Tag Archives: NGO

Greenpeace Takes Global Clothing Brands and Chinese Textile Supply Chain to the Cleaners. Who’s Responsible?

15 Jul

“I make my living off the evening news

Just give me somethin’, somethin’ I can use

People love it when you lose

they love dirty laundry”(Don Henley)

(from Greenpeace Report, "Dirty Laundry")

I was reminded of that Don Henley (The Eagles) solo hit from back in the 1980’s when I read about Greenpeaces latest initiative and report…aptly titled…you guessed it, “Dirty Laundry”.  The report focuses on the high levels of industrial pollutants being released into China’s major rivers like the Yangtze and the Pearl and commercial ties between a number of international brands such as Adidas, Nike and Li-Ning with two Chinese manufacturers responsible for releases of those hazardous chemicals.  Greenpeace has also launched the challenge ‘Detox’ Campaign, calling “brands, especially Adidas and Nike, to take the initiative and use their influence on its supply chain.”  The organization unfurled its characteristic banners at Adidas’s main retail store in Beijing this week.

There are several nuances to this story that are important to pass on and collaborative opportunities (rather than the finger-pointing that has plastered Twitter and other media the past 24 hours) to explore.

Supply Chain Challenges …Again!

This latest supply chain environmental wrinkle underscores the challenges multi-national organizations (MNC) are facing daily in oversight and enforcement of first tier, second tier or lower contract manufacturers.  If it’s not Apple under the radar, its Nike, or Adidas, or GE…who’s next?  Recent events concerning Apple Computers alleged lax supplier oversight and reported supplier human rights and environmental violations only shows a microcosm of the depth of the challenges that suppliers face in managing or influencing these issues on the ground.

To be fair, although the pollution is real and the threat of toxics contamination very real, it’s possible that Greenpeace may be sensationalizing Nikes and Adidas’s culpability.  In fact, neither company directly is involved with the key manufacturers labeled in the Greenpeace report.  The two manufacturers are the Youngor Textile Complex in Ningbo, an area near Shanghai along the Yangtze River Delta, and Well Dyeing Factory Ltd. in Zhongshan, China, along the Pearl River.  The Younger Group is China’s biggest integrated textile firm.

“Game on, Nike and Adidas.  Greenpeace is calling you out to see which one of you is stronger on the flats, quicker on the breaks, turns faster and plays harder at a game we’re calling ‘Detox’,” “Whether you’re ‘All in’ with Adidas or believe in the Nike motto to ‘Just do it,’ you can challenge the brand you wear to win the race to a clean finish.” -Greenpeace DeTox campaign’s website.

(from Greenpeace Report, "Dirty Laundry")

Both Nike and Adidas admitted jointly that said their work at Youngor is limited to cut-and-sew production — not “wet processing” such as dyeing and fabric finishing that Greenpeace says is the cause of the chemical discharge.  Greenpeace did not hide behind that fact but made the point (perhaps rightly so) that “As brand owners, they are in the best position to influence the environmental impacts of production and to work together with their suppliers to eliminate the releases of all hazardous chemicals from the production process and their products”.  I agree on the grounds that effective supply chain sustainability practices and corporate governance must be driven by the originating manufacturers that rely on deep tiers of suppliers and vendors for their products.

That being said, I think that to call out Nike and Adidas specifically (along with other companies like Puma) is to suggest that they are not doing the right thing as regards sustainability in the apparel industry.  For instance, Nike has learned from its mistakes if the past (especially on the labor/human rights side of social responsibility) and implemented aggressive governance frameworks and on the ground oversight programs.  Also, the  Nike Considered Index evaluates solvents, waste, materials, garment treatments and innovation, and the company has an internal working group constantly evaluating Restricted Materials lists.

Kick ’em when they’re up

Kick ’em when they’re down

Kick ’em when they’re up

Kick ’em all around- (Don Henley)

Chinese Laws and Regulatory Oversight- Not in Sync

As I noted recently, China is still in the “ramp-up” phases of economic development.  Plus it’s been evident for some years that enforcement of environmental laws and regulations by government agencies has not been on par with the intent of the laws.  According to the report, samples taken from the facilities contained heavy metals and alkylphenols and perfluorinated chemicals, which are restricted in the United States and across the European Union.  These chemicals have reproductive and hormone disruptive effects Therein lies another institutional problem…the laws in the home countries of the MNC’s are not in sync with those in the host manufacturing country- in this case, China.

Writing yesterday in China Hearsay, Beijing based lawyer Stan Abrams offered this up.  “This is a classic law versus CSR problem. The law here in China allows for this activity, yet the allegation is that this is a harmful activity. Should the companies in question merely follow the law or “do the right thing” and either sever ties with the polluter or pressure it to change its behavior?”

It’s likely that (for the foreseeable future) Chinese political and economic systems will remain focused on rapid development at all costs. So it’s critical that local/in-country government policies be aligned as well to support capacity-building for companies to self-evaluate, learn effective auditing and root- cause evaluation, institute effective corrective and preventive action programs and proactively implement systems based environmental management systems.

