Environmental & Regulatory Overview

Using Vinyl as a Covering FabricOctober 16th, 2013

Arnold Toynbee

Life and law must be kept closely in touch, as you can’t adjust life to law, you must adjust law to life. The only point in having law is to make life work. Otherwise there will be explosions.

What has this got to do with us?

• Health•Carcinogenicity•Reproductive toxicity•Mutagenicity•Developmental toxicity•Endocrine disruption•Neurotoxicity•Persistent bioaccumulative toxicity

• Environment

What has this got to do with us?• Chemicals Under Review• Dioxin• Manufacturing Byproduct

• Heavy metals• Pigments

• Flame Retardants• Antimony Oxide

• Volatile Organic Compounds• Coatings• Color Printing• Adhesives / Cleaners

• Climate Change• Insurance Driven Programs

Regulatory Actions

• International Regulations•REACH (Registration, Evaluation, Authorization and Restriction of Chemicals)•Hazard Communication (GHS)

• Environmental laws by country•Europe•China

China• Air Pollution Control Act (China)• Animal Epidemic Prevention Law 1997• Basic Environment Act• Drinking Water Management Act• Environmental Impact Assessment Act• Environmental Protection Law 1989• Environmental Protection Law of the People's Republic of China

(For Trial Implementation) 1979• Fisheries Law (2004 Revision)• Fisheries Law 1986• Flood Control Law 1997• Forestry Law 1985• Forestry Law of the People's Republic of China (1998)• Grassland Law 1985• Law of the People's Republic of China on Prevention and Control of

Pollution from Environmental Noise

China

• Law of the People's Republic of China on Prevention and Control of Water Pollution

• Law of the People's Republic of China on the Prevention and Control of Environmental Pollution by Solid Waste

• Law of the People's Republic of China on Water and Soil Conservation• Law on Desert Prevention and Transformation 2001• Law on Marine Environment Protection 1983• Law on Mineral Resources 1986• Law on Prevention and control of atmospheric pollution 2000• Law on Prevention and Control of Water Pollution 1996• Law on Promoting Clean Production 2002• Law on Protecting Against and Mitigating Earthquake Disasters• Law on the Prevention and Control of Atmospheric Pollution• Law on the Prevention and Control of Environmental Noise Pollution

1997

China• Law on the Prevention and Control of Solid Wastes Pollution• Law on the Protection of Cultural Relics• Law on the Protection of Wildlife (2004 Revision)• Law on the Protection of Wildlife 1989• Law on Water and Soil Conservation• Marine Environmental Protection Law of the People's

Republic of China (1983)• Marine Pollution Control Act• Public Nuisance Dispute Mediation Act• Soil and Groundwater Pollution Remediation Act• Water Law 1988• Water Law 2002 (the modified edition)• Water Pollution Control Act (China)• Wildlife Protection Law

Regulatory Actions• U.S.A. REGULATIONS• For historical precedence and worldwide emulation, the US

has been a world leader in the development and implementation of environmental law. While subject to criticism at home and abroad on issues of protection, enforcement, over-regulation, and imposition of externalities, the country remains an important source of environmental legal expertise and experience.

• EPA TSCA Section 5(b)(4) Concern List: Transparency• Air Quality Regulations•Water Quality Regulations•Waste Management Regulations

Toxic Substances Control Act

• EPA currently lacks adequate information on potential chemical risks.

• TSCA’s regulatory framework impedes EPA’s ability to control chemical risks by placing a high burden on EPA to show unreasonable risk before acting.

• TSCA limits EPA’s ability to share confidential information.

EPA Quietly Withdraws Two Proposed Chemical Safety Rules• One of the rules was a proposal to add Bisphenol A (BPA) to the

list of "chemicals of concern" that would be subject to more scrutiny. The EPA also proposed listing eight different types of phthalates, another group of chemicals often used in plastic products, and several types of flame retardants known as polybrominated diphenyl ethers (PBDEs).

• The agency was "concerned that the hazards of these substances and the magnitude of human and/or environmental exposure indicates that they may present an unreasonable risk to human health and/or the environment.“

• The second rule that EPA withdrew would have forced companies to disclose to the public the chemicals used in products and the health and safety studies the companies have conducted on those chemicals -- much of which companies have been allowed to protect as "confidential business information."

Regulatory Actions

• STATE REGULATIONS•California• Prop 65• California Safer Consumer Products

Regulation – Chemicals of Concern• Cal technical bulletin 117

•U.S. Northwest•U.S. Northeast

California Safer Consumer Products Regulation – Chemicals of Concern

• The regulations will take effect on October 1, 2013.

