Shareholder Resolutions

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Company: JC Penney
Subject: PVC Packaging and Products
Year: 2008
Sector: Retail Multi-Line
Lead Filer: Domini Social Investments
Outcome: Withdrawn; company provided requested information

JC Penney’s Matters of Principle: JCPenney and Environmental Responsibility is our company’s “promise of stewardship to the environment, the communities in which it does business, customers, employees, and shareholders.”

Our company reports that it has been making a “conscious effort to eliminate unnecessary packaging materials that do not protect merchandise or enhance its presentation on the sales floor” and requires packaging suppliers “to submit alternative solutions.”

Polyvinyl chloride (PVC) is one type of plastic that can be used in packaging and products. Our company’s major competitors, principally Wal-Mart, Target, Sears, and Kmart, have within the last two years made public commitments to reduce or eliminate PVC in packaging and products.

Retailers and other consumers are reducing the use of PVC due to concerns about its health and environmental impacts throughout the supply chain. For example, suppliers producing PVC use toxic chemicals including chlorine, cancer-causing vinyl chloride monomer and ethylene dichloride. When produced or burned, PVC plastic can form dioxins, a highly toxic group of chemicals that are associated with a wide range of adverse health effects. PVC has the lowest recycling rate of the major plastic resins. Most community recycling facilities in the United States do not accept PVC because it is not compatible with most existing recycling streams.

PVC can contain toxic chemical stabilizers such as lead and phthalate plasticizers to soften vinyl toys. In the last two years, major retailers have been obliged to remove from their shelves certain PVC products, such as jewelry, baby bibs and children’s lunchboxes, because of excess levels of lead found in these products. Some of these companies were sued under California’s Proposition 65 law.

New York and other major cities have enacted procurement policies to avoid purchase of materials such as PVC that lead to persistent toxic pollution. California recently became the first state in the country to ban phthalates in children’s vinyl toys. Similar legislation has been introduced in numerous states and at the federal level.

Safer, cost-effective alternatives to PVC are readily available, including safer and recyclable plastics, and bio-based materials.

Our company has not published policies or practices with respect to PVC.

RESOLVED: Shareholders request that the Board publish a report to shareholders on JC Penney's PVC policies and practices, at reasonable expense and omitting proprietary information, by December 1, 2008. This report should summarize which, if any, product lines or categories sold in our stores may be affected by the product hazard and environmental concerns described above, and options for new initiatives that management can or will take to respond to these concerns, beyond those initiatives or actions required by law.

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.