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Why Be Proactive?

The Value of Proactive Sustainable Chemicals Risk Reviews

Companies that take a proactive stance on product and process sustainability are companies that have a keen interest in minimizing risk and maximizing long-term success. The business case is strong. Minimizing product risk, for example, can significantly reduce compliance surprises, liability issues and business disruptions, which also lower operating costs. Establishing a record of responsibility can also improve your reputation while attracting customers and investors.

Consider the California Safer Consumer Products (SCP) regulation. As the regulation is implemented by California's Department of Toxic Substances Control (DTSC), certain notifications and requirements must be fulfilled by responsible parties within a specified schedule. If you receive a notification letter, for example, asking if and why you are using one of their listed chemicals of concern, you will want to know the answer before the letter arrives. You'll also want to meet requirements for an alternatives analysis within a comfortable margin of time.

Don't let the DTSC catch you by surprise. Be proactive and strategic, and consider the services available to you right now via Cardno. From understanding the SCP regulation to performing reliable and comprehensive alternatives analyses, our experts are ready to help you evaluate your products and the chemicals they contain.

Contact us today. Meanwhile, check out the business case for being proactive:

Investing in Compliance

According to a benchmark study of multinational organizations by Ponemon Institute in January 2011, investing in compliance can help avoid business disruption and associated costs of non-compliance (e.g. due to laws, regulations and policies). The average cost of non-compliance is double the cost of compliance. Furthermore, non-compliance consumes cash flow, which can add 30% in opportunity costs – reflecting lost growth opportunities due to compliance infractions and loss of reputation.

 

Profitability and Stock Performance

Researchers at the Harvard Business School reviewed 18 years of data on more than 700 publically traded companies across sectors to determine if sustainability pays. The findings, reported in The Impact of Corporate Sustainability on Organizational Processes and Performance, showed that high sustainability companies are more successful than their less sustainable peers in both profitability and stock performance. One dollar invested in the most sustainable companies in 1993 was worth $22.60 by the end of 2010. The less sustainable group returned just $15.40 on the same invested dollar. This finding suggests that companies can adopt environmentally and socially responsible policies without sacrificing shareholder wealth creation.

 

Follow the Money

Socially responsible investment (SRI) funds are a relatively new category of investments. SRI funds make decisions based on a company’s social, environmental, and governance performance, along with financial returns.   According to the April 24, 2013 issue of Forbes Magazine, SRI investing has grown to $3.74 trillion in total managed assets.

 

The Cost of Falling Behind

Proposition 65 requires labels for products containing chemicals considered by California to cause cancer or reproductive harm. It has cost manufacturers an average of $10-$15 million per year in settlement costs from 2000-2011, with a peak year of $25 million in 2008. These are just the cash costs paid to the State. When one includes the cost of internal and external lawyers, compliance personnel, etc. the cost escalates exponentially.