Retailer looks to reduce chemical use

Wal-Mart asks suppliers to find alternatives, remove 8 substances

Wal-Mart Stores Inc. is asking suppliers to remove formaldehyde, triclosan and six other substances from their products, part of an effort to eliminate some chemicals from household goods.

The chemicals on the list include "certain properties that can affect human health or the environment," Wal-Mart said in a statement Wednesday. The world's largest retailer created the list with help from the Environmental Defense Fund, aiming to get suppliers to find alternatives, said Zach Freeze, Wal-Mart's director for strategic initiatives related to sustainability. The list was limited to eight high-priority chemicals so that Wal-Mart could make meaningful progress.

"We wanted to get started," he said in an interview. "We knew it wasn't going to be a perfect list."

Naming the chemicals follows Wal-Mart's announcement in 2013 that it would ask suppliers to reduce some substances in personal-care, cleaning and beauty products and promote alternatives. At the time, it didn't get specific about the list. The program is an example of widening scrutiny by merchants, manufacturers and legislators into the effect of chemicals, as well as a nod to heightened consumer concerns. In June, for instance, President Barack Obama signed a bill that overhauls the nation's laws governing chemicals.

The retailer's move makes sense, said Brian Yarbrough, an analyst at Edward Jones & Co. Customers are seeking more information about the substances in the products they buy, he said.

"This is just the natural evolution of consumers today," Yarbrough said. "From Wal-Mart's standpoint, it's kind of the way they need to be moving."

Investors are looking for more disclosure from companies too, said Richard Liroff, who runs the Investor Environmental Health Network. A decade ago, he worked on a shareholder resolution calling on Wal-Mart to identify and reduce dangerous chemicals and report on its progress.

"Wal-Mart's naming specific chemicals strengthens investors' efforts to move major retailers and manufacturers to safer chemicals, to reduce reputational and liability risk, and to reap financial benefits from growing consumer concern about chemical risks," said Liroff, the group's executive director.

Under the Wal-Mart policy, manufacturers must list the targeted ingredients on packaging by 2018 and work to find alternatives. The program affects about 90,000 items made by 700 manufacturers. Already, Wal-Mart's suppliers have removed 95 percent of the chemicals on the list, by volume weight, from products sold in U.S. stores that are covered by the policy. Freeze declined to provide specific examples of how manufacturers replaced chemicals with greener alternatives.

Business on 07/21/2016

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