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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
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Responsible Sourcing Initiative Susan Egan Keane Natural Resources Defense Council November 10, 2008 S. Keane, NRDC, November 2008
NRDC has been in China for 10 years S. Keane, NRDC, November 2008
Our goal: dramatically improve environmental performance of factories in China S. Keane, NRDC, November 2008
What are Major Incentives for Improvement? • Standards: not enforced • Liability: not there • Information disclosure: developing • Customer requirements • Cost savings: theoretically self-sustaining S. Keane, NRDC, November 2008
What are Practical Barriers to Improvements? • Knowledge – do factories know how to improve performance? • Costs – is there a way to make improvements without major investments? S. Keane, NRDC, November 2008
NRDC’s Responsible Sourcing Initiative • Create a committed group of multi-national companies to focus on supply chain • Identify cost-saving and low-cost actions • Improve transparency • Improve Chinese government capacity S. Keane, NRDC, November 2008
Why Apparel? S. Keane, NRDC, November 2008
Energy use is concentrated in a few big industries… But they don’t export much. S. Keane, NRDC, November 2008
Our Work So Far • Initial fact finding at about a dozen fabric mills and dye houses • In-depth opportunity assessment at one fabric dye house • Work with multinational retailers and brands to identify key opportunities at supplier factories S. Keane, NRDC, November 2008
Major Findings of Factory Tours • The bad news: production poorly operated, environmental performance suffers. • The good news: considerable opportunities for low cost improvements. S. Keane, NRDC, November 2008
In-depth Opportunity Assessment S. Keane, NRDC, November 2008
Initial Improvements • Recycling the water at desizing process. Total water saving 4 tons/machine/hour x 4 machines = 16 tons water per hour. • Reusing energy by recycling hot water captured from steam from the drying section back to the desizing tank. • Reusing alkaline waste water from desizing process, to neutralize the acidic emissions from the boiler S. Keane, NRDC, November 2008
Results • Less water, less waste water = • reduced loading to water treatment plant • compliance with environmental requirements • Savings achieved: • 35% water consumption • 10% coal consumption • 5% electricity consumption S. Keane, NRDC, November 2008
Other opportunitiesfrom In-depth Assessment • Line Cleaning • Dye Selection • Production Efficiency S. Keane, NRDC, November 2008
Original order of 20 jobs Rescheduled into Groups of 5 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 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
Right First-time Dyeing S. Keane, NRDC, November 2008
Collaboration with Retailers and Brands • Created collaborative group: • The Gap • H&M • Levi Strauss Inc • Nike • Wal-Mart • Identified common suppliers and screened for possible participation • Preparing to perform opportunity assessments S. Keane, NRDC, November 2008
Next Steps • Identify priority actions • Disseminate and promote findings • Use to help develop supplier policies S. Keane, NRDC, November 2008
