Environmental and Health Risks Associated with Chemicals in Company Products

Resolution Text

Align Technology’s (“Align” or “the Company”) Invisalign® clear plastic aligners, used by approximately 16,000,000 people, account for over 80% of 2022 revenue.[1] Align states its aligners and retainers “are made of medical-grade, high molecular weight, thermoplastic polymers” selected “based on their properties and safety classification, and have a long history of FDA approvals for long-term use inside the human body.”[2]

FDA approval is necessary but not always sufficient to eliminate material financial risks. For example, while Johnson & Johnson touted that the “FDA agreed overall with the position that we had taken with the safety of our talc”[3] it later settled litigation for “$8.9 billion…to resolve… current and future talc claims…”[4]

Further, regulatory and consumer expectations are increasing in the U.S. and internationally.[5] Currently, 38 states have adopted 333 state policies to protect people from harmful chemicals.[6] The Retail Compliance Center finds, “A growing segment of consumers are demanding that suppliers move beyond compliance and ensure that chemicals in products are not just compliant with existing requirements but are ‘free’ of chemicals of concern.”[7]

Disclosure consistent with voluntary industry standards is necessary to assess whether Align is futureproofing its operations by anticipating potential chemicals-related risks.  

Illustrating growing interest in voluntarily and proactively exceeding regulatory expectations, in October 2022, “Clean Production Action unveiled the first GreenScreen Certified™ Standard for Medical Supplies & Devices, laying out detailed criteria [participating] equipment manufacturers must meet to prove that their products do not contain chemicals with known negative impacts to human health and the environment.”[8]

Additionally, the International Sustainability Standards Board (“ISSB”) identifies industry-specific, financially material, decision-useful metrics. For Align’s industry they include: “process to assess and manage environmental and human health considerations associated with chemicals in products, and meet demand for sustainable products.”[9] Further, it encourages disclosure on “specific environmental and human health impacts of its products, including:…[t]oxicity of materials”  and includes reference to: “design protocols”, “[p]rocurement policies”,“[r]estricted substances lists”,“[c]ertifications”, and “[p]roduct take-back” policies.[10]

RESOLVED:  Shareholders request the Board of Directors issue a public report drawing upon the ISSB’s Medical Equipment Sustainability Accounting Standard—at reasonable expense, excluding confidential and privileged information and within a reasonable timeframe—discussing Company processes and policies to manage potential environmental and human health risks associated with chemicals in Align’s products, as well as related risks to Company operations and finances such as reputation and liability. 

SUPPORTING STATEMENT:

The proponent recommends that the report, at board and management discretion, also include a timeline for developing and disclosing a comprehensive chemicals policy that:

identifies chemicals of high concern and establishes a process for their elimination; and
deploys safer alternatives when available.

[1] https://www.invisalign.com/frequently-asked-questions; https://investor.aligntech.com/static-files/da529fe4-23bd-4d19-a56e-43aed753800a

[2] https://www.invisalign.com/frequently-asked-questions

[3] https://www.reuters.com/investigates/special-report/usa-health-fda-talc/

[4] https://www.jnj.com/ltl-update

[5]  https://www.pillsburylaw.com/en/news-and-insights/regulate-plastic-pollution-increase-2023.html

[6] https://saferstates.org/

[7]  https://rilastagemedia.blob.core.windows.net/rila-web/rila.web/media/media/pdfs/fact-sheet-state-regulations-chemicals-in-consumer-products_1.pdf?ext=.pdf

[8]  https://www.cleanproduction.org/resources/entry/greenscreen-certified-standard-for-the-health-care-sector

[9] https://sasb.org/standards/download/?lang=en-us ISSB, Medical Equipment & Supplies Sustainability Accounting Standard V2023-06 p.6, 

[10] Ibid, p.16, 17