of fragrance materials compiled by the International Fragrance Association, or a subset of that list, they note. Alternatively, a company could post the ingredients in its fragrance palette on its own website “and may include, at the formulator’s discretion, ingredients not used in the fragrance.”

Walmart does not indicate if it will pursue insight into how companies treat trace contaminants and fragrance.

Firms’ best-in-class practices with regard to those points of interest could be uncovered through the Sustainability Index Survey that suppliers are also required to complete. The survey’s content is not currently publicly available, but Walmart says it will enable the big-box retailer to “understand, monitor and enhance the sustainability” of products and their supply chains.

As for other disclosure requirements in the policy, they may have little change on the status quo. Cosmetics manufacturers are already required to declare ingredients on product information panels in descending order of predominance under current food and drug law, and many firms have begun to list ingredients on their websites.

Walmart Seeks EPA Logo For Private Label

Walmart says it is striving toward formulating and labeling its private-label brands to the standards of EPA's DfE Safer Products Labeling Program.

Launched in 1992, the program seeks to distinguish products that “do not sacrifice quality or performance – and are safer for people and the planet,” according to EPA’s website.

To date, the program has granted a DfE seal to more than 2,700 products.

Beginning in January of 2014, Walmart began submitting its private-label products for evaluation against the DfE program’s transparent, scientifically-based criteria, it says.

“Products that earn the DfE label have had every ingredient (including fragrances and other ingredients that are covered as trade secrets) evaluated for human health and environmental effects using the most current information, predictive modeling tools, and expert judgment,” the retailer says.

Further, such products must meet performance, labeling, and sustainable packaging requirements. “By acquiring a DfE label, a product proves that it contains the safest possible ingredients for its function.”

Walmart private-label beauty brands include the Equate line.

Late last year, Target Corporation announced its own Sustainable Product Standard, noting it planned to give the best store placement and marketing to personal-care products that score highest against health and environmental measures (Also see "Target To Reward High-Scoring Personal Care Under Sustainable Standard" - HBW Insight, 4 Nov, 2013.).

Reportedly Target and CVS also are using WERCSmart.