Last week, the Natural Resources Defense Council (NRDC) released a report outlining the sustainability efforts of 33 Chinese textiles mills that saved $14.7 million in 2014 by cutting water, energy and chemical use as part of the non-profit’s Clean by Design program.
Launched in partnership with the International Finance Corporation (IFC) last year in Shaoxing and Guangzhou, the participating mills make fabric for big brands including Target, Gap, Levi’s and H&M. According to the NRDC, the annual return per mill averaged $440,000, with the top five performing mills saving more than $800,000, proving that a smaller environmental footprint can lead to a bigger bottom line.
But with more than 15,000 mills in a country that produces more than half of the world’s fabric, the achievements of only 33 factories barely makes a dent in China’s pollution. Sourcing Journal talked to Linda Greer, director of Clean by Design and NRDC senior scientist, about the challenges of scaling up the program.
SJ: Who do you think is to blame for the pollution caused by textile and apparel manufacturers in China?
LG: Everyone is a little to blame, including customers who gobble up fast fashion with abandon without considering the likely human and environmental costs that led to such cheap production.
However, I’ll hold brands as most responsible. Here is my thinking: The mills in developing countries are often owned and operated by poorly educated people, some of whom never even finished high school. They perhaps started life as a tailor, then learned to dye cloth, became successful entrepreneurs and then whoosh! They are running a major heavy industrial manufacturing facility. Without training in engineering and business school, they cannot be expected to automatically be sophisticated players in this arena. Sure it’s true that they often don’t care. But it’s also true that they often are not aware of the opportunities available to reduce their water, energy or chemical use. Or if they are aware, they sometimes lack the self-confidence to implement changes, afraid of causing a big problem and messing with success.
SJ: Do you think the government has a part to play in all of this?
LG: It’s absolutely a weak link in the operation and it is fair to point to the corruption and malfeasance behind some of the pollution problems in China. But setting that aside, the concentration of global manufacturing in China has dealt the country an impossible hand.
SJ: What do you mean?
LG: Let’s look at the numbers: China manufactures 40 percent of the world’s washing machines; 50 percent of its textiles, steel and cement; 60 percent of its buttons; 70 percent of its shoes; 80 percent of its color TVs; 90 percent of its toys; and more than 95 percent of its CFL lights and batteries. Those numbers translate into hundreds of thousands of factories that used to be spread out all over the world. We’d have to move the entire world’s environmental officials into China to operate a regulatory program at proper scale.
In my mind, the brands are most responsible for the problem because they know better and it is within their power to do better. These companies used to manufacture their goods at much higher standards here in the United States and in Europe before they moved their production to the developing world and they function at a much higher level of efficiency than the governments in the countries in which they operate.
SJ: Why did the NRDC choose to work with multinational corporations for Clean by Design?
LG: As we evaluated various strategies that might be effective in reducing China’s pollution load, it was clear that we needed to supplement government efforts. Rapid industrial growth in China had outpaced the staffing and capacity of government experts and officials to permit, inspect, and enforce factory discharge limits. Thus, we developed the initiative around the private sector in order to leverage the purchasing power of multinational corporations to reduce the environmental impacts of their factories abroad.
SJ: How did you entice these companies on board?
LG: We figured that the cost-saving nature of the project would be a strong selling point, even if companies and their suppliers did not consider environmental impacts of manufacturing a priority.
SJ: Are you pleased with the program’s progress thus far?
LG: The program has exceeded our expectations in impact. Every one of the textile mills that has participated in Clean by Design—the old and new, large and small, knit, woven and denim—has improved its environmental performance and saved money.
SJ: How are you going to scale up?
LG: Content-wise, we feel we have developed a very scalable model. The “Ten Best Practices” handbook guides mills to the most promising area for improvement and the program builds technical capacity in mill engineers and managers to undertake this work through interactive workshops that make efficient use of clean production expert’s time. Geography also works in our favor: the industry is concentrated in only a handful of provinces in China and within those provinces it is concentrated in only a few dozen municipal areas. This facilitates our efforts to bring mills together in centralized locations for the program.
Of course, one key requirement for scaling up is increasing participation by the multinational apparel retailers and brands. For this, we have launched a collaboration with the Sustainable Apparel Coalition (SAC), which represents 40 percent of global apparel production, to grow participation with its members.
SJ: What are some other problems the program has run into along the way?
LG: In China, our biggest problem is the paucity of high quality clean production assessors who know the textile industry. Mills are rightfully skeptical of the “expert from out of town” and an important ingredient to our success is to use assessors who really know their stuff and can advise mills how to overcome obstacles in implementation. Moving forward, we plan a program to train the trainers to overcome this limitation.
An even bigger problem has proven to be with the multinational corporations that are meant to be the key level in the program. The problem is the immature and poorly focused state of most environmental sustainability programs they run. We definitely overestimated the potential influence of these programs within even the highest profile firms. We found that companies are not focusing on the problems that matter the most in the places of greatest environmental impact in these departments. What’s worse—although there are exceptions—is that these sustainability departments are typically operating extraneous to core business decision-making in apparel firms, and environmental performance is nowhere to be seen in supplier qualifications criteria or procurement decision-making.
SJ: Any plans to expand the program to textile hubs outside of China?
LG: Yes, we are interested in Vietnam, where textile dyeing and finishing is poised to mushroom quickly with the passage of the Trans-Pacific Partnership (TPP) trade agreement. We’d love to “bend the curve” on the likely course of industrial development in that country by implementing Clean by Design in textile mills as they come on line, rather than watch a more typical path of development that creates environmental havoc through lack of adequate oversight.
The beauty of Clean by Design is that when it’s mature it can follow the geography of each multinational’s supply chain wherever it develops.
SJ: Do you think consumers care about a program like Clean by Design?
LG: Consumers are not yet as aware of the environmental impacts of apparel manufacturers as they are of other issues. This is largely because we don’t have a label or tag we can put on clothing to indicate the way it has been produced. However, there is certainly a rising movement of conscious consumers who want to give their business to companies whose ethics align with their own. Participation in Clean by Design is a solid indicator for those consumers that a company is taking concrete steps to improve its environmental footprint.