Multi-Sector Collaboration is the Answer

The apparel industry as a whole has taken a very proactive stance in looking at ways to redesign sustainably, produce its goods taking a cradle-to cradle perspective, and manage toxic chemical use and waste streams so that human and environmental exposures are minimized.  The multi-stakeholder Sustainable Apparel Coalition ironically includes Nike, the Gap Inc, H&M, Levi Strauss, Marks & Spencer, and Patagonia (some of whom are also being targeted by Greenpeace).  Over 30 companies have committed to collaborating in an open source way to drive the apparel industry in developing improved sustainability strategies and tools to measure and evaluate sustainability performance.  In addition over 200 outdoor products companies from around the world have been working together on sustainability best practices and standards, called the Eco-Index, led by the Outdoor Industry Association and European Outdoor Group.

The most successful greening efforts in supply chains in “tiger economies” are based on value creation, sharing of intelligence and technological know-how, and support in developing environmental regulatory frameworks that have the force of law. MNC’s and contract manufacturers can collaboratively strengthen each other’s performance, share cost of ownership and social license to operate and create “reciprocal value”.  Greenpeace wants MNC’s to establish “  clear company and supplier policies that commit their entire supply chain to the shift from hazardous to safer chemicals, accompanied by a plan of action that is matched with clear and realistic timelimes”.  Agreed with that sentiment, but many hurdles remain to cross.

Youngor Textiles, Adidas and others cited in the report have not hidden from the findings, and Youngor has committed to working jointly with Greenpeace to find a workable solution to remove potentially harmful toxics from the apparel manufacturing supply chain.  Solving this problem on the ground will take a multi-stakeholder effort to 1) balance contractual arrangements among many parties, 2) craft good law and enforceable regulations, 3) drive clean chemistry, 4) redesign production processes and use advanced manufacturing technology, and, 5) develop, implement and maintain robust contactor monitoring.

I will be watching carefully to see how this collaborative effort with an NGO giant and big business unfolds…er, should I say “unfurls”.

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Sustainability, Peter Senge, and the Necessary (Supply Chain) Revolution.

29 Sep

I just finished reading an interview with Peter Senge in the October Harvard Business Review.  Senge, for those of you that are unfamiliar, founded the Society for Organizational Learning, is a faculty member at MIT Sloan School of Management, and the author the The Fifth Discipline and The Necessary Revolution.  Senge maintains that to make progress on environmental issues, organizations must understand that they’re part of a larger system. Senge also makes a great point that companies will be in a better competitive position if they understand the larger system that they operate within and to work with people you haven’t worked with before. And while these two skills might seem distinct, in practice they’re interwoven. This is generally because systems are often too complicated for one person to grasp, crossing over many boundaries, both internal and external.  It’s these external boundaries that supply chain management issues begin to become apparent.

According to Senge, and as I mentioned last month in an earlier post about Starbucks, supply chains support whole systems thinking because they focus on the “nature of the relationships”. In the HBR article, Senge maintains that in most supply chains, 90% of them are still transactional.   Manufacturer or retailers still pressure upstream suppliers to get their costs down and little incentive is given toward innovating together.  This in turn erodes trust, however, as I have mentioned in this space, changes are everywhere.  Some companies like Starbucks, Coca-Cola and Walmart are also partnering with Non-Governmental Organizations (NGO) and working in an open source manner with industry associations to innovate.   Successful ventures like Walmart/Environmental Defense Fund, Unilever/Oxfam and Coca-Cola/World Wildlife Fund are taking a collaborative approach to problem solving that drives innovation, breeds trust and industry “cred” and offer NGO’s a wider voice in addressing social, environmental performance issues in the supply chain.

But success in levering supply chains to impact environmental performance ultimate resides with corporate leaders.  Senge maintains to successfully engage thousands and thousands of people around the world from multiple organizations, you’ll need technical innovations, management innovations, process innovations, and cultural innovations.  And to effectively achieve these innovations take bold, often heretical leadership.  Organizations need to often take a step back from the details and “see the forest for the trees” (and hopefully not just see more trees!)

Research and practice in supply chain management is beginning to prove once and for all that supply chain as a “practice” offer unique learning opportunities related to triple bottom line based sustainability.  Learning experiences can range from relatively simple, incremental modifications to a current knowledge set – for example, new environmental regulations like REACH and RoHS – through to complex new approaches which will involve experimentation, small scale piloting and larger scale adaptation (such as those designed to help transporters manage their carbon emissions).

How does your company use “whole systems” thinking to manage supply chain issues? In coming weeks I will begin exploring supply chain learning and management through a sustainability lens, and share some findings from various manufacturing sectors.  It’s my hope that readers can then begin to understand how to apply whole systems approaches across enterprises in the supply chain.  It’s my grand plan that these ideas will gel into practical steps that add value and become a core operating principle in your company.