2013Washington-keyissues.pdf

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1 CEO Roundtable Executive Summary of Key Issues (revision dated May 14, 2013)

CEO RoundtableJune 2, 2013 | Washington, DC

Executive Summary

Key Issues Affecting the Toy Industry

CHEMICAL RESTRICTIONS

Background/Impact New hazard-based (rather than risk-based) programs to regulate toxic substances in toys and childrens products continue to be

introduced. These programs are often redundant and differ enough to result in complex and costly compliance and testing; they

could also lead to a ban on materials that have long been used safely in toys.

Objectives Prevent the introduction of new and/or mitigate the impact of hazard-based legislation and regulation.

Strategies Work to remove materials/chemicals important to the toy industry from existing concern lists; prevent more substances from being

added to existing lists. Align international, national and state chemical requirements.

Tactics and Tools Advocacy. Coalitions. Compliance education resources for companies. Data to contradict the allegations made by hazard-based

proponents. Enhanced monitoring (and information sharing) regarding emerging threats. Positive messaging campaigns (e.g., toy

industrys commitment to safety) for stakeholders.

Suggested CEO Action Invest in the development of improved methods of identifying and selecting safer chemicals/materials. Approve company

participation in advocacy and alignment efforts. As appropriate, authorize the sharing of company data to support message

development across jurisdictions. Promote industry-wide compliance with all requirements.

ENVIRONMENTAL IMPACT (EPR and Labeling)

Background/Impact Legislation requiring manufacturers to establish take back processes for their products or packages is being proposed and/or

implemented in multiple jurisdictions. In the EU, there is also an emerging trend to provide a comparison method (e.g., labeling

scheme) for the environmental footprint of consumer products. Both programs could be costly and will likely provide no significant

environmental benefit. Increasingly, toys are being specifically included in the scopes of these programs.

Objectives Prevent the introduction of new and/or mitigate the impact of EPR legislation and environmental labeling schemes.

Strategies Work to remove toys from existing EPR or labeling requirements; prevent toys from being added to new requirements. Align

international, national and state environmental requirements. Develop compliance assurance programs.

Tactics and Tools Advocacy. Coalitions. Compliance education resources for companies. Data to contradict allegations of perceived benefit.

Enhanced monitoring (and information sharing) regarding emerging threats. Positive messaging campaigns (e.g., toy industry

efforts to protect the environment) for stakeholders.

Suggested CEO Action Approve company participation in advocacy and alignment efforts. As appropriate, authorize the sharing of company data to

support message development across jurisdictions. Promote industry-wide compliance with all requirements.


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2 CEO Roundtable Executive Summary of Key Issues (revision dated May 14, 2013)

MARKETING TO CHILDREN (M2C)

Background/Impact Marketing to children remains a very sensitive issue. Politicians and consumer advocates are demanding better protection,

especially in digital media and where, some argue, children may be less able to distinguish between content and advertising.

Stricter rules on advertising, data protection and online privacy particularly in relation to children under the age of 13 are

being proposed. Costs and process impacts from new obligations would affect all child-directed websites, online gaming (dubbed

by some as advergaming) and mobile apps, as well as overarching privacy policies, information collection practices, etc. Severe

penalties for non-compliance could be levied.

Objectives Protect companies ability to engage in responsible advertising and prevent the introduction of new and/or mitigate the impact of

M2C legislation and regulations.

Strategies Proactively support self-regulation and safe harbor programs (where they exist). Enhance and promote self-regulatory practices by

ensuring that they keep pace with emerging technologies.

Tactics and Tools Advocacy in support of self-regulation programs. Coalitions. Compliance education resources for companies. Enhanced monitoring

(and information sharing) regarding emerging threats. Positive messaging campaigns (e.g., toy industrys commitment to keeping

children safe regardless of where they play) for stakeholders.

Suggested CEO Action Champion reliance on credible self-regulation and industry best practices. Promote industry-wide compliance with all existing laws,

responsible advertising guidelines, media education and self-regulation programs, including protecting the privacy and online safety

of children. Approve corporate participation in advocacy and alignment efforts. As appropriate, authorize the sharing of company

data to support message development across jurisdictions.


