P&G Becomes Improbable Supporter of Ingredient Disclosure Rule

(Bloomberg) -- It took more than a decade, but California has a new law requiring extensive labeling of ingredients in cleaning products, and it got support from what might seem the unlikeliest of advocates: product manufacturers themselves.

Companies like Procter & Gamble Co. and Easy-Off maker Reckitt Benckiser Group Plc, after years of arguing the need to preserve their proprietary formulas in detergents and oven cleaners, came to the table with lawmakers and health and environmental groups and ultimately signed on.

P&G, which makes Mr. Clean and Comet, and other manufacturers have also faced growing pressure from retailers to disclose -- and in some cases, remove -- ingredients. Merchants are responding to customers' demands for transparency about chemicals like formaldehyde and phthalates.

“The timing was right,” said Julie Froelicher, P&G's North American regulatory and technical relations manager. A “growing chorus” of consumers want to know more about what's in their products, she said.

But pushback is building, too. The Trump administration's deregulation drive and a raft of disclosure measures in other states has prompted about 50 trade groups to lobby for a national labeling standard that would challenge rules like the new California law, Bloomberg reported last month. Opponents say such a move would weaken consumer protections. States have long set the pace for regulating consumer safety, with California leading the way.

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Governor Jerry Brown signed California's Cleaning Product Right to Know Act into law in October. The first phase takes effect in 2020, when manufacturers of detergents, disinfectants and other household products will be required to list online any substances linked to harmful health effects, along with most other ingredients. By January 2021, they will need to do so on product labels as well.

In New York, meantime, Governor Andrew Cuomo used his 2017 state-of-the-state report to announce that manufacturers would be required to list cleaning-product chemicals on easily searchable websites. Though New York has had disclosure regulations on its books for four decades, they haven't been enforced. The state is now working to finalize updated rules.

According to the Environmental Working Group, a co-sponsor of the California legislation, only 7 percent of cleaning products adequately list ingredients.

Wal-Mart Move

Yet pressure on manufacturers is growing from leading retailers like Target Corp. and Home Depot Inc. Last year, Wal-Mart Stores Inc. specified eight chemical groups it wants eliminated, including formaldehyde, and this year, expanded the list of substances it's encouraging suppliers to remove.

“Over the years, I think that a lot of the fundamental attitude of ‘we're not doing this' eroded, in part because of what Wal-Mart was doing,” said Deborah Goldberg, a managing attorney at Earthjustice, a group that brings lawsuits to challenge or enforce environmental policy. Earthjustice sued P&G, Reckitt Benckiser, Church & Dwight Co. and Colgate-Palmolive Co. in 2009 to force them to comply with the New York state rules issued in the 1970's, though not enforced. The case was dismissed.

A lot has happened since then. P&G began posting a list of ingredients in its goods in 2012, along with a list of substances it avoids. But it wasn't product specific, so a consumer couldn't tell which chemicals were in which items. This year, the company said it would begin listing ingredients in fragrances used in products like Febreze and Herbal Essences. Companies frequently exclude specific components in favor of generic terms like “fragrance,” which can mask dozens of ingredients.

Sick Cleaners

Proponents of the California law say there's plenty to be concerned about in household cleaners, including ingredients that may cause cancer or reproductive harm. One of the sponsors, Women's Voices for the Earth, cites studies showing that workers who clean for a living have higher rates of asthma and are more likely to have children with birth defects.

State Senator Ricardo Lara, who sponsored the law in the legislature, knows those concerns well. His immigrant mother spent years cleaning homes in some of the state's wealthiest communities. She'd often come home feeling dizzy or sick. As a result, “this issue is very personal on multiple fronts,” Lara said.

Disclosing proprietary formulations was a sticking point in the discussions for companies like P&G. The sides finally agreed to list substances linked to harmful effects while letting companies claim trade-secret protections for other ingredients, said Janet Nudelman, director of program and policy for Breast Cancer Prevention Partners, who helped negotiate the legislation.

“Social change doesn't happen overnight,” said Nudelman, who credited the confluence of consumer activism and the push by retailers for helping drive the bill into law in California. “This conversation has really evolved and changed over the past 10 years.”

Changed Positions

Like P&G, fragrance maker Givaudan SA was initially opposed to the California measure, but came around to support it. The Swiss-based company backs more disclosure and has been in discussions for years, said Greg Adamson, senior vice president for regulatory affairs, product safety and sustainability.

Previous attempts to establish a rule lacked clarity, and “there wasn't a willingness to have a frank and good-faith type of discussion” about concerns like proprietary information and technology, Adamson said.

The Consumer Specialty Products Association, a trade group whose members include P&G, Clorox Co. and SC Johnson, according to its 2016 annual report, also supported the law in the end. As negotiations continued, some other powerful opponents -- the California Retailers Association, American Cleaning Institute and International Fragrance Association's North America unit -- changed their stance from opposed to neutral.

“Our members needed assurances that confidential business information would be protected to safeguard our members' brands and investments in innovation,” said Steve Caldeira, CSPA's president and chief executive officer.

Grocery and chemical trade groups were among those that remained opposed, arguing the rules were unclear, used questionable science and could prompt “frivolous, misguided lawsuits,” according to an August letter sent to the State Assembly.

Federal cleaning-product disclosure bills introduced by former New York Representative Steve Israel and California Representative Raul Ruiz, both Democrats, haven't progressed.

But with two of the largest states creating a de facto national standard, “companies now have a much greater incentive to formulate away from some of these chemicals of concern,” said Sarah Ervin, director of governmental affairs at Honest Co., a maker of personal-care and baby products. She helped negotiate the California law.

It won't be easy. Though CSPA started a voluntary labeling program in 2010, Caldeira said, the new law means members will all have to make changes and invest “a lot of time and resources into meeting the requirements.”

To contact the reporter on this story: Lauren Coleman-Lochner in New York at llochner@bloomberg.net.

To contact the editors responsible for this story: Nick Turner at nturner7@bloomberg.net, Lisa Wolfson, Jonathan Roeder

©2017 Bloomberg L.P.