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Citizens Advisers Releases Research Examining EU Rules for the Cosmetics Industry: What They Mean for U.S. Companies, Consumers and Shareholders

Business Wire Press release
October 3rd, 2005

Today, Citizens Advisers, Inc., announced the release of research examining the European Union (EU) legislation and existing U.S. regulations for the cosmetic industry, and what these mean for companies, consumers and shareholders.

In 2003 the EU adopted a directive, which bans the use of substances identified as carcinogens, mutagens or reproductive toxins (CMR's) in cosmetic products. EU Member States transposed the directive into legislation in 2004 and the directive entered into force in 2005. You can read the full article in Corporate Environmental Strategy: International Journal for Sustainable Business (Issues 3 & 4, 2005). To obtain a free copy of the published research visit www.citizensfunds.com.

Authored by Citizens' social research analyst Dr. Vesela Veleva, this regulatory review and analysis found the EU legislation, with the goal of protecting human health and the environment, will have far reaching consequences for the global cosmetics industry. Over 1,000 substances are currently banned for use in cosmetic products in the EU.

For comparison, less than two-dozen chemicals are restricted or banned for use in cosmetics products in the U.S. The FDA does not require manufacturers to conduct toxicological and other safety tests prior to bringing cosmetic products to the market.

In May 2005 Citizens co-filed a shareholder resolution at Avon Products, requesting the company to reformulate all of its products sold worldwide to EU standards. Other global cosmetics manufacturers, such as Revlon, L'Oreal and Estee Lauder, have already committed to global reformulation.

Citizens believes reformulation will not only protect human health and the environment, but also shareholder value by avoiding potential market exclusion, fines, liabilities and damaged reputation. Avon could be a leader in phasing out all carcinogens, mutagens and CMR's from its products sold worldwide. The resolution received 5% of the votes at the 2005 annual meeting.

About Citizens Advisers
Citizens Advisers has been a leader in responsible investing since 1982. Citizens' mission is to generate superior returns by investing in companies that are fundamentally strong and demonstrate good corporate citizenship. Serving the needs of institutional and individual investors as well as financial intermediaries, Citizens offers domestic and global equity,
fixed-income and money market products.

CONTACT: Citizens Advisers, Inc. Paula Parrish, 603-436-1513 x 3645, pparrish@citizensfunds.com