Trillium Asset Management Withdraws Shareholder Proposal as Avon Agrees to Phase Out Dibutyl Phthalates From Its Products (A)

Trillium Asset Management announced today that has withdrawn a shareholder proposal from Avon Products in response to the company’s decision to effectively implement it. (See below for proposal text.)
The shareholder proposal, which appears as item number 6 on the proxy ballot, called for the preparation of a report to shareholders “evaluating the feasibility of removing DBP (dibutyl phthalates) from Avon products.” In a letter to Trillium Asset Management, Avon confirmed that it is reformulating its products in Europe, has already done so for its US products, and is “determining the feasibility” of removing DBP from its products in non-U.S. and European markets.
“We’re very pleased with Avon’s decision and look forward to periodic implementation updates,” said Shelley Alpern, Director of Social Research & Advocacy for Trillium Asset Management.
DBP is a plasticizer found in various cosmetics ranging from nail polish to lipsticks. According to a report by the Environmental Working Group (“Beauty Secrets: Does A Common Chemical in Nail Polish Pose Risks to Human Health?” November 2000), phthalates may be linked to the following disorders in human males: declining sperm counts, and a rise in hypospadias, undescended testicles and testicular cancer. Male fetuses and young boys exposed to phthalates may be particularly vulnerable.
In January 2003, the European Parliament prohibited the use of DBP found in the products cited above, ordering member states to comply by March 2005.
Trillium Asset Management is supporting a similar resolution filed by Domini Social Investments urging the company to study the removal of parabens from its products. Parabens are estrogenic preservatives and disruptive of normal hormone functions. Estrogenic substances mimic the function of the naturally occurring hormone estrogen. Estrogen has been shown to control the growth of breast cells, and exposure to external estrogens has been shown to increase the risk of breast cancer.
“The phthalates policy change is a small but important step by a corporate giant,” said Barbara Brenner, the executive director of Breast Cancer Action, a San Francisco-based advocacy group. “It’s important for the people Avon markets to, many of whom are women of childbearing age, and it’s important for future generations.”
Avon Products is the largest corporate fundraiser of breast cancer charities. Accordingly, Trillium Asset Management has been urging Avon to adopt a precautionary approach with respect to any suspected adverse health impacts of its product ingredients. Trillium Asset Management is also supportive of the goals of Follow The Money: An Alliance for Accountability in Breast Cancer. The Alliance is seeking greater transparency and accountability with respect to funding, the use of community advisory boards to decide where money is allocated, and the allocation of more research dollars to under-funded areas such as the exploration of environmental links to breast cancer.
AVON PRODUCTS SHAREHOLDER PROPOSAL
WHEREAS:
According to www.Avon.com, the following Avon products contain dibutyl phthalate: NAILWEAR Nail Enamel (four shades), and NAIL EXPERTS Speed Dry Top Shine, Tough Enough Base/Top Coat, and On the Mend Nail Mender.
In March 2003, the U.S. Department of Health and Human Services described DBP as “one of a group of industrially important chemicals known as phthalates…used in cosmetics and other personal care products.” Results from laboratory animal studies reviewed by the Department included reduced fertility and abnormal development of the male reproduction system. The document states: “It is reasonable and prudent to conclude that the results reported in laboratory animals indicate a potential for similar or other adverse effects on humans.” (NTP-CERHR Monograph on the Potential Human Reproductive and Developmental Effects of Di-n-Butyl Phthalate)
In January 2003, the European Parliament prohibited the use of DBP found in the products cited above, ordering member states to comply by March 2005;
The Centers for Disease Control and Prevention have found that:
· Phthalate exposures are both higher and more common than previously suspected;
· Levels in some women of childbearing age exceed the government’s safe levels set to protect against birth defects; and,
· DBP exposures for more than 3 million women of childbearing age may be up to 20 times greater than for the average person in the population.
According to the organization Health Care Without Harm, “Using CDC sample data, an estimated 5% of women of reproductive age from the general population are contaminated with 75% or more of the amount of just DBP that may begin to impair normal reproductive trace development.” The organization believes that high levels of DBP in cosmetics could be responsible for the above-average levels of the compound found in younger women.
According to the Environmental Working Group (www.ewg.org), “Although a cause and effect relationship has not been established, the ubiquity of phthalates in the human population creates a biologically plausible presumption that phthalates may be contributing to these problems.” Until proven safe, the report asserts, phthalates should be considered as potential contributors to the following disorders in human males: declining sperm counts, and a rise in hypospadias, undescended testicles and testicular cancer (“Beauty Secrets: Does A Common Chemical in Nail Polish Pose Risks to Human Health?” November 2000).
Our competitors Aveda and nail polish manufacturer Urban Decay reformulated their products to be free of phthalates.
BE IT RESOLVED:
The shareholders request that Avon Products prepare a report to shareholders by October 2004 evaluating the feasibility of removing DBP from Avon Products. The report should be produced at reasonable cost and omit proprietary information.
SUPPORTING STATEMENT
Our company deserves high praise for its commitment to women’s health in its philanthropic activities. We believe that it would be inconsistent for Avon not to commit to finding alternative product ingredients for chemicals that may pose risks to human health.