Burlington Stores – Chemical Policy Report (2022)

Outcome: Successfully withdrawn following Burlington Store’s commitment to set time bound targets to reduce its chemical footprint in its own operations and retain a chemical footprint consulting expert within 12 months to establish a strategy to address the chemical footprint of certain merchandise vendors. Immediately following our withdrawal, in April 2022, Burlington disclosed a Chemical Management Program on its website, inclusive of a Chemical Compliance Manual, a Restricted Substance List (RSL), and commitment to guide vendors on identifying chemicals of concern and seeking alternatives.

The costs of environmental chemical exposure to the health of the global economy raises significant concerns for investors.

Economic costs are rising: a 2017 study showed that costs associated with environmental chemical exposures worldwide likely exceed 10 percent of global GDP, or 11 trillion dollars. (1)

A 2021 study published in the journal Environmental Pollution estimates that premature deaths linked to a common class of chemicals found in food containers, cosmetics and children’s toys cost the US about 40 to 47 billion dollars annually in lost economic productivity.

Regulatory risk is on the rise. Since 2018, 38 states (up from 35) have adopted 257 policies (up from 173) to identify, limit, or ban the use of harmful chemicals. (2)

Burlington Stores discloses information on its management of certain sustainability issues according to selected standards from the Sustainability Accounting Standards Board (SASB). One of those standards relates to processes to assess and manage risks and/or hazards associated with chemicals in products. The SASB standard requires disclosure regarding third-party branded products and private label products offered for sale. (3) Yet Burlington’s disclosures and activities principally relate to handling hazardous waste – a significant and concerning gap in its policies and practices. (4)

In contrast, the company’s peers are taking steps to eliminate and reduce chemicals of concern before a product enters the waste stream. (5) For instance, Target’s chemicals policy addresses the company’s “entire value chain, operations and every product” it sells, including both private label and brand name products. (6) Walmart intends to reduce the chemical footprint of its consumables by 10 percent by 2022 for private label and independently branded products. (7)

Target, Walmart and Dollar Tree participate in the Chemical Footprint Project (CFP) Survey- a tool which enables companies to map gaps in existing practices. The CFP defines a chemical footprint as the total mass of chemicals of high concern in products sold by a company; used in its manufacturing operations, facilities, and by suppliers; and contained in packaging. The CFP has identified over 2,200 chemicals defined by authoritative bodies known to be harmful to human health and environment.

TJX Companies has announced chemical reduction initiatives and is using the CFP framework to develop policies limiting chemicals of concern in products.

Improving its practices may help unlock important growth opportunities for Burlington Stores as consumer interest in transparency and environmental accountability from retailers grows.

Resolved: Shareholders request Burlington Stores issue a report, at reasonable cost and omitting proprietary information, describing if, and how, it plans to reduce its chemical footprint.

Supporting Statement: In the report shareholders seek information, at board and management discretion, on the relative benefits and drawbacks of integrating the following actions: