Green Seal Defends GS-37 Revision

Green Seal, a third-party certifier of green products and services, says increased concerns about the impact of chemicals on health, particularly children’s health, and the environment are what led to the recent revision of GS-37, its standard for institutional cleaning products.

Green Seal’s defense comes in the wake of the Carpet and Rug Institute (CRI) announcing it will no longer recognize GreenSeal’s GS-37 standard as a “green” certification for its Seal of Approval Carpet-Cleaning Solutions.

In the final analysis, Green Seal says the success of the revision of GS-37 will be measured by the extent to which it changes the landscape of cleaning products.

“We trust that government agencies that are charged with protecting the health of their citizens will choose to support a standard that protects the health of children and other vulnerable populations,” says Dr. Arthur Weissman, president and CEO of Green Seal. He anticipates “that many progressive manufacturers will see the benefit of conforming to a leadership standard that promotes more sustainable cleaning products that will ensure a healthier, cleaner environment for all.”

Green Seal first published the standard for institutional cleaning products on Oct. 2, 2000, and says GS-37 has become the single most-referenced environmental standard in the cleaning industry. But CRI President Werner Braun said, “GS-37 is flawed, and CRI cannot support it.”

According to CRI, Green Seal failed to follow its own written guidelines for consensus standard setting, specifically in the areas of stakeholder input and risk assessment.

Prior to its decision, CRI had accepted GS-37 as a component for its Seal of Approval Green designation, which identifies spot cleaners, pre-sprays, and in-tank cleaning solutions that are environmentally responsible as well as effective.

CRI cited several reasons for withdrawing its support of GS-37:

• GS-37 measures product efficacy against a ‘nationally recognized’ product rather than against an approved standard. GreenSeal did not allow the participation of all stakeholders in the development process for GS-37;

• GS-37 arbitrarily bans chemicals according to a list, without regard for proper risk assessment, a practice that runs contrary to accepted scientific practices;

• At various points, it seemed that peer reviewed scientific data was discounted in favor of preconceived bias on the part of the standard developers;

• GS-37 was released without a second ratifying ballot, even after a first ballot failed to achieve a majority.

Green Seal says its guidelines are clear. It says the process strictly followed the ISO 14024 standard. These guiding principles for environmental labels are different from ANSI guidelines in that they require that reasonable efforts be made to achieve consensus but do not require that all stakeholders vote the same way.

Noting that Green Seal is accredited by the American National Standards Institute (ANSI) as a standard-setting body, Braun said he would expect the company to follow the ANSI process of standard development.

He added that CRI would reconsider its decision if Green Seal were to “reopen the GS-37 standard and develop it in an environment that respects the consensus standard-setting process.”

While Green Seal standards have achieved 100 percent consensus in the past, the votes for GS-37 were split. Given the significance of GS-37 and the controversy that surrounds all chemical restrictions, this was to be expected, says Green Seal. “It is difficult to reach total consensus with leadership standards that may exclude many products in a market and potentially many manufacturers as well. It is therefore no coincidence that a number of trade associations object to the standard, as they are constituted to uphold the interests of all their members and members’ products.”

In October, a group of trade associations and producers announced their opposition to the revised standard, saying the process Green Seal implemented to develop GS-37 fell far short of being “fair, unbiased and credible.”

The group includes the following: New York State Chemical Alliance, Alkylphenol Ethoxylates Research Council, American Chemistry Council, Carpet and Rug Institute, Consumer Specialty Products Association, Reckitt Benckiser, Inc., SI Group, Inc., The Fragrance Materials Association, The Soap and Detergent Association, and Zep, Inc.

“As organizations directly involved in the development of this standard, we are deeply disappointed by Green Seal’s process and cannot recognize GS-37 as a valid, consensus-based standard,” the group said in a statement.

They went on to say, “throughout the standard development process, our organizations consistently commented that numerous criteria in GS-37 lack sufficient scientific basis. These concerns were not adequately addressed, leading to sustained opposition when stakeholders voted on the November 2007 proposed standard.”

ISSA voted in opposition to the revised GS-37 standard based on a number of substantive issues. Nonetheless, Bill Balek, ISSA’s director of Legislative Affairs, said the cleaning industry association has adopted a neutral position in regard to the revised GS-37 standard.

“Ultimately, it is the role of the marketplace to determine whether the revised environmental standard succeeds in its goals,” he said.

Balek said ISSA voted against the revised draft of GS-37, and in its comments raised concerns, including but not limited to, the handling of asthmagens, dispensing control systems, VOC limits and concentrates.

Balek’s review of the summary of comments received by Green Seal along with the GS-37 ballots revealed that the following issues were the most contentious:

Asthmagens — A significant number of comments objected to Green Seal’s continued reliance on the Association of Occupational and Environmental Clinics (AOEC) list of asthmagens as the basis for prohibiting certain ingredients from being included in cleaning product formulations.

