Calvert News & Commentary

Johnson & Johnson Cleans up Its Products

The company will phase out formaldehyde and other toxic chemicals.

9/10/2012

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After years of pressure from environmental and consumer groups, Johnson & Johnson (NYSE: JNJ) recently announced plans to phase out "chemicals of concern" from baby care and adult products over the next three years. These chemicals, including formaldehyde and 1, 4-dioxane, have been linked to cancer, asthma, or other health problems, or to potential environmental harm. Although a European Union directive bans the sale of cosmetics with many of these chemicals in Europe, the U.S. regulation governing such chemicals—widely recognized as outdated—continues to allow small amounts of chemicals of concern to be used in personal care products.

Johnson & Johnson (J&J) is phasing out chemicals of concern from its baby care products, including the No More Tears® brand of baby shampoo, by the end of 2013, and will reformulate all of its cosmetic products by the end of 2015. J&J has also disclosed its policies relating to product safety online; these policies explain the process that J&J uses to assess product safety internally and ensure that chemicals of concern are removed from their supply chain.

Consumer product companies that fail to address chemicals of concern may put consumers and shareholders at risk. As watchdog groups publish data on cosmetic safety and cleaning products, consumers are able to make more informed purchasing decisions that reward companies that have more cautious chemical policies. When stiffer U.S. chemical safety regulations are passed, those companies will be a step ahead of competitors.

As of 8/22/12, accounts managed by Calvert Investment Management, Inc. held securities issued by Johnson & Johnson. Calvert may or may not still invest in, and is not recommending any action on, any companies listed.

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