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Issue Brief on Chemical Restrictions | Last Update: May 14, 2013


ISSUE BRIEF

Chemical Restrictions

ISSUE BRIEF: Chemical Restrictions

Background/Impact Non-governmental organizations (NGOs) worldwide are making strong, increasingly

coordinated pleas for new regulation of allegedly toxic chemicals that are reported tonegatively impact human health and the environment. These initiatives have been

structured to fundamentally remake the way chemicals and products are both designed

and used, and to move to a precautionary-based approach to chemicals management.

Some have sought to ban specific chemicals (e.g., Bisphenol-A (BPA), cadmium, flame

retardants, lead, phthalates, polycyclic aromatic hydrocarbon (PAHs), etc.) while others

seek reform of how ALL chemicals and products are regulated for health and environmental

impact (e.g., green chemistry, precautionary principle, safer alternatives, general

bans of chemicals considered to be or labeled as carcinogenic, mutagenic or toxic for

reproduction (CMR) endocrine disrupters, etc.). The proposals often include requirements

for ingredient disclosure and public notice of chemicals of concern contained in products,

as well as mandates to conduct alternatives assessments.

Efforts by governments to regulate substances in childrens products are often considered

to be politically motivated and may be precautionary (without regard to sound science and

risk). These requirements can result in costly, complex compliance procedures and

additional testing, though they often do not significantly enhance safety.

Individual country chemical restriction proposals are being monitored in Asia, Europe,

Latin America and North America. In Europe, chemical regulations have been implemented

under the European Unions REACH regulation, the RoHS directive for electrical equipment,

the Cosmetics Regulation and the EU Toy Safety Directive. In the U.S., federal chemical

regulation policy debates focus on reform of the statute regulating chemicals in commerce,

Toxic Substances Control Act (TSCA). More than 20 additional states are consideringproposals ranging from individual chemical substance bans to broader disclosure and

phase out/alternative assessment requirements. While some of these bills would affect

all consumer goods, many focus on childrens products. Four (4) states have already passed

such laws; disclosure in Washington State began in August 2012 for the largest companies.

Objectives Prevent the introduction of new and mitigate the impact of existing hazard-based

legislation and regulations.

Strategies Work to remove materials/chemicals important to the toy industry from existing

concern lists; work to prevent more substances from being added to existing lists.

Work to align international, national, and state chemical regulations for childrensproducts.

Tactics and Tools (As needed) Commission research to contradict allegations in hazard-basedrequirements and/or evaluate the risk of chemicals under scrutiny.

Develop or enhance programs to facilitate industry-wide compliance with existingrequirements.


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Issue Brief on Chemical Restrictions | Last Update: May 14, 2013

Tactics and Tools

(continued) Enhance capabilities to identify emerging threats and share information (advocacy

messages, best practices, data, etc.) among industry stakeholders worldwide.

Secure third-party experts to assist in delivering key toy industry messages. Leverage participation in (or leadership of) cross-industry coalitions. Engage networks of: scientists, toxicologists, etc.; chemical and components suppliers;

and others in supporting science-based chemical policies.

Develop positive messaging to educate NGOs, consumer advocates, policymakers andother stakeholders about the value of play, existing toy safety requirements,

and the industrys long-standing commitment to keeping children safe from harm.

Quantify costs and resources associated with compliance with chemical regulatoryprograms and the impact these costs have on toy businesses, particularly SMEs.

Suggested CEO

Action

Invest in the development of improved methods of identifying and selecting saferchemicals/ materials.

Approve corporate participation in advocacy and alignment efforts. Authorize the appropriate sharing of company data to support message development

and sharing across jurisdictions. Promote industry-wide compliance with all requirements. Encourage coordinated activity by national associations to promote and protect risk-

based chemicals management policy.

KEY MESSAGES

Sound science-based chemical policies:

ensure a risk-based approach when prioritizing chemicals for review;

rely on authoritative, credible data that demonstrates actual harm; balance precautionary and proportionality principles; consider existing chemical safety requirements; evaluate practical approaches to information and data development; create workable programs that ensure chemicals are safe for their intended uses; avoid unnecessary burdens, especially for SMEs; and allow companies to remain innovative and globally competitive as they develop and use safe chemicals and

materials.


