Thought starter:

Co-development event on
efficient and secure flow of
information in the supply chain

1.0 OBJECTIVES OF THE PROJECT AND DESIRED OUTCOMES OF THE EVENTS

The Government of Canada has launched national consultations to seek input on how the Government
can take action to improve information sharing about chemicals in product supply chains and on
mandatory labelling for certain consumer products. Environment and Climate Change Canada and Health
Canada have engaged Wood Canada Limited (in collaboration with the Lowell Center for Sustainable
Production) to lead the consultations in a policy lab format1 in order to address these complex challenges.

This document supports the co-development phase, which involves a series of virtual events. The desired
outcome of the co-development events is to obtain a short list of evaluated and prioritized solutions for
enhancing transparency on chemicals in products, with a focus on supply chain transparency (business-to-
business information sharing) and labelling (business-to-consumer information sharing) in the form of
either physical labels or digital methods of providing information. These solutions could include
innovative approaches, tools or methodologies for regulations or other initiatives, and will help to shape a
set of policy ideas and options for Canada to address the goal of enhancing information about chemicals.
These solutions:

• Should be practical and have the potential to be successfully developed and implemented;

• Should reflect a wide range of perspectives and views provided, and a process of challenging and
deliberating ideas;

• Should be effective and suitable to address chemical ingredient transparency and labelling in Canada
as holistically and sustainably as possible. The policy lab is not a consultation on a regulatory
proposal, but a collaborative process to co-develop potential solutions to complex challenges, in
order to inform subsequent regulatory and other initiatives.

1
A policy lab is an innovative approach that fosters collaboration between interested parties who can very actively help develop
solutions to a policy problem.
Policy Lab on Supply Chain Transparency and Labelling May 2022
Thought starter for co-development event on efficient and secure flow of information in the supply chain Page 2

2.0 OVERVIEW OF THE EVENT

Based on background research, past consultations with the Government of Canada, and feedback from
the introductory engagement activities of the policy lab (questionnaires and webinars), the following main
challenge areas have been identified for discussion in the policy lab:

1. information provision to users, including the scope of information, accessibility, and trust.

2. efficient and secure flow of information in the supply chain, including digital transformation,
standard harmonization, data security, and protection of intellectual property.

There will be five co-development events: three events will focus on information provision to users, and
the other two will focus on efficient flow of information in the supply chain. Each of these events will be
divided into two sessions. For each of the events focusing on efficient and secure flow of information in
the supply chain, the first session will focus on discussing key questions related to this topic (see Section
3.3) and identifying a long list of potential solutions. In identifying this long list of potential solutions,
participants will discuss key barriers and examples of successes and their enabling factors. The second
session will focus on the evaluation, prioritization, and refinement of these initial ideas to generate a short
list of solutions. The sessions have been designed to be collaborative and to benefit from the experiences,
values and perspectives of all participants engaged in the process.

3.0 THE CHALLENGE AREA: EFFICIENT AND SECURE FLOW OF INFORMATION IN THE
SUPPLY CHAIN

3.1 Overview

Global supply chains span multiple jurisdictions and are often many layers deep. A wide range of business
actors are engaged in the chemicals supply chain, including chemical manufacturers, product designers
and manufacturers, formulators, distributors, retailers, disposers and recyclers. Good information on the
chemicals that are in the thousands of diverse products that are traded within corporate supply chains is
essential. There is increasing demand from consumers for readily accessible chemical information on
product labels to help them make informed choices. Companies need chemical ingredient information for
complying with regulatory requirements, setting and meeting environmental, social, and governance
targets, to enable the informed substitution of toxic chemicals with safer alternatives, and to ensure the
safe re-introduction of materials (for example, metals and plastics) within a circular economy.
Furthermore, governments need information about product content in order to be able to assess risks,
determine the exposure of Canadians and of the environment to chemicals, and design and implement
risk management measures, where appropriate.

This challenge area will consider how to address this complexity to ensure accurate and sufficient
information flow to these multiple users that does not overburden suppliers of chemical composition
information and provides protection of intellectual property and confidential business information where
appropriate. This information flow should help enable regulatory compliance, the establishment and
implementation of environmental, social, and governance targets, the informed substitution of toxic
chemicals with safer alternatives, and the safe re-introduction of materials (for example, metals and
plastics) within a circular economy.
Policy Lab on Supply Chain Transparency and Labelling May 2022
Thought starter for co-development event on efficient and secure flow of information in the supply chain Page 3

3.2 Main barriers and drivers

To provide further context for the discussion of solutions in this challenge area, the following table
identifies a number of key drivers and barriers for the efficient and secured flow of information in the
supply chain.

Main drivers Main barriers

• Demand from consumers and business
customers is driving companies to
know and share more about the
chemicals in their products and supply
chains.
• Industry needs data to support
regulatory compliance.
• Improved supply chain communication
and collaboration can created
opportunities for leveraging potential
cost savings.
• Digitalization is enabling rapid
experimentation with systems to track
product ingredients and undertake
various product stewardship practices,
while protecting confidential business
information.
• The complexity of international supply chain
means that in many cases information has to be
passed down the supply chain through many
actors across different countries, which makes data
security and the protection of confidential business
information more challenging.
• New data sharing systems may be constrained by
old infrastructure. Data exists but is not always
transferable.
• The resources required to compile, manage and
communicate information on chemical ingredients
in the absence of established standards and digital
information systems, and the development and
implementation of mechanisms to protect data
security and confidentiality can be complicated
and costly.
• Declaring information as confidential can in some
cases be used as a regulatory loophole to avoid
disclosure of chemical ingredient information.

3.3 Suggested discussion points for the event

During the events, we will engage in small group dialogue to discuss the following questions in detail. We
encourage you to reflect on these in advance.

• Comprehensiveness of data collection – What are specific examples or approaches that you
know of for providing as comprehensive data collection as possible on chemicals from national or
global supply chains? How should they be further developed and implemented?

• Efficiency of data collection and sharing – Based on your knowledge and experience, what
characteristics of the supply chain data flow would you like to see improved to ensure the
efficiency of 1) data collection and management on chemicals from your supply chain and 2) of
data sharing with customers and others?

• Data security and protecting CBI – What are some specific approaches you know of that allow
sharing of chemicals ingredient data while protecting confidential business
information/intellectual property? Are there specific tools or approaches you know of for ensuring
that the data shared is secure? How should they be further developed and implemented?