WHEREAS: Chemicals have been important drivers of economic growth, but the cost of poor management and the long-term impacts of chemicals raise significant concerns for investors.
The costs associated with environmental chemical exposures worldwide likely exceeds 10 percent of global GDP or $11 trillion.1 Researchers examining large-scale impacts that threaten the integrity of Earth’s system processes found that increases in chemical production and releases are not consistent with keeping humanity within a safe operating space.2 As a result, the potential destabilizing impacts of synthetic chemicals to Earth and human health raise important concerns for a healthy economy.
In the United States Per- and Polyfluoroalkyl substances (PFAS), or “forever chemicals”, that scientists have linked to chronic disease and cancers have cost cities enormous sums. PFAS are widely used in consumer goods, including outdoor clothing and linens.3 Investors know the short-term impacts – stockholders of PFAS producers lost $82 billion in value between January 2018 and September 2020, but the long-term costs to producers and throughout the value chain are still mostly unknown.4
Costco’s current policies principally relate to activities around education and testing for chemicals of concern, including encouraging suppliers to assess chemicals through its Smart Screening Program.5 There is minimal disclosure on the progress and outcomes of these programs.
In contrast, the Company’s peers are seeking to improve product safety and reduce liability by reducing chemicals and disclosing progress:
Walmart set a 2020 goal to reduce “priority chemicals” in its formulated products by 10 percent from a 2017 baseline. In 2022, Walmart exceeded this goal, reducing harmful chemicals in products 17 percent or by 37 million pounds.6Dollar Tree, Target, and Walmart, among other retailers and manufacturers participate in the annual Chemical Footprint Project Survey – a tool which benchmarks corporate reduction of the use of chemicals of high concern. Front-runners in the Survey are top performers in all aspects of proactive chemicals management.7The commitment to “reduce potential chemical harm to humans and the environment” is important, but the Company should provide clear data on its chemical reduction efforts. Demonstrating such progress can reduce risk for shareholders and the Company.
 
1 https://ehjournal.biomedcentral.com/track/pdf/10.1186/s12940-017-0340-3 site=ehjournal.biomedcentral.com
2 Environ. Sci. Technol. 2022, 56, 3, 1510–1521 Publication Date: January 18, 2022 https://doi.org/10.1021/acs.est.1c04158
3 https://toxicfreefuture.org/pfas-in-stain-water-resistant-products-study/
4 V. Zainzinger, “What difference does green investing make?”; Chemical & Engineering News, November 16, 2020
5 https://www.costco.com/sustainability-chemical-management.html
6 https://corporate.walmart.com/esgreport/reporting-data/esg-commitments-progress; https://toxicfreefuture.org/success-walmart-announces-a-reduction-of-37-million-pounds-of-toxic-priority-chemicals-in-its-products-surpassing-original-goal
7 https://www.chemicalfootprint.org/assets/downloads/ChemicalFootprintProject-2020-Report.pdf