Social media is influencing the chemical industry to move beyond compliance. The potential for brand damage and lower sales caused by negative campaigns is driving companies to change their products based on consumer demands.

Dr. Ruud Overbeek works for Intertek Group plc, a global leader in product safety, quality, health, environmental, and sustainability standards. He is responsible for Global Health, Environmental, and Regulatory services (HERS) within the Life Sciences, Chemicals & Pharmaceuticals Global Business Line. In this role, he helps companies meet the requirements of ever-changing global legislation in the areas of Green and Health claims, Chemical Safety and Global Notifications, Restricted Substances and Substances of Concern, REACH, and climate change-related services. Dr. Overbeek is a member of the Royal Dutch Chemical Society, the Dutch Catalysis Society and is appointed to the Health and Beauty America (HBA) Scientific Advisory Board.

With such an extensive background in chemicals management, what changes have you noticed in product safety and compliance over the last 5 years?

Many years ago, compliance was more about the physical safety and quality of products used in everyday life. Today, companies manufacturing and selling these products also need to pay attention to emerging product and safety regulations associated with the chemicals found in these products. Companies need to be aware that information about chemicals is widely available to the public and must be prepared to address their concerns.

Consumers, NGOs, and government agencies are paying attention to how a product is manufactured and sold and to the materials and the chemicals used in the product or during its manufacturing. This goes beyond product functionality. People are concerned with human health and the environment.

In addition, social media has taken on a role in compliance that goes beyond the regulations. There is a “court of public opinion” held on the internet through customers, end users, and NGOs, all sharing information through forums, blogs, and social media tools. As people become more concerned, topics become viral.

Regulations are powerful tools used by agencies to monitor and control how products are designed and manufactured. Can social media possess more power than product regulations?

Companies have to meet regulatory compliance for products they introduce to the market. They have processes and procedures for meeting requirements, for example FDA approval or Notification regulations. The compliance procedures and approvals follow specific guidelines and standard business requirements. The regulatory pressure happens when there are new regulations being introduced. Companies then need to build new programs in a controlled manner to meet the requirements.

When we talk about pressures from customers, the consumer market, or even politics, it is often a reactionary based decision as it has much faster emergence. Stories develop quickly on the internet and through media. It’s tough to prepare for what may be said about a company’s products and even tougher to manage the pressure to make a change.

It doesn’t matter if the chemical in question has been approved for use by government agencies. If the social media message goes viral, companies can suffer brand damage, boycotts, and loss of sales almost immediately.

Can you share a recent high-level example where a social media campaign affected a company’s brand, profits, or customer satisfaction?

Yes, this past year, there was quite a stir caused by a blogger who found out that there was an additive used in bread by a certain popular food chain, which is also used in the manufacturing of yoga mats and tires.

It went viral. People were shocked that this chemical could be used in a food product, even though that additive meets all health and safety requirements, as well as exposure limits.

However, the shock people expressed is not based in scientific fact. It’s based in perception. That particular additive has all forms of government approval and limits established for that particular use.

If people associate a certain chemical with something negative, then perception could force the manufacturers to substitute the chemical in order to continue selling the product. That is not always good science.

Chemicals are an important part of life and when used properly can add value to our lives. Anything excessing limits of safe exposure can be harmful, even water. Water is the essence of life and even that can kill a person when tolerances and limits are exceeded.

With so many systems, agencies, treaties, and compliance rules globally, do regulators have time to monitor and take action on social media campaigns?

Regulators have to assess chemicals in products for safety and approve them. They have a list of accepted risk criteria that each decision is based upon. There are a series of tests, structured analysis, and documentation to complete before approvals.

This differs from what people are doing on social media. When something goes viral, most often it is based upon subjective criteria without deep science behind it.

What does something like “less safe” mean? When someone uses that term “less safe” on social media, most often they are not toxicologists. They are not trained regulators and they have not done the necessary scientific calculations for exposure limits and tolerances.

Most conclusions on social media are based on limited knowledge and more of a gut feel. “I think this is bad, so it must be bad” or worse “I heard this is bad, so it is bad.”

Social media campaigns influence regulators to go back and assess the chemical for potential risks again. This requires companies to start over and to begin the search for alternatives to the chemical in question. Sometimes, there is no viable alternative.

Can you think of a recent issue where there was no regulation in place and social media brought to light a problem that affected companies over night?

The most obvious case is the discussion on micro-beads in cosmetics.

When introduced to the market, there were no regulatory issues concerning micro-beads. Consumers appeared to love the benefits of micro-beads added to their favorite products.
It has been determined by the NGOs that micro-beads may have a negative ecological impact on fish and the environment. In light of this information, NGOs have raised this issue with the global community. Social media has broadcast the issue far and wide and now regulators, government, and industry organizations are investigating the impacts in more depth.

Many companies are being asked their position on the issue. In the absence of specific regulation, it has caught many by surprise. Companies that did not have prepared statements or were unaware, looked bad and suffered brand damage in comparison to those who were prepared.

Are there ways in which companies can prepare for emerging chemical regulations and social media trends that will affect their products?

In general, the public’s concerns surrounding chemicals are the result of really fast developing news and often coincide with issues that are important to people, like health and the environment.

As a company, you need to protect your brand. Start by understanding what is important to the end customer. Leverage software tools that keep the company up to date with emerging global product regulations. Use predictive modelling tools, like Horizon Scanning tools, for social media to make an educated guess about what the next issue might be and engage with industry, government, and NGO organizations to stay up to date on what might be trending.

It’s also important to understand how social media campaigns can affect product development and manufacturing as well. Changing product composition is not easy. It requires an investment in scientific study and analysis of the substitutions. Traditional business metrics need to be evaluated for the cost and impact of changing product formulations.

Companies need to remember that social media driven pressures can also become political campaign agendas. Perceived voter pressure drives government attention.

What is next for the chemical industry and what can we look forward to in the future?

We need to look back into the past in order to move forward in the present.

In the past, products were made for performance and physical safety. It was more about function. Products just needed to work in a safe way.

Today, companies need to take compliance to the next level. They need to consider the chemical composition of products, and the impact to health and the environment, during the design phase and throughout the life-cycle. They need to incorporate chemical composition into sustainability and social responsibility strategies and planning.

Planning for compliance is imperative and having tools in place to predict and monitor consumer concerns through social media makes good business sense.

Chemicals are a concern to everyone. Chemicals are associated with every aspect of our lives. It’s the world in which we live. Regulation, speculation, or opinion, we need to take it seriously.

Bio:

Kelly Eisenhardt is Co-Founder and Managing Director at BlueCircle Advisors, an environmental compliance and sustainability consulting and training firm based in Massachusetts (www.bluecircleadvisors.com.)  In her role at BlueCircle Advisors, she is responsible for providing business intelligence, strategy and implementation of environmental, social and governance (ESG) risk programs.  Her experience aligns well with her client’s needs for technology, compliance, and sustainability expertise by helping companies create and manage their corporate environmental and social responsibility programs.

To contact Kelly Eisenhardt, send emails to kelly.eisenhardt@bluecircleadvisors.com or follow her on Twitter @KelEisenhardt.  For more information about BlueCircle Advisors and the company’s products and services, please visit www.bluecircleadvisors.com, on Facebook at BlueCircle Advisors, on Twitter @OurBlueCircle, and on the LinkedIn group at the BlueCircle Advisors group.