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Human Capital

  • Labor Practices
  • Employee Health & Safety
  • Employee Engagement, Diversity & Inclusion

Business Model & Innovation

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General Issue Category
(Industry agnostic)

Disclosure Topics (Industry specific) for:
Household & Personal Products

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Water & Wastewater Management

Water Management

Water is vital to the Household & Personal Products industry, both as a coolant in manufacturing processes and as a main input for many of the industry’s products. Water is becoming a scarcer resource around the world due to increasing consumption as a result of population growth, rapid urbanization, and reduced supplies due to drought and climate change. Many firms in this industry have operations in regions of the world that are facing water scarcity. Without careful planning, companies could face increased costs or, worse, lose access to water in these regions, thereby presenting a risk to production. Having rigorous checks in place to ensure a steady supply of water to all factories, as well as investing in technology to increase the efficiency of water use, will help firms in this industry keep a lower risk profile as water scarcity becomes a more pressing global issue.

Product Quality & Safety

Product Environmental, Health, and Safety Performance

The Household & Personal Products industry faces growing consumer and regulatory pressure over the use of chemicals of concern, which have been linked to negative environmental externalities and impacts on human health. Some of these chemicals include persistent, bioaccumulative, and toxic (PBT) substances and carcinogenic, mutagen, or teratogenic chemicals, all of which are under increased regulatory scrutiny. Isolating and determining causal channels for negative health and environmental impacts is difficult, which means there is often a significant lag between a product’s introduction to the market and the point at which regulation and/or public opinion causes companies in the industry to reformulate. Directives in the EU and legislation in the U.S. place restrictions on or suggest alternatives to the use of harmful chemicals within the industry. Separately, the U.S. Food & Drug Administration (FDA) in the U.S. may secure greater regulatory power over chemicals used by the cosmetics industry, which would very likely result in higher costs for the Household & Personal Products industry. Large retailers have implemented programs to ban chemicals of concern in the products they sell, which is placing greater pressure on the industry. Companies that are able to anticipate the changing regulatory landscape and implement stricter processes and testing are more likely to gain a competitive advantage. Early adopters of innovations in green chemistry and the reduction of chemicals of concern may improve profitability by being better able to capture changing customer demand and avoiding regulatory burdens.

Product Design & Lifecycle Management

Packaging Lifecycle Management

The Household & Personal Products industry uses a large amount of materials for product packaging, which often constitutes a significant portion of companies’ expenses. In addition, packaging design, particularly packaging weight, has a direct impact on transportation expenses, which can be significant. At the same time, the industry is facing pressure from both consumers and large retail outlets to address the environmental characteristics of its packaging, as material extraction and waste contribute to environmental externalities. The sustainability performance of packaging depends largely on the type, use, and ultimate disposal of materials. However, companies that effectively manage the sustainability characteristics of their product packaging—including light-weighting of materials, the use of recycled content and recyclable materials, and the use of sustainably sourced materials—may be better positioned to capture shifting consumer demand and avoid (or mitigate the impacts of) regulation related to extended producer responsibility. By managing the sustainability of product packaging, companies can also potentially reduce input and transportation costs.

Supply Chain Management

Environmental & Social Impacts of Palm Oil Supply Chain

Palm oil has rapidly risen in popularity as a cheap input for a wide range of goods in the Household & Personal Products industry, including cleaning products, candles, and cosmetics. Palm oil harvesting in specific regions of the world can contribute to deforestation, GHG emissions, and other environmental and social problems. If not sourced responsibly, palm oil materials contribute to environmental and social externalities that can present reputational and regulatory risks for companies. Further, companies in this industry are exposed to the risk of supply chain disruptions, input price increases, and reputational damage associated with environmental and social externalities from palm oil sourcing. Thus, companies face pressure to track and responsibly source palm oil. Additionally, they face pressure to ensure minimum standards for working conditions in the supply chain, as the production of palm oil is often associated with labor issues. Implementing sourcing standards can contribute to reducing risks, as can innovations at the product-design phase to reduce dependence on controversial materials such as palm oil.

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