Note 14: Product stewardship

Product stewardship

Our ambition is to be a leading company in product stewardship and to create business value from it by providing safer and more sustainable solutions for our customers.

Continuous improvement

In 2016, all businesses completed the AkzoNobel Product stewardship continuous improvement tool (PSCIT) to assess their level of maturity in the eight key elements of product stewardship following the principles of Responsible Care^® and Coatings Care^®. Each business provided an improvement plan and agreed next steps towards achieving a leading level in product stewardship.

Customer focused product stewardship

Working with our commercial excellence and marketing teams, we piloted our customer focused product stewardship (CFPS) process in our Marine Coatings business. This systematic process identifies market segments and customers where product stewardship issues are important and influence our customers’ choice of product. We then meet with them to learn more about their current and future product stewardship needs and feedback into key business processes so that a solution from AkzoNobel can be provided or developed. In 2017, we will further refine and develop the CFPS process and integrate it into company processes.

Priority substance management

During 2016, we continued our proactive approach to the review and management of hazardous substances in our products and processes through our priority substance process. Taking this approach promotes the use of safer and more sustainable products and means we often take action to manage potentially harmful substances in advance of legislation, future-proofing our products against changes in regulations.

• Between 2012 and 2015 we completed the review and management of 204 priority substances. In total, 56 have been phased out and 148 restricted to uses that are proven to be safe
• In 2016, we reviewed the impact of the priority substance program to ensure the process is fully optimized and embedded in key business processes in the company, including innovation, raw material procurement and commercial excellence. We also provided key personnel with training in priority substance management to ensure the required risk management measures are in place at our manufacturing sites
• The scoring methodology used in the substance prioritization process has now been updated, taking into account new scientific information and public concerns over hazardous substances. A further 51 priority substances have been identified which will be reviewed in a second phase of the program. In 2016, we reviewed and managed 17 of these priority substances
• Examples of priority substances that were reviewed and restricted in the second phase of the program in 2016 are diethanolamine and imidazole. Strict risk management measures must be followed when they are used

We have presented our priority substances program to stakeholders, including customers and NGOs and investor associations, and received positive feedback to our approach. Taking this proactive approach to substance management enables us to take a leading position in sustainable product stewardship and supports the development and introduction of eco-premium solutions onto the market.

Regulatory compliance

In addition to complying with regulations which are in place 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. In 2016, we were made aware of proposals for new or modified substance management rules in several countries in which we operate, including the US, Thailand, Brazil and Indonesia.

Compliance with substance management regulations

Our REACH teams are busy preparing information required to submit 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 2018 and we have set targets to monitor our progress. We are on target to achieve our objective.

In 2016, we worked with our customers to ensure that all AkzoNobel products manufactured and imported into South Korea were reported to the government in compliance with the new K-REACH rules. We are also preparing to comply with the reformed substance management rules in the US (TSCA), Brazil and Thailand. To support our businesses in their compliance programs, we provided training for our product safety professionals on compliance with these regulations through the AkzoNobel Academy.

Advocacy

We continue to be active in industry bodies, in public fora, with customers and other key stakeholders discussing product safety at the local, regional and global level. Participation 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. Some notable 2016 developments are listed below:

• We identified, reviewed and prioritized issues for advocacy where there is new legislation under discussion that could impact on our businesses. Key issues include endocrine disrupting substances, nanomaterials, sensitization (substances causing an allergic reaction), and volatile organic compounds in China
• We continued to advocate a progressive approach to the management of substances of very high concern (SVHC) at the European chemicals industry association (CEFIC)
• As a partner of the United Nations Environmental Program (UNEP) Global Alliance to Eliminate Lead Paint (GAELP), we continued to support the development of legislation to phase out the use of lead compounds from all paints
• Working with the Green Chemistry Council and major retailers in the US, we agreed and signed the “Joint statement on using green chemistry and safer alternatives to advance sustainable products”
• 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 into discussions on the introduction of a coatings consumption tax

Product safety and regulatory affairs capability building

We continue to build our community of product safety and regulatory affairs (PSRA) professionals within AkzoNobel, providing learning activities for them in line with the PSRA curriculum. Where appropriate, we also invite employees from other functions to training activities when PSRA issues impact on their work. In 2016, we focused on developing and delivering the learning activities within Level 1 and Level 2 of the PSRA training curriculum in all regions, including training on management of priority substances, transport of dangerous goods, substance management regulations in Japan, the US and the Philippines. We also developed and piloted a Level 3 (advanced) learning activity on effective advocacy for PSRA professionals.