• Purpose: To eliminate or reduce the adverse public health and environmental impacts of consumer products through product redesign or reformulation, manufacturing process redesign, removal of COCs in products, and other mechanisms.

• The regulation establishes a process for identifying products that contain COCs as Priority Products.

• The product manufacturer, importer, or retailer (collectively referred to as “responsible entity”) is to conduct “Alternatives Analysis and implement “Regulatory Responses”.

NGO’s

• Healthy Building Network: Pharos• Cradle to Cradle•Health Product Declarations•Chemical “Red Lists”

NGO’s

• The Nature Conservancy• Worldwatch Institute• Intergovernmental Panel on Climate

Change (IPCC)• United Nations Environment Programme

(UNEP)• World Nature Organization (WNO)• World Wide Fund for Nature (WWF)• Greenpeace

Industry Self-Regulation and Voluntary Environmental Compliance

• Self Imposed Requirements• USGBC (LEED)• Green Globes • Bosch N2580 Supplier Declaration (German)• Automotive Product Standards• Industry Responses to Customers and Regulatory

Requirements• Sustainability Standards• Product Transparency Declarations• Life Cycle Analysis

Note:

What do they want?• No risk• No surprises• Transparency

Why is there a need for Transparency?

• Proliferation of green claims in the marketplace. • More products are being brought to market faster

than ever before. • Health issues are taking the lead over other

sustainable product attributes. • Two thirds of manufacturers strongly agree that

the environment is becoming more important; hence increased demand for eco-friendly products.

• 53% of purchasers are demanding more eco-friendly products at same cost as others.

Design Professionals want credible information

• 90%: Want scientific evaluation of products

• 89%: Want tools to compare the sustainability performance of products

• 88%: Want access to specific sustainability performance required to achieve certification

Possible Ways to Respond

• Ignore, continue with business as usual, hope it goes away

• Green Chemistry•Alternatives• May not be or are not available• Durability is an issue for non PVC• Right chemistry for consumer goods

Possible Ways to Respond• Multi-attribute standards• Wallcovering• Flooring• Roofing• Carpeting• Furniture

• ISO 14000• Product Category Rules development• Life Cycle Analysis• Environmental Product Declaration (EPD)

Environmental Product Declaration

• A comprehensive, internationally-harmonized report that documents the ways in which a product, throughout its lifecycle, affects the environment. Considered an ISO Type III ecolabel, EPDs do not act as product ratings rather they help purchasers better understand a product’s sustainable qualities and environmental impacts.

New Business Actions/Responses• Sustainability Standards• Product Transparency Declarations versus Health

Product Declarations• Bottom line: “Know your product characteristics!”• Define the production process.• Define the distribution, storage, and use processes.• Define and provide details of the end-of-life stage.

Waves of Environmentalism• 1960s events ranging from the publication of Rachel Carson’s book

Silent Spring to the national broadcasting of a burning Cuyahoga River gave rise to the establishment of the USEPA and the passage of the Clean Air Act - best be described as a regulatory wave.

• The second wave of environmentalism can be characterized as a policy wave. Following the Exxon Valdez oil spill in 1989, the nonprofit organization Ceres published the Valdez (now Ceres) Principles.

• The most recent wave of environmentalism could be labeled the corporate sustainability wave. During this wave, there has been an unprecedented involvement of business, characterized by corporate initiatives. The U.S. Climate Action Partnership (USCAP) brought together leading corporations as diverse as Caterpillar and Pepsico and environmental NGOs such as the National Resources Defense Council (NRDC) and World Resources Institute (WRI) to establish national GHG emission reduction targets.

Environmental Action Steps to Consider

• Pursue a sustainability reporting system that exemplifies a similar transparency and rigor as the system used for financial reporting.

• Engage CFOs in sustainability efforts, such as choosing appropriate tools to measure, monitor and report on environmental issues in a way that can measure progress, create value and enhance investor confidence. Embed the sustainability strategy into the core strategy of the business.

• Recognize that employees are a key stakeholder and a vital source of sustainability engagement and ideas to enhance the company’s sustainability journey. Employee involvement is needed to embed sustainability into the corporate culture.

Environmental Action Steps

• Understand that greenhouse gas disclosure has value outside of the regulatory arena due to its utility for stakeholders, investors, customers and suppliers. Develop a risk management plan addressing contingencies for disruptions in access to key resources, and integrate risk assessments and plans in sustainability reporting.

• Understand the value of sustainability reporting to ranking and ratings organizations, particularly those of interest to investors. Consider third-party assurance to enhance the value of such reporting by shareholders and others.

Contact Information