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Issue Brief on Environmental Impact | Last Update: May 14, 2013


ISSUE BRIEF

Environmental Impact (EPR and Labeling)

ISSUE BRIEF: Environmental Impact

Background/Impact Environmental and waste management issues continue to surface globally in legislative,

regulatory and commercial arenas, including among retailers. Although toys and otherchildrens products typically make up only a fraction of the total household waste stream,

they are often the focus for attention due to the widespread view that toys are overly

packaged, low utility products that provide good publicity value for lawmakers.

Extended Producer Responsibility (EPR)

A number of jurisdictions have implemented (or are considering implementing) EPR

requirements whereby manufacturers must either take back certain products or

packages at the end of their useful life or subscribe to a collective arrangement to do so.

Such mandates appeal to local governments as a way to shift solid waste collection costs

elsewhere and to recyclers as a way of increasing revenue and/or the amount of material

available for recycling. In practice, the incremental benefit is often minimal. Industry

has argued that any such EPR scheme must apportion costs fairly to all participants in

the supply chain (manufacturers, importers, retailers, consumers) and that a legitimate

environmental goal must be achieved rather than simply shifting disposal costs from

municipalities to manufacturers.

In Europe, EPR compliance schemes are active in 33 European countries (EU member

states plus EFTA and EU candidate countries); 26 of these recognize the Green Dot

collection process for packaging materials. In North America, the Canadian Province of

British Columbia included a specific reference to electronic toys in its legislation;

mandated collection began July 1, 2012. Also, the Province of Ontario requires a fee on

battery-operated toys whether or not the toys include batteries when sold; the Province

of Quebec is now considering a similar proposal. In the U.S., there is currently no federalEPR requirement but dozens of states are considering product take back legislation.

Labeling

The toy industry is most affected by requirements being introduced in the European Union

(specifically France) that call for manufacturers to carry out costly and complex analyses

to evaluate and document the environmental impact of toys at every single stage of a

products life. Although these initiatives are aimed at better informing the consumer, the

comparative data and resulting information about the environmental footprint of products

is expected to be too complex for the consumer and could be misleading.

Objectives Prevent the introduction of new and mitigate the impact of existing EPR legislation and

environmental labeling schemes.

Strategies Work to remove toys from existing EPR or labeling requirements; work to prevent toys

from being added to new requirements.

Work to align international, national and state environmental requirements. Develop compliance assurance programs.


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Issue Brief on Environmental Impact | Last Update: May 14, 2013

Tactics and Tools Commission research to contradict allegations of end-of-life concerns for toys and to

quantify the costs and resources associated with EPR and labeling mandates for toy

businesses, particularly SMEs.

Develop or enhance programs to facilitate industry-wide compliance with existingrequirements.

Promote industry innovation in environmentally-friendly design, manufacturing andend-of-life practices.

Enhance capabilities to identify emerging threats and share information (advocacymessages, best practices, data, etc.) among industry stakeholders worldwide.

Secure third-party experts to assist in delivering key toy industry messages. Leverage participation in (or leadership of) cross-industry coalitions and like-minded

partners to broaden impact of advocacy efforts and development of best practices for

compliance (e.g., The Product Management Alliance regarding U.S. state mandates,

and the electronics industry regarding e-waste programs).

Engage networks of scientists, toxicologists, environmental experts, and othersregarding industry product stewardship best practices.

Develop positive messaging to educate NGOs, consumer advocates, policymakers andother stakeholders about the toy industrys product stewardship practices, the minimalimpact of toys in the total household waste stream, and the value of play.

Suggested

CEO Action Promote industry-wide compliance with all environmental impact requirements. Approve company participation in advocacy and alignment efforts. Authorize the appropriate sharing of company data to support message development

and sharing across jurisdictions.

Encourage coordinated activity by national associations to promote and protect risk-based chemicals management policy.


