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Chemical transparency – A rising trend in supply chain disclosure

Mary Ellen Smith

In late 2016, Walmart released a list of eight chemicals they requested be removed from products sold on their shelves. The updated policy also stated manufacturers must list the chemicals on packaging by 2018 and work to find alternatives. With only 8 listed chemicals the effort may appear meagre at first.  The policy impacts a whopping 90,000 items made by 700 manufacturers.

Following Walmart, Target recently announced a new chemical policy pushing its suppliers to provide full ingredient disclosure on major category items, with the ultimate goal to disclose on all products. This feeds into a wider and growing trend of chemical transparency in company supply chains. Other retailers have also followed suit.

Why the interest in chemical transparency?

  • Government pressure: The US’s main law governing chemical safety, last updated in 1976, was finally overhauled in 2016 giving the EPA the necessary tools to ensure chemical safety.  While changes in regulation will be slow, it is likely to become more stringent for an industry that long enjoyed flexibility.
  • Industry pressure: Innovative companies like Unilever continue to push supply chain transparency boundaries, pressuring competitors to keep up with the Joneses.
  • Consumer awareness: Never before have consumers had such interest in product ingredients. Consumer interest and awareness of product ingredients is expected to continue to rise.
  • Financial risk: As risks grow along with the increasingly complexity of global supply chains, companies want to better understand potential risks. Johnson & Johnson was recently ordered to pay out $110 million after a consumer’s death was linked to a widely-used and legal ingredient in their product.
  • Reputation: Companies are undergoing preventive measures to avoid bad publicity related to product ingredients due to pressure from NGOs, customers, and consumers combined with the internet-speed of news.

As consumers and customers increasingly ask: “what is exactly in my product?” answering: “I’m not sure, let me get back to you” is not likely to suffice. Companies who are ready for our chemically transparent future will have the complete answer on-hand, if not already in the consumers’ hands.

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