responsible sourcing initiative
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Responsible Sourcing Initiative. Susan Egan Keane Natural Resources Defense Council November 10, 2008. NRDC has been in China for 10 years. Our goal: dramatically improve environmental performance of factories in China. What are Major Incentives for Improvement?. Standards: not enforced - PowerPoint PPT PresentationTRANSCRIPT
S. Keane, NRDC, November 2008S. Keane, NRDC, November 2008 11
Responsible Sourcing Responsible Sourcing InitiativeInitiative
Susan Egan KeaneSusan Egan Keane
Natural Resources Defense CouncilNatural Resources Defense CouncilNovember 10, 2008November 10, 2008
S. Keane, NRDC, November 2008S. Keane, NRDC, November 2008 22
NRDC has been in China for 10 NRDC has been in China for 10 yearsyears
S. Keane, NRDC, November 2008S. Keane, NRDC, November 2008 33
Our goal: dramatically improve Our goal: dramatically improve environmental performance of environmental performance of
factories in Chinafactories in China
S. Keane, NRDC, November 2008S. Keane, NRDC, November 2008 44
What are Major What are Major Incentives for Improvement? Incentives for Improvement?
Standards: not enforcedStandards: not enforced Liability: not thereLiability: not there Information disclosureInformation disclosure: developing: developing Customer requirementsCustomer requirements Cost savingsCost savings: theoretically self-: theoretically self-
sustainingsustaining
S. Keane, NRDC, November 2008S. Keane, NRDC, November 2008 55
What are Practical Barriers to What are Practical Barriers to Improvements?Improvements?
KnowledgeKnowledge – do factories know how to – do factories know how to improve performance?improve performance?
CostsCosts – is there a way to make – is there a way to make improvements without major investments?improvements without major investments?
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Create a committed group of multi-national Create a committed group of multi-national companies to focus on supply chain companies to focus on supply chain
Identify Identify cost-savingcost-saving and low-cost actions and low-cost actions Improve transparencyImprove transparency Improve Chinese government capacityImprove Chinese government capacity
NRDC’s Responsible Sourcing NRDC’s Responsible Sourcing InitiativeInitiative
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Why Apparel?Why Apparel?
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Biggest polluting facilities in Jiangsu Province
cement, 1%
chemical , 23%
commercial, 3%
electronics, 4%
food, 5%
glass, 2%
metal plating, 9%
metals, 1%
mining, 1%
misc., 11%
textile, 23%
paper, 2%
power, 1%
iron/steel, 5%
leather, 1%lighting, 1%machinery, 4%
wwtp, 2%
S. Keane, NRDC, November 2008S. Keane, NRDC, November 2008 99
Energy use is concentrated in a few big Energy use is concentrated in a few big industries…industries…
Industrial Energy Use in China(2006 & 2007 data)
0
50
100
150
200
250
300
350
400
450
Iron
and
Steel
Chem
ical M
anuf
actu
ring
Cemen
t / C
oncr
ete
Petro
leum
Pro
cess
ing a
nd C
okin
g
Alumin
um &
Non
ferro
us M
etals
Textile
s
Food
prod
ucts
proc
essin
g
Paper
Electro
nics M
anuf
actu
ring
Plastic
Pro
ducts
Rubbe
r Pro
ducts
Clothe
s, sh
oes a
nd h
at m
anuf
actu
ring
Furnit
ure
An
nu
al E
ner
gy
Use
(m
illio
n t
on
s o
f co
al e
qu
ival
ent)
Other
Natural Gas
Coal
Electricity
But they don’t export much.
S. Keane, NRDC, November 2008S. Keane, NRDC, November 2008 1010
Our Work So FarOur Work So Far
Initial fact finding at about a dozen fabric Initial fact finding at about a dozen fabric mills and dye housesmills and dye houses
In-depth opportunity assessment at one In-depth opportunity assessment at one fabric dye housefabric dye house
Work with multinational retailers and Work with multinational retailers and brands to identify key opportunities at brands to identify key opportunities at supplier factoriessupplier factories
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Major Findings of Factory ToursMajor Findings of Factory Tours The bad newsThe bad news: production poorly operated, : production poorly operated,
environmental performance suffers.environmental performance suffers.
The goodThe good newsnews:: considerableconsiderable opportunitiesopportunities for low costfor low cost improvements.improvements.
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In-depth Opportunity AssessmentIn-depth Opportunity Assessment
S. Keane, NRDC, November 2008S. Keane, NRDC, November 2008 1313
Initial ImprovementsInitial Improvements
Recycling the waterRecycling the water at desizing process. Total at desizing process. Total water saving 4 tons/machine/hour x 4 machines = 16 water saving 4 tons/machine/hour x 4 machines = 16 tons water per hour.tons water per hour.
Reusing energyReusing energy by recycling hot water captured from by recycling hot water captured from steam from the drying section back to the desizing tank. steam from the drying section back to the desizing tank.
Reusing alkaline waste waterReusing alkaline waste water from desizing from desizing process, to neutralize the acidic emissions from the process, to neutralize the acidic emissions from the boilerboiler
S. Keane, NRDC, November 2008S. Keane, NRDC, November 2008 1414
ResultsResults
Less water, less waste water =Less water, less waste water = reduced loading to water treatment plant reduced loading to water treatment plant compliance with environmental requirementscompliance with environmental requirements
Savings achieved:Savings achieved: 35% water consumption 35% water consumption 10% coal consumption10% coal consumption 5% electricity consumption5% electricity consumption
S. Keane, NRDC, November 2008S. Keane, NRDC, November 2008 1515
Other opportunitiesOther opportunitiesfrom In-depth Assessmentfrom In-depth Assessment
Line CleaningLine Cleaning
Dye SelectionDye Selection
Production EfficiencyProduction Efficiency
1616
Original order of 20 jobs
Pink
Orange
Blue
Orange
Black
Rice
Khaki
Rice
Light Brown
Dark Brown
Dark Yellow Green
Coffee
Khaki
Charcoal
Khaki
Light Brown
Grey
Army Green
Khaki
Pink
Rescheduled into Groups of 5
Pink
Orange
Orange
Blue
Black
Dark Brown
Light Brown
Khaki
Rice
Rice
Khaki
Khaki
Dark Yellow Green
Coffee
Charcoal
Light Brown
Grey
Army Green
Khaki
Pink
S. Keane, NRDC, November 2008S. Keane, NRDC, November 2008 1717
S. Keane, NRDC, November 2008S. Keane, NRDC, November 2008 1818
Right First-time DyeingRight First-time Dyeing
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Collaboration with Retailers and Collaboration with Retailers and BrandsBrands
Created collaborative group:Created collaborative group: The GapThe Gap H&MH&M Levi Strauss IncLevi Strauss Inc NikeNike Wal-MartWal-Mart
Identified common suppliers and screened for Identified common suppliers and screened for possible participationpossible participation
Preparing to perform opportunity assessmentsPreparing to perform opportunity assessments
S. Keane, NRDC, November 2008S. Keane, NRDC, November 2008 2020
Next StepsNext Steps
Identify priority actionsIdentify priority actions Disseminate and promote findingsDisseminate and promote findings Use to help develop supplier policiesUse to help develop supplier policies