These comments invariably noted that reliance on the AOEC list was inappropriate because it was never intended for such a purpose. Rather the AOEC list is part of an epidemiology tool for developing a database for occupational exposures.

The AOEC does not identify known agents that cause asthma; instead it provides a reference for clinics to gather information to be compiled into an occupational database.

Respiratory Irritants — Green Seal received a number of comments objecting to the definition of respiratory irritants as overly broad, recommending instead that it adopt the definition used in the Globally Harmonized System for Hazard Communication (GHS). In addition, commenter’s took issue with the limitations placed upon allowable concentrations of d-limonene and terpene hydrocarbons, noting the lack of scientific basis for regarding these substances as respiratory irritants.

Dispensing System Concentrates — Non-governmental organizations and others continue to raise concerns over Green Seal’s proposed approach to dispensing system concentrates, which would allow such products to be tested “as used” as opposed to in concentrated form in regard to a number of health and environmental criteria.

Prohibited Ingredients — Significant objections were raised concerning Green Seal’s proposed approach to prohibiting heavy metals (as a neurotoxin), 2-butoxyethanol (as a systemic toxin), and phthalates (as an endocrine disruptor).

VOC Content — Proposed VOC content limitations were also the subject of significant comments in the voting process. One camp pointed out the inconsistencies in the calculation of VOC content between the summing approach that exempts low vapor pressure VOCs, and California Method 310, which does not allow for such exemptions. In addition, industry representatives continued to urge Green Seal to set limits consistent with the California Air Resources Board.

Chronic Inhalation Toxicity — This subject was the source of quite a bit of discussion by commenter’s, a number of which called upon Green Seal to continue to pursue an exposure modeling approach that was floated about a month before the voting closed on GS-37. Industry opposed that approach because it surfaced late in the process and is far too complex to adequately address in the short time frame necessitated by the GS-37 revision process.

Green Seals says, the process to develop GS-37 was open and transparent, as required by ISO. Any interested party was allowed to participate in the public review periods and given several opportunities to register as a stakeholder, for involvement throughout the process. Project progress and discussion were continually accessible through several electronic means (e.g., Web site, on-line forum, and e-mail).

Stakeholder discussions were also conducted through teleconferences with open participation.

Green Seal said it took measures well beyond the requirements to ensure that stakeholder input was carefully considered. This even involved the use of a professional, independent facilitator to address unresolved issues. The result was a balance of all the viewpoints of the stakeholders involved in the project, noting that there were divergent perspectives on many issues where parties were not able to find areas of agreement or compromise.

In environmental leadership standards, the accepted practice is not to use less of a potentially harmful component, but rather to use less harmful alternatives to begin with. Green Seal says one reason for revising GS-37 was to address the health concerns of children, since green cleaning products are being used increasingly in schools. But current risk assessment studies are limited and are primarily focused on adults.

The many uncertainties inherent to health risk assessment are compounded when applied to children. The differences between children and adults, critical developmental windows, and uncertainty in the risk assessment process all support taking a precautionary approach to protecting children from chemical exposures from cleaning products. Green Seal says this approach is well accepted by Federal and State agencies as well as global and international regulatory bodies.

VFA, Inc., a provider of end-to-end solutions for facilities capital planning and asset management, has recorded sales of more than $40 million in 2008, an increase of 39 percent over last year.

With the addition of 41 new customers in 2008, VFA now helps more than 400 organizations across North America and the United Kingdom to strategically manage their facility assets and maximize the value of their capital investments. Over the past year, Boston-based VFA closed several large, multi-year deals in the U.S. and Canada, including a four-year $8 million contract for a province wide assessment, and VFA facility licenses for the Ontario Ministry of Health.

VFA also continues to grow business within its existing customer base. For example, Clark County School District, a VFA facility customer since 1998,  hired VFA to conduct facility condition assessments for more than 200 schools to support the development of its 2008 capital master plan. Also, the U.S. General Services Administration, a VFA facility customer since 2000, implemented VFA auditor software across all of its 11 regions.

“The strength and depth of VFA’s solutions has carried us deeper into our target markets in 2008,” said Jerry Kokos, CEO of VFA. “Our record sales last year, in the midst of a weakening economy, reflect the growing need for organizations to maintain accurate information about critical capital assets and effectively leverage this data to conduct strategic capital planning and budgeting.”

Kokos continued: “Our growth strategy over the past few years has been to increase our expertise in each of our target markets, from both a vertical and a geographic perspective, as well as to develop our solutions to fit their evolving needs.”

Citing its “unwavering commitment” is to strengthen its businesses, Ecolab Inc., a provider of cleaning, sanitizing, food safety and infection prevention products, has announced plans to cut its global workforce by approximately 1,000 positions, or 4 percent.

