Managing Substances of Concern Through Full Material Disclosure (FMD)
Full Material Disclosure (FMD) is the next step in achieving true transparency – having comprehensive data available on products and the chemicals and substances they contain. According to the Taskforce on Nature-related Financial Disclosures (TNFD), a total of 416 organizations have committed to disclosing their material nature-related issues to investors and other stakeholders based on the TNFD recommendations, signaling more widespread adoption of full material disclosures.
But why is FMD important?
Consider the landscape for chemical compliance and the complexity of regulations and reporting to reveal the value of Full Material Disclosure.
What Are Substances of Concern (SOC) in Regulatory Compliance?
Substances of Concern (SOC) are chemicals and materials that are believed to have negative impacts on human health and/or the environment. SOCs may be carcinogenic, mutagenic, toxic, or result in reproductive harm or bioaccumulation. With tens of thousands of chemicals being used in modern manufacturing today, it’s impossible to evaluate every substance for toxicity. When regulatory agencies understand that a substance could be harmful, it is added to the “substances of concern” list, which often means that production, use and disposal of these substances is subject to control and rules. Some examples of widely known substances of concern are asbestos, formaldehyde and benzene.
Considering the multiple SKUs and complex products that contain components from suppliers around the world, understanding which SOCs may be in your products can seem like an overwhelming task. Government regulatory bodies and NGOs alike are continually adding to their lists of “Chemicals of Concerns” and “Chemicals of Very High Concern” and requiring that companies identify, report on, and label the SoCs in their products. Failure to comply can result in fines and can halt the sale of a product in a particular region. SoC lists differ by region, by industry, and by regulatory body making it difficult for companies to understand which substances must be reported on. FMD overcomes that challenge by reporting on all substances.
Hear 3E’s experts discuss Substances of Concern in our recent webinar: Substances of Concern Across Sustainability Frameworks
About Full Material Disclosure
Full Material Disclosure is becoming a key component of supply chain visibility, compliance, effective sustainability reporting, and true product stewardship.
FMDs include detailed information about the complete chemical composition of a product, including contents and concentration amounts. As regulations grow in number and complexity, FMDs provide a source of complete information needed to respond to inquiries without having to open ad hoc research projects every time a new product is sold in a new region or a new substance of concern is added to a list. As the breadth and depth of required chemical information increase, Full Material Disclosures become a necessity and a competitive advantage.
Did you know?
By serving as a resource for comprehensive information about a product’s contents, FMDs offer a foundation for complete and accurate reporting required to comply with different regional chemical compliance standards around the world. FMD can help you comply with the following standards:
How do FMD differ from SDS?
Safety Data Sheets (SDS) are primarily concerned with specific chemical hazards, exposure risks to humans, and safety and care instructions in case of a spill or exposure. Typically, SDS only provide information about specific substances of concern that are contained above a given threshold.
A Full Material Disclosure provides a comprehensive list of all materials used in a product, including their concentrations, CAS number, and indications when substances exceed compliance thresholds. In brief, FMD provides a much more detailed view of a product’s composition.
| SDS | FMD | |
| Purpose | List substances of concern contained in a product | List all materials found in the product |
| Information included | List only chemicals that appear in amounts above a given threshold | Provide each substance’s CAS number and concentration |
| Practical usage | Provide instructions on what to do in case of spill or exposure | Serve as a resource for complete information on a product useful to responding to product inquiries, environmental reporting and chemical compliance |
Challenges of Achieving Full Material Disclosure
Achieving FMD presents a challenge to companies given the extensive and detailed information required. With so many chemicals and mixtures comprising products today, and the list of substances of concern evolving with each passing week, it can be difficult to maintain up-to-date lists of chemicals, thresholds and concentrations.
The task of soliciting complete and meaningful data from suppliers across the supply chain can also be difficult and time consuming. Many times, inquiries are met with confusion, lack of response, or partial response, leaving companies with insufficient information.
Data collected from disparate sources may also be received in multiple different formats, making the task of consolidating information into an FMD extremely burdensome.
In other cases, component composition may be proprietary, creating data-sharing restrictions that make it difficult for suppliers to share specific information. Leveraging chemical compliance software with adjustable data sharing permissions can keep proprietary data secure while streamlining responses to compliance and consumer inquiries.
The Benefits of Full Material Disclosure for Regulatory Needs
The effort to develop FMD is an investment that pays off in multiple ways.
- Achieve greater visibility– Maintaining a library of FMD positions companies to understand and report on the chemical composition of their products in case of a new product launch, compliance inquiry, customer complaint or other situation. FMD also provide greater supplier transparency and help mitigate risk by understanding the source of SOCs.
- Ability to support ESG reporting – FMD provides valuable data for ESG reporting, which is growing in prominence across industries. With information about contents and bioaccumulation, companies can deliver data that monitors their progress toward sustainability objectives.
- Mitigate risk – FMDs can easily flag substances of concerns that are present above allowable thresholds, positioning them to identify substitutes or plan phase-outs and/or warning labels to customers.
- Determine product marketability – Access comprehensive information on a product’s chemical content to assess marketability in global regions with different SOC lists and thresholds.
- Expedite audits – FMDs make generating compliance reports, responding to customer inquiries, and updating content information a snap, saving time and freeing resources for more strategic endeavors.
- Enhanced brand trust – With confident product compliance and chemical data, companies can promote and sell their brands with confidence, increasing brand trust.
Did You Know?
Integrating Full Material Disclosure into your workflows supports compliance with ROHS (Restriction of Hazardous Substances), REACH Regulation, and other global standards. Additionally, FMD ensures alignment with the Hazard Communication Standard, improves access to chemical data reporting, and maintains up-to-date records for the restricted substance list.
Strengthen Compliance & Sustainability Reporting with Comprehensive FMD
As regulatory demands continue to accelerate in quantity and rigor, Full Material Disclosure provides a foundation for companies to build a repository of information that can be tapped for the purposes of sustainability report, regulatory compliance, market readiness assessments, chemical hazard requests, risk assessments or customer inquiries.
FMDs empower companies to proactively meet the evolving demands of the regulatory landscape by offering complete information about the chemical content of their products. This investment yields obvious benefits like cost and time savings and also delivers competitive advantage and more informed decision making.
3E Solutions for Full Material Disclosure Creation
Explore critical capabilities and solutions that empower you to develop a full stable of FMD. 3E Exchange, designed to streamline data collection from suppliers and equipped with3E’s news service which delivers the latest regulatory updates from around the world into a solution that allows you to automate FMD creation and updates. 3E offers solutions that allow you to manage chemical compliance across your organization. Our solutions can help you fill the gaps of your current system or construct a new foundation for streamlined chemical compliance. Schedule a consultation today.
