Note 10: Product stewardship

Product stewardship

Our product safety process is a key building block in the AkzoNobel safety strategy. This process protects people and the environment from unsafe exposure to hazardous materials and goes beyond the traditional approach of reactive compliance with rules and regulations. This enables us to take a leading position in Product stewardship by providing our customers with safer and more sustainable products that meet or exceed their expectations, while promoting the development and introduction of eco-premium solutions in our markets.

During 2015, we focused on the strategic priorities in our product safety process:

Priority substance management

Our company-wide priority substance process takes a systematic approach to the identification, review and management of hazardous substances that we use in our products and chemical processes. Taking this proactive approach promotes the use of safer and sustainable products and means we often take action to manage harmful substances in advance of legislation, future-proofing our products against changes in regulations.

The process identifies hazardous substances for review by scoring them on the basis of their human and environmental hazards and where societal concern exists over their use. Substances with higher scores are designated as priority substances and are subject to review by our experts. Where a safer and effective alternative exists (which is economically feasible), priority substances are substituted with less hazardous materials. In cases where substitution is not possible, a full risk assessment is carried out on the substance using state-of-the-art techniques from the EU REACH regulations.

Only when use of a priority substance can be managed safely can it be used in AkzoNobel products and processes.

• Review and management of 204 priority substances used in AkzoNobel have been completed, meeting our ambition for 2015
• Of the priority substances reviewed in the program, 56 have been phased out and 148 restricted to uses where the risk can be managed to an acceptable level
• Examples of priority substances that were reviewed and restricted in 2015 are methyl ethyl ketoxime (MEKO) and triisopropyl borate. These substances must not exceed maximum levels in AkzoNobel products and strict risk management measures must be followed when they are used
• We presented our priority substances program to stakeholders including customers, non-governmental organizations and investor associations and received positive feedback on our approach

The priority substance methodology is now embedded into key business processes and in our company raw material databases, so safer materials can be sourced in AkzoNobel. We are now developing the second phase of the priority substance program, which will update the scoring methodology and take into account new information and concerns on hazardous substances.

In 2015, AkzoNobel received the Responsible Care^® Product Stewardship Award from the European Chemicals Industry Association (Cefic) for its priority substances program. In addition, we were awarded a Product Safety award from the American Chemistry Council (ACC) and a merit award for Responsible Care^® from the Association of International Chemical Manufacturers (AICM) in China.

Regulatory compliance

In addition to complying with current regulations that affect our products and processes, we carefully monitor changes and prepare ourselves for new regulations that will impact on our businesses. Our company-wide regulatory information system (RIS) ensures up-to-the minute information relating to product safety legislation is available to all regulatory affairs professionals within AkzoNobel.

During 2015, our primary activities included:

Substance management regulations

Our REACH teams are now busy preparing information required for successful registration of our substances that are under the scope of the third phase of the EU REACH regulations. All applications for registration must be submitted by June 2018 and we are preparing carefully to achieve the objective.

In 2015, new substance management regulations for South Korea and Taiwan came into force. To support our businesses in their compliance programs, we provided training for our product safety professionals on compliance with both regulations through the AkzoNobel Academy.

Classification and labeling of AkzoNobel products

During 2015, we successfully implemented the Global Harmonized System (GHS) for labeling of chemical substances and products, in line with legislative deadlines. In our Specialty Chemicals business, a single software system for the generation of text used in safety data sheets and labels is now fully operational. An electronic awareness training module (e-learning) is also available for employees through the AkzoNobel Academy to ensure changes in labels and datasheets are understood.

Advocacy

We continue to be active in industry bodies, public forums, with customers and other key stakeholders to discuss product safety at local, regional and global level. Participating in this way gives us an opportunity to engage regulators and other stakeholders before new rules are finalized. Our aim is to support legislation, standards and initiatives that promote and support the use of safer and more sustainable products in our industry.

For example, in 2015:

• We became a partner in the Global Alliance to Eliminate Lead Paint (GAELP) – a voluntary alliance of governments, non-governmental organizations and industry, brought together under the auspices of the United Nations Environment Program (UNEP) and the World Health Organization (WHO). The objective of the alliance is to promote the phase-out of all lead-based paints and eliminate the risks these products cause. AkzoNobel fully supports the objectives of the alliance, and will share experiences of conversion from lead to lead-free paints, providing technical advice. Through the alliance we will support by engaging governments to support the development of legislation to phase out the use of lead compounds from all paints
• For our work in developing and introducing our bio-based and biodegradable chelate Dissolvine GL, the United States Environmental Protection Agency (US-EPA) recognized AkzoNobel as a leader in furthering safer chemistry and products by awarding us with the 2015 Safer Choice Partner of the Year Award in the innovation category. A US-based NGO, the Environmental Defense Fund (EDF), published this case as an illustrative example of development and successful introduction of safer chemistry into the market in their blog
• We led a consortium of manufacturers that challenged a requirement issued by the European regulatory authorities to carry out extensive animal testing on one of our products. The Board of Appeal ruled that the tests were unnecessary, as safety of the substance can be shown using existing data, preventing unnecessary testing on significant numbers of animals
• In China, through our participation in the Association of International Chemical Manufacturers (AICM), China National Coatings Industry Association (CNCIA) and the China Petroleum and Chemical Industry Forum (CPCIF), we provided input for discussions on the introduction of a coatings consumption tax

Product safety and regulatory affairs capability building

We continue to build a community of Product Safety and Regulatory Affairs (PSRA) professionals within AkzoNobel. In 2015, we focused on developing the different learning activities within Level 1 and Level 2 of the curriculum, which includes training and e-learning for dangerous goods, priority substance management, the US Toxic Substances Control Act, Korean and Taiwan Reach and environmental risk assessment.

• All targeted employees in the Level 1 PSRA group for 2015 have completed the Level 1 program
• In 2016, we will continue to design and deliver further Level 2 training courses and will introduce Level 3 (advanced) training for our PSRA community. The courses will be set up according to the competency framework which maps out the skills needed to progress within the PSRA function in AkzoNobel