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Issue Brief on Marketing to Children | Last Update: May 14, 2013


ISSUE BRIEF

Marketing to Children

ISSUE BRIEF: Marketing to Children

Background/Impact Issues related to responsible marketing and advertising to children have become key

areas of discussion among policymakers in a number of countries. Considerations are

being given to a wide range of issues: advertising restriction, commercialization of

childhood, gender stereotyping, obesity (relationship between the toy and food industries),

and online privacy/data protection. The general appropriateness of targeting someone

who, some argue, may be less able to distinguish or understand marketing also continues

as a recurring discussion point.

An increasing number of regulatory and self-regulatory bodies (including the International

Chamber of Commerce and the Childrens Advertising Review Unit in the U.S.) are now

focused on protecting the privacy of children primarily those under the age of 13 when

they are online. Privacy policies, child-directed apps, and consumer data protection (e.g.,

Do Not Track and other Online Behavioral Advertising (OBA) issues) are priority topics.

With respect to data protection, most activity is taking place within the United States and

the European Union; some additional consideration is being given to the topic within the

Asia-Pacific Region. In the U.S., the Federal Trade Commission recently revised guidelines

for compliance with the Childrens Online Privacy Protection Act (COPPA); non-compliance

is expected to result in severe penalties.

U.S. and EU policymakers, for example, are also considering changes in how companies

can interact with children on their corporate websites and mobile apps. Additionally, the

use of a brand (e.g., character or other recognizable mark) in an online or mobile game

that is in close proximity to an ad or other requested consumer purchase decision is

being dubbed by some as advergaming and therefore subject to additional criticisms

potentially leading to new rules and difficult-to-achieve requirements for parental consent.

The International Chamber of Commerces Commission on Marketing and Advertising is

currently considering a possible revision to the United Nations Guidelines on Consumer

Protection and possible activity by the World Wide Web Consortiums (W3C) Do Not

Track Working Group. These and other global efforts to further regulate childrens online

activity could have a pervasive impact on allyouth-directed marketing and advertising,

and could make it increasingly difficult to develop relationships with the key target

audience youth under the age of 13.

Objectives Protect companies ability to engage in responsible advertising and prevent the

introduction of new and/or mitigate the impact of M2C legislation and regulations.

Strategies Proactively support self-regulation and related safe harbor programs (where theyexist) for child-directed communications.

Enhance and promote self-regulatory practices by ensuring that they keep pace withemerging technologies.


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Issue Brief on Marketing to Children | Last Update: May 14, 2013

Tactics and Tools (In close cooperation with self-regulatory bodies) Proactive advocacy to policymakersand other stakeholders about the toy industrys commitment to responsible advertising

and marketing practices, and the effectiveness of current self-regulatory guidelines and

safe harbor programs.

o As appropriate, engage other industries (e.g., food, entertainment) and third-partyspokespersons for message development and delivery.

Bolster industry education programs to ensure industry-wide awareness and help toycompanies, retailers and brand owners better understand how to comply with existing

laws and self-regulatory requirements.

Enhance capabilities to identify emerging threats and share information (advocacymessages, best practices, data, etc.) among industry stakeholders worldwide.

Leverage participation in (or leadership of) cross-industry coalitions and like-mindedpartners to broaden the impact of advocacy efforts:

o World Federation of Advertisers (WFA) Responsible Advertising and ChildrenProgramme (RAC)

o EU European Advertising Standards Association (EASA)o Asia-Pacific Economic Cooperation (APEC) Committee on Trade and Investment

(CTI)

o National self-regulatory bodies and advertisers associations Develop positive messaging campaigns to educate NGOs, consumer advocates,

policymakers and other stakeholders about the industrys commitment to responsible

communications to children, programs such as Media Smart that teach children

to think critically about advertising in the context of their daily lives, toy industry

philanthropy, and the value of play.

Suggested

CEO Action

Champion reliance on credible self-regulation and industry best practices.

Promote industry-wide compliance including third-party agencies and vendorssupporting toy businesses with all existing laws, responsible advertising guidelines,

media education and self-regulation programs, especially those that protect the

privacy and online safety of children under 13.

Approve company participation in advocacy and alignment efforts. Authorize the appropriate sharing of company data to support the continual alignment

of self-regulatory guidelines with emerging technologies, as well as advocacy message

development and sharing across jurisdictions.

Encourage coordinated activity by national associations to assure well-informedarguments and decisions.

2013Washington-keyissues.pdf

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