Hasbro is a member of trade associations, which can provide the company with numerous benefits. However, sometimes trade associations or other organizations to which a company belongs or contributes may advocate for policies that contradict or undercut company positions on important issues. Companies with serious misalignment face reputational risk and, where misalignment concerns issues core to value
creation, risk to the business. For example, plastic chemicals pose health risks, especially for children who are more vulnerable to the impacts of endocrine disruptors. Leading experts on chemicals and children’s health point out that regulations around the world are not sufficient to keep children safe from hazardous plastic chemicals.Hasbro states that it supports “policies, standards and harmonized legislation to ensure that comprehensive hazard data are available for chemicals on the market and to eliminate or reduce known hazards." At the same time, the company is a member of the Toy Association,which lobbies against regulations to strengthen restrictions for chemicals in toys. For example, the Toy Association lobbied against Oregon’s Toxic-Free Kids Act, which would phase out High Priority Chemicals of Concern for Children’s Health. The Toy Association also maintains a position statement claiming that BPA, a known endocrine disruptor, is a material with a “strong safety record.” This contradicts Hasbro’s approach to keeping children safe, which includes not using BPA in its toys. Corporate lobbying and policy action inconsistent with strengthening regulation to protect children prevents companies from selling safe toys on an even playing field with competitors. The company risks reputational damage by funding organizations lobbying against legislation to keep children safe, contradicting its own public statements and its disclosure that “the safety of
children using our products is our number one priority.” Current disclosures do not adequately inform investors how the Company ensures its direct and indirect lobbying activities align with its public positions and how it is managing policy misalignment risks. While we would expect that management oversee involvement in trade associations and politically active nonprofit organizations, we believe Hasbro should intensify its scrutiny of the actions taken by these groups and disclose to shareholders how it analyzes alignment between the groups’ policy advocacy and Hasbro’s own positions. Proponents therefore request that Hasbro issue a lobbying alignment report similar to those published by Ford, Chevron and Unilever.