Shareholder Resolutions

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Company: Best Buy
Subject: PVC, Other Toxic Chemicals In Products
Year: 2008
Sector: Electronics Retail/Manufacture
Lead Filer: Adrian Dominican Sisters
Outcome: Withdrawn; company provided requested information

Toxic chemicals in electronics supply chains have been a prominent concern in recent years, as stories in the media have highlighted hazards to human health and the environment from the production, use, and disposal of electronics products.

Public policies in the United States and overseas have begun to address these issues. For example, the European Union has adopted the Reduction of Hazardous Substances (RoHS) Directive limiting the use of specific chemicals such as lead and certain brominated flame retardants in electronics products.

Private sector companies have also responded. For example, Wal-Mart is developing a scorecard for assessing the sustainability of its suppliers’ electronics products that includes the use of innovative materials that reduce the amount of hazardous substances in products. Wal-Mart also has established a goal that all televisions and computers it sells will comply with the RoHS directive by the end of 2007.

Best Buy sells products from various manufacturers, and also sells products under its private label brands, including Insignia, Init, and Dynex. In addition, Best Buy owns and operates stores in China, which has adopted rules on chemicals in electronics products patterned on the EU’s RoHS Directive.

Various retailers and manufacturers have adopted policies and practices on the toxicity of the chemicals in their electronics products, including lists of chemicals to be avoided or labeled in products, targeted future deadlines for action, and public reporting on progress. PVC in products and packaging has been targeted for reduction and elimination out of concern about its health and environmental impacts throughout the supply chain. Manufacturers establishing publicly-disclosed policies on PVC use include Apple, Dell, Hewlett Packard, Microsoft, Nokia, Samsung, Sharp, and Sony. Retailers doing so include Wal-Mart, Target, Sears, and Kmart.

Resolved: Shareholders request that the Board publish a report to shareholders on Best Buy’s policies on product toxicity, at reasonable expense and omitting proprietary information, by December 2008. This report should summarize which, if any, product lines or categories sold in Best Buy stores may be affected by the product toxicity concerns described above, and options for new initiatives, above and beyond legal compliance, that management can or will take to respond to this public policy challenge.

Supporting Statement:
Proponents believe that publicly responding to these concerns not only has significant environmental and health benefits, but also helps to build public trust, protect brand reputation, and can safeguard and grow market share by anticipating further regulation and mitigating the risk of product recalls and other legal liabilities. The proponents believe the potential new initiatives that might be contained in the report include new research, communications, guidelines, consumer education or changes in policies.