Target, Wal-Mart team up on sustainability

Target and Wal-Mart put aside their rivalry on Thursday in their zeal to sell better makeup and toothpaste.

The nation's two largest discount retailers took the unusual step of co-hosting a meeting in Chicago to push beauty and personal care suppliers to be more transparent about the chemicals that go into their products and to better define what constitutes a sustainable product.

The forum was attended by about 75 people, including representatives from suppliers such as Procter & Gamble, Unilever, Estee Lauder and L'Oreal as well as other retailers such as CVS, Walgreens and Ulta.

"It's a pretty big deal," said Janet Nudelman, director of the Campaign for Safe Cosmetics. "It's surprising to see two such staunch competitors come together to tackle this problem."

Her advocacy group has been pushing for retailers to step in to lead the charge on an issue where there's little regulation.

In the past few years, both Target and Wal-Mart have begun to use their own internal sustainability indexes to score the products they sell based on the toxicity of chemicals used and the kind of packaging, among other measures. Those grades helped guide which products they stock on their shelves and how prominently they display them, knowing that their customers are clamoring for more natural and greener products.

But both Target and Wal-Mart were looking for ways to do more and to make change happen faster, leading to the decision to team up.

After the summit, Target leaders said they would discuss next steps with Wal-Mart in the coming days.

While this is the first time the two retailers have co-hosted a forum of this sort, they have come together in other venues. For example, they are both members of trade groups such as the Alliance for Bangladesh Worker Safety and the Sustainable Apparel Coalition.

Amy Koo, an analyst with Kantar Retail, said it makes sense for Target and Wal-Mart to come together around this issue because they both are concerned about sustainability and environmental impact. For example, she pointed to Wal-Mart's announcement earlier this year of a new line of more affordable organic food products. And Target has also introduced a new collection of natural, organic and sustainable items in partnership with brands under the "Made to Matter" label.

Because of their size, they can make things happen.

"Wal-Mart has the sheer clout in the industry as a market mover," she said, recalling how manufacturers started making high-efficiency detergent after Wal-Mart expressed a strong interest in it.

"They want to know more about where and how they are being manufactured and the long-term health effects on the body," she said.

So last fall, the Minneapolis-based retailer unveiled a Sustainable Product Standard for about 7,500 products in household cleaning, personal care, beauty and baby care. It has been scoring those products on a scale of 1 to 100.

"But what we learned in that process is that there's varying degrees of information available," Heiny said. "The transparency of information is a challenge across the board."

In some cases, she added, manufacturers themselves don't even know all of the ingredients in their products because their own suppliers might not disclose them, citing trade secrets.

Wal-Mart has been working with manufacturers on this issue for years, too. Not only does it have its own sustainability index that covers hundreds of product categories, it has also begun pushing suppliers to eliminate or reduce 10 toxic chemicals from beauty products, household cleaners and cosmetics.

"We need to move faster toward that goal because the expectations are changing," he said. "We're looking for our suppliers to demonstrate voluntary leadership and to make commitments and to move from a conversation to action."

Critics note that there are loopholes in listing of ingredients on products. For example, the ingredients that make up a fragrance used in a product don't have to be disclosed even though they can include potentially harmful chemicals.

For their part, some manufacturers have already begun to phase out some chemicals from its products. In April, cosmetics maker Avon said it would phase out triclosan, an antimicrobial agent that some consider potentially harmful, from its products. While it insisted that triclosan is safe, Avon said it made the change because of its customers' preferences.

Last year, Procter & Gamble also said it would eliminate triclosan as well as diethyl phthalate (DEP), sometimes used in fragrances, from its products by this year.

But while consumer advocates applauded Target and Wal-Mart for taking a lead on this issue, they are still pushing for more transparency in the process.