The Walt Disney Company – Chemical Management

Outcome: Successfully withdrawn following a commitment to take several actions in 2023 to enhance its disclosures and strategy to reduce priority chemicals. Included in the disclosures, Disney will address its baseline, how the company will track improvement and provide information on what it considers safer alternatives.

Resolved: Shareholders of The Walt Disney Company (“Disney” or the “Company”) request that the board of directors’ report to shareholders, at reasonable expense and excluding proprietary information, on the outcomes of the Company’s chemical reduction efforts by publishing quantitative and qualitative data on progress to eliminate the use of chemicals of concern.

Supporting Statement: Shareholders leave the specific disclosures to management’s discretion, but recommended considerations include:

• Evaluation of vendor compliance with the Company’s chemical policies;
• Measure of chemical footprint in private label and third-party products;
• Set reduction goals, and track and disclose progress against a baseline; and
• Disclosure of a Restricted Substances List.

Whereas: Chemicals have been important drivers of economic growth, but the cost of poor management and the long-term impacts of chemicals of concern can raise significant concerns for investors. The costs associated with environmental chemical exposures worldwide likely exceeds 10 percent of global GDP or $11 trillion.1 Childhood cancer is up 43% from 1975-2018, and exposure to toxic chemicals is linked in part to this rise.2 Emerging issues, like the ubiquitous use of Per- and Polyfluoroalkyl substances (PFAS), or “forever chemicals” is creating financial harm for investors. Stockholders of PFAS producers lost $82 billion in value between January 2018 and September 2020, and the long-term costs to producers and throughout the value chain are still mostly unknown.3 In response, regulations are on the rise. For example, 289 policies in 38 states setting new restrictions on the use of toxic chemicals in products.4
Disney states that its approach to chemicals management meets or exceeds existing regulation. It takes into “consideration how chemicals are used in Disney-branded products, current and reliable scientific information about chemicals, and the availability of safe and feasible alternatives” yet the company does not set goals or disclose progress against its strategy.5
Further, recent ingredient testing reports of Disney products are troubling. Concerning levels of PVC, phthalates, flame retardants and lead were reportedly detected in several Disney branded products raising potential harm to its reputation.6
Peers, in contrast, are disclosing active strategies which can improve product safety and reduce liability.

• Hasbro, Dollar Tree, Target, and Walmart, participate in the annual Chemical Footprint Project Survey – a tool which benchmarks corporate reduction of the use of chemicals of high concern.7 Walmart eliminated 37 million pounds of toxic chemicals as part of its chemical footprint reduction program.8

• Hasbro has a publicly available restricted substance list and requires vendors and suppliers to provide bills of substances and toxicological assessments for materials in their products.9

Given the apparent impact of toxic chemicals on the economy, human health, and the environment, proponents believe Disney has a clear responsibility to investors and other stakeholders to measure and reduce its chemical footprint.

3 V. Zainzinger, “What difference does green investing make?”; Chemical &Engineering News, November 16, 2020

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