Before reading this article, you may want to make sure you're familiar with the difference between Basic and Nested inventories, and reporting threshold choices.
Manufacturer perspective, user perspective
If you're asking which content inventory method is better, the answer often depends on who you are. Generally speaking, HPD users prefer Nested inventories over Basic, because they provide more information. This level of information is often required by certifiers, so manufacturers may want to report using a Nested inventory for that reason. Because more information is provided on a Nested inventory, manufacturers also build the trust of HPD users by choosing this option. However, manufacturers that take a conservative stance on reporting product contents sometimes prefer Basic inventories.
Differences in product type
Does inventory choice depend on product type? Sometimes. Basic inventories may also be easier to complete for simpler products with fewer ingredients, and may provide all the necessary information. But by the same token, a Nested inventory may be just as easy for a manufacturer of a simple formulation to produce, and provides the HPD user with greater assurance of full disclosure.
On the other hand, Nested materials inventories often are most appropriate for complex assemblies with many component parts. In these cases, the HPD mau even be largely generated by data provided to manufacturers by their ingredient suppliers. For product lines with many variations, the Nested approach can be most efficient, since individual materials can be switched and replaced more easily to reflect differences in color, fabric covering, etc.
Why users like Nested inventories: Avoiding toxic substances
Let's get into more detail on why HPD users (including organizations that use HPD data to provide certifications or for product selection recommendations) strongly prefer and in some cases require Nested inventory reporting.
Reporting thresholds are much more meaningful and conservative in a Nested inventory, because they apply to concentrations within each individual material rather than the product overall. This is particularly important for low-weight, high impact materials such as coatings and textile treatments (such as those for fire retardancy, stain repellence, etc.). These are often the most critical materials from a material health perspective. In a Basic inventory those critical substances may fall below the reporting threshold and not be reported. For example, choice of Basic vs. Nested inventory method may be the difference that determines whether a toxic flame retardant chemical used in relatively low concentration appears at all on an HPD. Many designers and certifiers are screening for these specific substances that are toxic at low concentrations, and thus strongly prefer to see a Basic inventory. Even a Nested inventory with a 1,000 ppm threshold may be better from this perspective than a Basic inventory with a 100 ppm threshold. (The best option on the HPD for the user looking for low-concentration substances is a Nested inventory with a 100 ppm threshold.)
Why users like Nested inventories: Easier to read
According to third-party standard organizations like Cradle to Cradle, Basic inventories are difficult to work with and provide insufficient information for the purpose of material health assessments.
Basic inventories are just a long list of chemicals present in a product. To make any sense of them a user or assessor must try and infer where and how in a multi-material product these substances may be used. For example, it makes a big difference if a substance with skin irritation potential is used in the arm rests of a chair versus the caster.
Chemical formulations come from suppliers
Chemical formulation information typically exists at the material level. Chemical composition is controlled by formulators in the supply chain that produce the materials used in products. Therefore it is these suppliers that control the chemical composition and ultimately hold the information on what chemicals are used and need to be reported on an HPD.
Skipping from the material level up to the product level ignores the fact that a multi-material product manufacturer will have different relationships with different suppliers and will thus face different obstacles in obtaining information on different materials. It is common to have complete information on some materials and for other materials a complete refusal of the supplier to share information. There is no way of reflecting this reality in a Basic inventory since the assumption is that information is available equally on all materials in proportion of their weight in the product. Thus a user of a Basic inventory won’t be able to see for which materials a manufacturer had to rely on an old and outdated SDS and for which they really received full material disclosure from the supplier.
Basic inventories are impossible to verify for complex products. With a Basic inventory, as soon as you have more than one or two different materials in a product, it becomes impossible to determine if a disclosure is complete or where information may be missing. For example, in a Nested inventory you can look at the substances disclosed for a specific polymeric material to identify if at least one of each expected additive type has been disclosed, i.e., colorant, filler, antioxidant, plasticizer, and sometimes flame retardant, etc.
In a basic inventory these substances will all just be part of one long list and it is impossible to tell if information is missing for certain materials without outside information. Furthermore, since the material-level information such as material trade name, supplier, etc, is missing, the HPD user or product certifier won't even know whom to contact to request additional information on a material or for verification.
If reporting less than 100%, the Basic inventory allows you to cherry-pick which chemicals to report.
For example, a manufacturer could only report high-weight major chemical constituents, such as the base polymer in a plastic, but leave out key lower-weight substances across all materials. Because the toxicity potential of chemicals varies by many orders of magnitude between different substance types, weight is a very poor proxy for health significance at the chemical level. In fact, it is usually the chemicals present in materials in the 0.01%–1.0% range that are of greatest concern, because they tend to be reactive additives added for a specific purpose such as flame retardancy, stain resistance, etc., or they could be toxic impurities such as residual monomers.
For example, in plastics, while the base polymer makes up 95% of the weight of the material, toxicologists would consider it largely irrelevant from a toxicity standpoint since large polymeric molecules are not bioavailable. It’s the remaining 5% of chemicals that make the difference between a safe or a toxic material.
Nested inventories are convertible
You can easily convert a Nested inventory into a Basic inventory, but not the other way around. Since a Basic inventory contains less information, you can calculate product level concentrations for a Nested inventory and thus convert it into a Basic inventory if desired. However, since a Basic inventory does not contain material weights or an attribution of which substances are present in which material, it is impossible to go the other way around. This consideration can be especially relevant for organizations certifying products to standards such as Cradle to Cradle Certified, because they require Nested inventory information. If given a Basic inventory, they will need to start from scratch.