The company said those whose jobs are eliminated will be offered severance and outplacement.

Ecolab expected to record a special charge in the fourth quarter of 2008 that will include a pretax charge of approximately $19 million ($18 million after tax) related to the write-down and the following:

• An acceleration of product line initiatives reducing finished goods’ SKU’s by 40 percent and optimizing formulations to reduce environmental and cost impact.

• The further optimization of the company’s supply chain including the planned reduction of plant and distribution center locations.

• The closure of two small non-strategic healthcare businesses and the write down of investments in an energy management business.

In 2009, Ecolab expects to incur a pretax restructuring Special Charge of $65 million to $75 million ($42 million to $49 million after tax) as a result of these actions.

These actions are expected to provide annualized pretax savings of approximately $70 million to $80 million ($45 million to $50 million after tax, or approximately 20 cents a share), with pretax savings of approximately $50 million (or about $0.13 per share) to be realized in 2009.

“The restructuring steps we’re taking are designed to better position the company for today’s economic conditions and the future,” said Douglas M. Baker, Jr., Ecolab’s chairman, president and CEO.

“These steps should lower our overall operating costs for both the near and long term, reposition our people and resources to best capitalize on the opportunities we see in our core Institutional and Food & Beverage businesses, and enable us to focus on driving our successful global Pest Elimination expansion, Healthcare Infection Prevention business and Water and Energy growth initiatives.

“While we are confident these steps are the right ones for Ecolab, we regret that circumstances required associates to leave the company... Our unwavering commitment is to strengthen our businesses, our leading market positions, and our opportunities for future growth. In spite of the tough decisions we’ve had to make and the tough economic environment in which we find ourselves, we believe we are now even better positioned for the future.”

Science-Based Criteria

ISO 14024 also requires that the criteria of a standard be based on sound scientific and engineering principles and be derived from data that support the claim of environmental preferability. Green Seal says, the revised GS-37 is based on peer-reviewed scientific data. For specific chemicals of concern, if there was evidence of a safer alternative, this warranted replacement of such chemicals.

As a general principle Green Seal standards reference other widely accepted standards in their criteria. In the case of carpet cleaners, there are a number of methods of testing efficacy. If there were a singular standardized method to which stakeholders referred, it would have been referenced. In the absence of an approved standard, the new GS-37 references CRI or WoolSafe methods or comparison tests as the best means for assessing if the product performs as required.

Deadline for GS-37 Re-certification Extended

Green Seal is extending the deadlines for certified products under its Environmental Standard for Industrial & Institutional Cleaners, GS-37, to be re-certified under the revised standard, GS-37 (2008).

The new deadline for submitting all re-certification applications and relevant data will be July 29, 2009, and the final deadline for having all such products re-certified will be November 29, 2009. (The original deadlines were April 29, 2009, and August 29, 2009, respectively.)

Green Seal is providing this three-month extension after receiving significant feedback from the cleaning industry that the current severe recessionary environment is causing unexpected and unprecedented pressures on businesses, large and small.

A reasonable extension in the time for products to meet the new standard will help the industry in making any necessary changes to their products while also tending to the larger issues of the recession.

Green Seal believes that the small delay in getting more products that are compliant with the revised standard into the marketplace will not cause undue difficulty to purchasers, since a number of products are already in the process of being re-certified.

Zep’s Sales Decrease 10 Percent

Zep Inc., a provider of cleaning and maintenance products, is reporting a first quarter sales decline of 10 percent and a loss of $1.5 million, which includes a previously announced charge of $1.9 million for workforce reductions. Net income reported in the first quarter of fiscal 2008 was $6.3 million, or $0.30 per share.

Results were adversely affected by lower sales volumes resulting from the global economic slowdown, higher raw materials costs, which increased $8.3 million compared to the prior year period, and costs incurred to further streamline its overhead structure.

Excluding the $1.9 million restructuring charge, the Company generated an operating profit of $1.1 million during the three months ended November 30, 2008.

“We are facing a new economic reality – a broad-based recession that is significantly impacting most of the customer segments we serve, resulting in weaker demand for our products,” said John K. Morgan, chairman, president and CEO. “Additionally, continued high raw material prices and the ongoing implementation of our strategic initiatives adversely impacted our profitability during the quarter. While we planned for a challenging first quarter, the depth and breadth of this recession is much more severe than what we had anticipated.

However, we continue to maintain a strong balance sheet and liquidity position, which together we believe provide adequate resources to operate the business and continue executing our strategic initiatives.”

The company has assets of $251 million, and liabilities of $160 million.

Grainger Reports Record Sales in ’08

Despite the “the challenging economic environment,” Grainger, a supplier of facility maintenance products and safety equipment, is reporting a sales increase of seven percent and a profit increase of $55 million in 2008.

The company said it anticipates weak sales in 2009, and reports 2008 earnings of $475 million, or $6.04 per share, on sales of $6.9 billion.

