Shareholders of Largest US Home Improvement Retailer Take Action to Protect Children from Leading Cause of Lead Poisoning; Will Lowe’s Follow Suit?
BOSTON (March 1, 2017) – The Home Depot, Inc., (NYSE: HD) has responded to shareholder pressure from Arjuna Capital by agreeing to undertake a wide range of steps to improve consumer awareness about the danger posed to children and others by lead paint. In exchange, Arjuna Capital has agreed to withdraw a shareholder resolution that called on The Home Depot to respond in the wake of a recent penalty imposed by the Environmental Protection Agency (EPA). The Arjuna Capital withdrawal letter and proposal is available online at http://arjuna-capital.com/wp-content/uploads/2017/03/Home-Depot-Withdrawal-Letter_3.1.17_proposal.pdf
While public awareness of lead poisoning has been heightened in the wake of the Flint water crisis, the reality is that lead paint in buildings (often disturbed as a result of renovation and repairs) remains the leading cause of poisoning. A 2016 investigation identified over 3000 communities with poisoning rates in children higher than those in Flint at the height of the crisis.
In a letter to Arjuna Capital, The Home Depot committed to a national lead-safety campaign, including instore awareness events, online messages, digital and social media, and enhanced lead-safety training for new employees. After receiving official confirmation that steps would be taken to address shareholder concerns on Tuesday, February 28, Arjuna Capital rescinded its proposal, which asked The Home Depot to produce a detailed report on how these unsafe practices pose a risk to its employees, contractors and customers. Arjuna Capital has filed a similar shareholder proposal at Lowe’s Company Inc. Lowe’s paid a record-setting EPA fine in 2014 for allegations of similar violations.
Natasha Lamb, managing partner at Arjuna Capital, said: “Lead exposure is endemic in our society, and not only in water. It is a persistent and often invisible toxicant. While the Flint water crisis has hit the headlines, we can’t ignore the 37 million homes in this country with legacy lead paint. Disturbing that paint through home renovation leads to new cases of lead exposure every day. We simply cannot underestimate the public health threat and potential for consumer backlash presented by lead poisoning. Given children are incredibly vulnerable to lead exposures, a failure to manage this issue can place a company’s reputation at serious risk.”
Lamb added: “Fortunately, The Home Depot responded to our engagement with a very specific plan to address the issue head-on. It is not often we see a company make this type of sweeping commitment to address a problem. The Home Depot could be on the front lines of promoting lead-safety awareness. As a result, we are withdrawing our shareholder proposal.”
The Home Depot will take the following specific steps to improve lead safety awareness and take a leading role in requiring and promoting safe practices and lead testing among its customers in the construction industry, homeowners and landlords. With more than 3.5 million customers per day visiting stores, The Home Depot will: host in-store lead paint awareness events; highlight water & lead testing kits; make lead safety pamphlets available in every store; enhance lead safety information for new employees with training; provide free stir stick at the end of every paint sales transaction with message about lead safety; announce lead safety messaging over the loud speaker in stores; and include a lead-safety hold message on general phone lines. Online, The Home Depot has pledged to put lead safety messages on all paint landing pages in the center of the page. In addition, The Home Depot has committed to a lead safety awareness social media campaign.
In 2016, The Home Depot paid a penalty to the EPA for Repair Renovations and Repair (RRP) Rule violations after allegations that its services in Colorado failed to ensure proper management of lead contaminated waste debris and dust. This spurred Arjuna Capital to engage The Home Depot by filing a shareholder resolution calling for transparency on risks and corporate practices linked to lead safety awareness.
The huge societal costs of lead exposure are borne not only by the victims, but by the economy at large. In the United States, the loss of economic productivity due to childhood lead exposure is pegged at over $50 billion annually. Preventing such exposures would result in $1.2 trillion in savings. Most investors today are “universal owners”—investors with highly diversified long-term portfolios whose returns reflect the success or failure of the broad economy. The societal costs resulting from lead exposure hurt those returns.
Though sources of lead contamination have been regulated or banned, lead persists in many older buildings. Nearly 35 percent of U.S. homes have lead paint and lead contaminated dust — the leading cause of lead poisoning.
No level of lead exposure is considered safe at any age. But for children with developing brains, early exposure to this “cumulative toxicant” can cause severe neurological problems, decrease IQ rates, and produce poor behavioral outcomes. In January, the CDC’s advisory panel voted to recommend lowering what is considered an elevated lead level in children by 30 percent, to 3.5 micrograms of lead, which could lead to even greater awareness regarding the scope of the problem.
Lamb said: “As the largest US home improvement retailer, The Home Depot has a responsibility to act in good faith to ensure its customers’ safety. A failure to do so could carry severe repercussions for the brand. Our agreement with The Home Depot represents a common-sense approach to maximizing the flow of information to people most in harm’s way from lead exposure from paint and building materials. Our engagement has fostered meaningful action.”
Arjuna Capital is an investment firm focused on sustainable and impact investing. For more information, visit www.Arjuna-Capital.com.
CONTACT: Patrick Mitchell, (703) 276-3266 or [email protected]
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