Action Comes in Wake of Shareholder Resolutions and Dialogue with Investors led by Boston Common Asset Management
BOSTON, MA – Boston Common Asset Management, LLC (Boston Common) today applauded CVS/Caremark’s release this week of a new Cosmetic Safety Policy. The policy, published in CVS/Caremark’s 2007 Corporate Social Responsibility Report, commits the company to “developing action plans to replace ingredients of concern” in its branded and private label products “when safer alternatives are available”. The company will encourage its manufacturing partners to do so as well.
On May 7th, Lauren Compere, Director of Shareholder Advocacy, Boston Common Asset Management attended CVS/Caremark’s annual general meeting and publicly commended CVS for taking this first step. Ms. Compere also encouraged CEO and President Tom Ryan to put sufficient resources behind CVS’s sustainability efforts in order to take it to the next level. This was CVS/Caremark’s first Corporate Social Responsibility Report.
“We are very pleased that CVS/Caremark’s new policy so forcefully recognizes consumers’ growing hunger for assurance that the personal care products they apply to their own and their children’s bodies will not pose a hazard,” said Ms. Compere. “With its 6300 stores nationwide, CVS/Caremark is raising the bar for other large retailers in this intensely competitive marketplace.”
The company noted it already carries products that meet strict European Union safety standards and whose manufacturers have signed the Compact for Safe Cosmetics. The European Union’s cosmetics directive bans many cancer- and mutation-causing chemicals and reproductive toxicants from cosmetics and personal care products. The Compact for Safe Cosmetics, promoted by the Campaign for Safe Cosmetics (a coalition of the Breast Cancer Fund and other grassroots organizations) has now been signed by more than 1,000 cosmetics and personal care companies, and commits those companies to systematically review the chemicals in their products and move to safer alternatives. CVS/Caremark also committed to continually monitor new research for findings linking specific chemicals to health risks and to evaluate how these findings impact its products.
Boston Common filed a shareholder resolution in 2006 asking CVS to consider developing safer chemicals policies. The resolution received support from nearly 10% of CVS shareholders and was refiled in 2007. The refiled resolution was withdrawn when CVS agreed to meet with investors to discuss these issues. Boston Common provided background information on the Compact for Safe Cosmetics and safer chemicals initiatives taken by European-based retailers such as Boots; CVS markets Boots products in the United States.
Boston Common’s work on safer cosmetics issues in part of its broader concern with toxic chemicals in products, including Bisphenol-A in baby bottles, PVC packaging and products, and pesticides. Boston Common carries out its work in collaboration with the Investor Environmental Health Network (IEHN). IEHN is a collaboration of investment managers encouraging companies to adopt “safer chemicals” policies for products, to enhance shareholder value. IEHN participants manage more than $41 billion in assets.
Richard A. Liroff, founder and executive director, Investor Environmental Health Network (IEHN), Falls Church, VA:
“This is yet another demonstration of the importance of retailers’ stepping up to the plate and recognizing the substantial responsibility they bear for assuring their customers about the safety of the products in their stores. We are especially pleased by CVS/Caremark’s commitment to continual improvement to enhance safety, a commitment that we hope other retailers will make.”
CVS/Caremark’s action is just the latest retailer to publicly address toxic chemicals in products issues following investor inquiries. Best Buy, JCPenney, Circuit City, and Costco reported to investors on phase outs of polyvinyl chloride (PVC) packaging and products. Colgate-Palmolive published a corporate policy addressing nanomaterials in products. Target and Pier 1 agreed to produce reports on corporate product safety policies and practices. Hasbro agreed to dialogue with stakeholders on sustainability issues, including PVC.
In contrast to these companies, Avon Products declined to engage investors regarding safety issues surrounding use of nanomaterials in their sunscreens. On May 1, 25% of Avon’s shareholders expressed support for a shareholder resolution filed by Calvert Asset Management Company asking the company to disclose its policies. Nanomaterials are a rapidly growing class of extremely small engineered substances whose safety and environmental hazards have not been well-studied. This resolution is similar to Calvert’s resolution filed and withdrawn at Colgate-Palmolive.
Most of the 21 resolutions on toxic chemicals and product safety filed this year by investment managers working collaboratively as IEHN. A running list of resolutions, their filers, and outcomes is available on the IEHN website.
For more information please contact Lauren Compere, Boston Common Asset Management, at lcompere(at)bostoncommonasset.com or (617) 720-5557.