“Grainger had another record year in 2008,” said president and CEO Jim Ryan. “We were pleased with our operating performance, particularly given the challenging economic environment in the fourth quarter. Our 11.4 percent operating margin was an improvement of approximately 100 basis points over 2007.”

In November, Grainger gave annual sales guidance of -5 percent to +5 percent for 2009. “

Since then, the macroeconomic trends have deteriorated,” said Ryan. “Based on our sales run rate in January, we are somewhat below the low end of this range, so we are implementing actions now in anticipation of weak sales results. Given the great uncertainty in the economy, we are not providing 2009 annual sales and earnings guidance at this time.”

Ryan added, “We cannot accurately predict or control the economy, however, we can control how we run the business. We are focusing on our strengths of helping customers save money through a broad offering of products, fast delivery, outstanding customer service and a strong balance sheet to back it up.”

For Grainger’s 2008 fourth quarter, sales were $1.6 billion, a decrease of 1 percent versus the 2007 fourth quarter. Net earnings of $108 million increased 3 percent versus $104 million in 2007.

Operating cash flow was $195 million for the quarter and $530 million for the year. The company paid $31 million in dividends to shareholders and repurchased 1.4 million shares of stock for $104 million in the quarter.

The company has assets of $3.5 billion, and liabilities of $2 billion.

K-C Pro Sales Down 8.5 Percent

With economic weakness affecting it more than anticipated and sales of its KC Professional products down 8.5 percent, Kimberly-Clark Corp. is reporting that its fourth quarter profits have declined seven percent.

The company reports fourth quarter income of $419 million, or $1.01 per share, on sales of $4.6 billion, compared to income of $456 million, or $1.07 a share, on sales of $4.78 billion in the same period last year.

Sales of K-C Professional (KCP) & other products went down 8.5 percent from the year-ago quarter. Although net selling prices improved by approximately 5 percent, changes in foreign currency rates decreased sales by more than 7 percent, sales volumes dropped more than 5 percent and product mix was off about 1 percent.

Economic weakness and rising unemployment levels in North America and Europe began to affect KCP’s categories in the fourth quarter. In North America, sales went down approximately 3 percent. Sales volumes declined more than 8 percent and currency effects were negative by more than 1 percent, partially offset by an improvement in net selling prices of nearly 7 percent.

“During the fourth quarter, economic weakness impacted our categories more than anticipated, particularly in North America and Europe,” said Chairman and CEO Thomas J. Falk. “We believe some of the effects are temporary, reflecting customer warehouse and consumer pantry inventory reductions; however, consumer tradedown also affected our sales in several categories.”

In Europe, KCP’s sales fell 15 percent in the fourth quarter, driven by lower sales volumes and unfavorable product mix of 7 percent and about 1 percent, respectively, and a decrease in currency rates averaging 11 percent. These factors were partially offset by a 4 percent benefit from price increases implemented earlier in the year.

Sales of health care products increased 0.6 percent in the fourth quarter. Overall, sales volumes outside North America grew at a high-single digit rate.

For the year of 2008, sales of $19.4 billion were up 6.3 percent from $18.3 billion in the prior year. But the benefits of top-line growth, along with cost savings of $171 million, were more than offset by inflation in key cost components totaling more than $725 million, an increase in strategic marketing spending of about $95 million and higher levels of selling and administrative expenses, mainly to support growth in developing and emerging markets.

Falk said, “The collapse of global financial markets has precipitated significant changes in commodity costs and currency rates and resulted in a high level of volatility and uncertainty in the current business environment.”

The company has assets of $18 billion, and liabilities of $14 billion.

Zep’s Sales Decrease 10 Percent

Zep Inc., a provider of cleaning and maintenance products, is reporting a first quarter sales decline of 10 percent and a loss of $1.5 million, which includes a previously announced charge of $1.9 million for workforce reductions.

Net income reported in the first quarter of fiscal 2008 was $6.3 million, or $0.30 per share.

Results were adversely affected by lower sales volumes resulting from the global economic slowdown, higher raw materials costs, which increased $8.3 million compared to the prior year period, and costs incurred to further streamline its overhead structure.

Excluding the $1.9 million restructuring charge, the Company generated an operating profit of $1.1 million during the three months ended November 30, 2008.

“We are facing a new economic reality – a broad-based recession that is significantly impacting most of the customer segments we serve, resulting in weaker demand for our products,” said John K. Morgan, chairman, president and CEO. “Additionally, continued high raw material prices and the ongoing implementation of our strategic initiatives adversely impacted our profitability during the quarter. While we planned for a challenging first quarter, the depth and breadth of this recession is much more severe than what we had anticipated. However, we continue to maintain a strong balance sheet and liquidity position, which together we believe provide adequate resources to operate the business and continue executing our strategic initiatives.”