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  • Writer's pictureKirk Hartley

Walmart Wants 8 Chemicals Out of Products it Sells: Management of D&O Risk, Reputation Risk and

Walmart wants 8 chemicals out of products it sells, according to a July 20, 2016 article in Bloomberg.  Is this management of D&O risk because of Caremark duties to put in place systems to identify and manage corporate risks? Is it TSCA fall out? Is it abstract concern for customers? Is it risk management as to direct liability? Reputation risk? All of the above?

The list of chemicals is as follows, according to the Bloomberg article.

“Toluene, a colorless liquid that is used in paint thinners, nail polish and fragrancesDiethyl phthalate, used to make plastic more flexible and in cosmetics, insecticides and aspirin Nonylphenol exthoxylates, which are surfactants used in industrial applications and consumer products such as laundry detergent Butylparabens, used as a preservative in cosmetics Dibutyl phthalate, a solvent Propylparaben, another preservative The Environmental Defense Fund advised the retailer to identify chemicals that “the science was solid on” and were likely to be regulated, Michelle Harvey, the group’s supply-chain director, said in an interview. The substances chosen are also among the most common, she said.”

The article also provides some history and context regarding a prior shareholder resolution effort and efforts to reduced risks. It explains:

“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.”

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