15 December 2014: A report from the UN Environment Programme (UNEP) has underscored the benefits for companies taking an active approach to chemicals management in products and supply chains, given the growing demand for increased transparency on chemicals across the supply chain, from consumers and retailers.

The report indicates that this demand is driving companies to disclose information about the hazardous chemicals in their products and to make safer choices. ‘The Business Case for Knowing Chemicals in Products and Supply Chains,’ which was prepared in collaboration with Clean Production Action, was launched during the second meeting of the Open-Ended Working Group (OEWG 2) of the International Conference on Chemicals Management (ICCM) in Geneva, Switzerland, on 15 December 2014.

Fatoumata Keita-Ouane, Head of UNEP’s Chemicals Branch, said that understanding which chemicals are present in products used on a daily basis, and their hazards, is critical to reducing risk. She said the report shows how companies that act upon this information generate long-term benefits ‘for themselves, their shareholders, the public and the planet.’

The report compares companies with differing chemicals management strategies, finding that those with “active strategies” reduce their risk and generate long-term benefits, such as increased sales, improved reputation and well-managed supply chains. They avoid fines and product recalls, are prepared for government regulations, and respond quickly to growing market demands to know and control the chemicals in their products. The report provides a number of examples of companies that have been proactive, and the rewards they have reaped.

Companies with more “passive strategies,” meanwhile, can face fines, loss of market share and damage to their reputations if an unknown hazardous chemical in a product is made public. Over a three-year period Walmart, Target, Walgreen Co., CVS Pharmacy and Costco Warehouse paid a total of US$138 million in fines because of ‘chemicals of concern’ in their products.

The report finds that while many sectors, such as apparel, footwear, automotive, electronics and personal care, have leaders advocating for and developing active chemicals management strategies, many sectors do not have adequate systems to meet regulatory and customer demands for information, and transforming corporate cultures remains a significant challenge. [UNEP Press Release] [Publication: The Business Case for Knowing Chemicals in Products and Supply Chains]