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Adidas Has Greenest Textile Supply Chain in China

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Nowhere in the world has been impacted more by textiles from an environmental standpoint than China. Responsible for more than half of all fabric produced globally, the fashion industry ranks as the country’s third largest source of wastewater and its second largest user of chemicals. But it looks like apparel companies are finally stepping up their supply chain practices to mitigate their Chinese footprint.

According to a recent report titled “Greening the Global Supply Chain,” published by the Institute of Public & Environmental Affairs (IPE) and the Natural Resources Defense Council (NRDC), textiles—along with IT and the diversified industry category—are doing the most to improve the current state of affairs.

After using the Corporate Information Transparency Index (CITI) to evaluate the supply chains of 167 brands, as well as the communication records from 1,607 suppliers that expressed relationships to 86 companies, the report found that Adidas, H&M, Levi’s, Marks & Spencer, Walmart and Esquel were among the top 10 highest-scoring firms.

Adidas, in particular, climbed nine places since last year’s report to the number two spot.

Source: Greening the Global Supply Chain

Source: Greening the Global Supply Chain

Jointly developed by IPE and NRDC, CITI analyzes best practices based on real challenges and multi-stakeholder participation in managing supply chains in China, allocating points for those criteria that are easy to implement to more challenging measures that require a deeper level of management and roadmap for continual improvement.

Additionally, this year’s CITI evaluation expanded its scope from 147 Chinese and foreign brands, as well as added an indicator to the environmental compliance section on centralized wastewater treatment plant discharges in an effort to help confront the complex problems of centralized pollution.

While the Global Reporting Initiative (GRI), the Carbon Disclosure Project (CDP) and the Dow Jones Sustainability Index (DJSI) rank sustainability efforts, supply chain responsibility accounts for too small of a component of their overall scores. For instance, a failing grade in supply chain oversight will impact a company’s total sustainability score by only 5 percent or less.

For that reason, the CITI tool is designed to complement these other efforts by focusing exclusively on supply chains.

Since 2012, textile brands have pushed 751 Chinese enterprises to address some 1,490 environmental violation records. “Key problems that have been addressed include textile mill effluent not complying with standards, which has had a particularly positive impact on lessening the environmental burden of the Zhejiang region,” the report said.

But not all textile companies are cleaning up their act as much as CITI would like: Uniqlo, Puma and Target were among the top 20; Zara and Gap were in the top 30; Primark ranked 38; and The North Face, Lee Jeans and Carrefour tied for 58.

What has been done

• Leading brands have achieved substantive progress in developing mechanisms for green procurement
• Industry brands are working together to create green supply chains
• Multi-stakeholder participation promotes social stability

What’s left to do

• Corporate social responsibility has yet to be extended to key areas of environmental concern in supply chains
• Centralized wastewater treatment represents a responsibility loophole in need of urgent fixing
• Consumers have not yet actively expressed their opinions and choices

How they’re going to get there

• The government should adopt regulations and policies to support green supply chain construction
• Brands should incorporate green supply chain practices into their core production and operation activities
• Companies need to work together to ignite the power of green consumption

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