Examining the reasons behind retailers’ struggle to gain visibility into their supply chains, SOURCE Contributor Elizabeth Keach reviews the Greenpeace ‘Dirty Laundry Report’, and speaks to Allanna McAspurn, CEO of MADE-BY about creating tools for brands to achieve zero waste discharge of hazardous chemicals.
TRACING YOUR SUPPLY CHAIN – TIER ONE VERSES TIER TWO
Over the past decade, most major UK-based fashion retailers have gained some level of supply chain visibility as they engage in audits and monitoring of ‘first tier’ suppliers with which they have direct commercial involvement. Yet beyond this level, the view remains murky for most, posing a considerable challenge for retailers who are increasingly under pressure to look further down the line where the vast majority of environmental damage is done.
Addressing this recent trend, Allanna McAspurn, CEO of MADE-BY, notes that for the very first time fashion brands are being asked to look at parts of the supply chain that previously weren’t seen as their responsibility. “This responsibility has recently been brought to light by activist campaigns targeting brands to clean up their ‘tier two’ production” explains Allanna, “and therein lies the challenge for brands as they try to locate and monitor this phase, and gauge the extent of their environmental and social impact.”
Tier two refers to factories that engage in fabric production involving ‘wet processing’ – a liquid-based treatments for dying, printing and finishing that typically utilises large quantities of water, energy and hazardous chemicals. This process is at minimum one step below the final assembly of a garment, if not further down the supply chain, and the past few years have witnessed a rise in awareness surrounding tier two’s environmental and social issues as advocacy groups have channelled frustration over environmental damage and human rights violations by drawing attention to suppliers’ practices and publicly naming those retailers who source from them.
THE DIRTY LAUNDRY REPORT – THE CASE OF TOXIC DUMPING IN CHINA
Such was the case when, in 2011, Greenpeace launched a study of water pollution gathered from two of China’s leading textile wet processing factories whose waste water flows directly into the Pearl and Yangtze rivers – the primary water sources for millions. Knowing that Chinese factories often release their most hazardous waste after dark and off the authorities’ radar, in early 2011 Greenpeace sent scientists on an overnight mission to collect water and sludge samples from drain pipes and reservoirs outside the factories in question. Sending the samples to specialist laboratories in both the Netherlands and UK, the analysis concluded that both manufacturers were discharging hundreds of hazardous chemicals directly into China’s largest rivers, including perfluorooctanoic acid (PFOA), perfluorooctane sulphonate (PFOS) and hormone-disrupting Alkyphenols which are banned in most developed countries and are all extremely harmful to human, animal and plant life – even in trace amounts.
Upon this news, Greenpeace launched a further investigation, and, following paper trails, eventually found that both factories had commercial relationship with a considerable number of major retailers, including Abercrombie & Fitch, Adidas, Bauer Hockey, Calvin Klein, Converse, Cortefiel, H&M, Lacoste, Li Ning, Meters/bonwe, Nike, Phillips-Van Heusen Corporation (PVH Corp) and Puma. This information was made public on Greenpeace’s website via the Dirty Laundry Report which caused a public outcry against these practices and prompted the launch of a highly effective social media campaign against the listed companies. (i)
ADDRESSING THE PROBLEM – ZERO DISCHARGE OF HAZARDOUS CHEMICALS ROADMAP
In late 2011, Adidas Group, C&A, H&M, Li-Ning, Nike Inc. and Puma responded by collectively committing to a Zero Discharge of Hazardous Chemicals Roadmap (ZDHC)* eliminating all toxic discharges across their supply chains by 2020. In early 2012, G-Star also joined the commitment. Assuming a collective approach, the signatories agreed to transparency and to a process of reducing and eliminating the discharge of hazardous chemicals within two phases, the first addressing the top eleven most harmful chemicals resulting from the wet processing, and the second being all other hazardous chemicals restricted or controlled under national legislations, identified by existing black lists, or as identified by hazard/use screening protocol.ii
Responding to the success of seven leading clothing brands’ commitment to ‘detoxing’ their supply chains, in early 2012 Martin Hojsik of Greenpeace wrote an open letter to all other ‘polluting clothing brands’, encouraging them to follow suit and sign up to the ZDHC goals. Gaining media attention as he used language one might use with an addict, Mr Hojsik’s open letter outlined seven steps towards ‘coming clean’:iii
1. Admit that you have a problem
2. Go big or go home
3. Be open about your progress
4. Tackle the obvious problems first
5. Make your own action plan
6. Join a support group
7. Make it happen
ENGAGING WITH TIER TWO SUPPLIERS TO REDUCE ENVIRONMENTAL IMPACT OF HAZARDOUS CHEMICALS
Whilst real effort and commitment is taking shape, not surprisingly, the ZDHC’s ambitions to eliminate hazardous chemicals by 2020 has given rise to numerous challenges for the seven brands involved as they create a tangible plan of action. Perhaps the greatest hurdle of all is the fact that, as we’ve seen, most hazardous chemicals are used by tier two suppliers’ and the highly complex model used by nearly all high street retailers of ‘contract manufacturing’ down the supply chain, typically involves thousands of direct contract partners and often tens of thousands of material suppliers across multiple continents. (iv)
In addition, hundreds of chemicals listed as hazardous are often difficult to trace due to lack of visibility into their formulation and preparation, and there is a high level of competition for inexpensive chemicals, often resulting in products containing hazardous cheaper alternatives. Add to this the large volumes of water used in wet processing and it’s no wonder that the levels of toxic wastewater are alarmingly high within this phase.
Following the launch of the first Joint Roadmap: Toward Zero Discharge of Hazardous Chemicals (v), consulting group SustainAbility worked with each signatory brands’ stakeholders to identify opportunities and challenges to their collective goals going forward and it was found that stakeholders were unanimous in their praise of the Zero Discharge commitment, yet they consistently noted the need for experts in the field of green chemistry, pollution control, testing and supply chain management to be involved in order to leverage the plans’ capacity. (vi)
Yet herein lies the challenge of where to begin, and what collaboration to engage in first. With a multitude of variables, standards and systems involved in monitoring wet processing, most brands are unclear of how to initiate the process of cleaning up their toxic waste and managing their energy and water use within their wet processing phase.
LAUNCH OF MADE-BY’S ‘DETOX PACKAGE’ HELPS COMPANIES IMPROVE ENVIRONMENTAL MANAGEMENT
Following hot on the heels of this momentous move by seven of the world’s largest apparel brands, MADE-BY has launched a multi-tiered consulting platform to support the fashion industry in improving both their chemical management and their management of water and energy inputs. By offering supplier energy, waste and water data collection capabilities where brands can see how these resources are being managed and improved upon, MADE-BY’s ‘Detox Package’ provides a bespoke plan of action, beginning with ‘supplier mapping’ which shows brands specifically where their suppliers are located – followed by a Wet Processing tool assessment which identifies the key standards and certifications that are most applicable to their tier two suppliers. From basic awareness rising, to advanced strategic planning, to guidance on certifications and standards and phasing in of green substitutes, MADE-BY is helping brands tackle the challenge of ‘detoxing’ their supply chains.
As the first seven brands of the Detox Campaign move from top tier ‘compliance’ towards actively managing these chemicals and resources at the supplier level, it seems to be only a matter of time before the pressure mounts for others to follow suit. What we have learned from these initial seven is that brands who wish to understand the complexities of their supply chains will undoubtedly embark on a highly collaborative, multi-sector, multi-national journey – a highly ambitious process to be sure. In the long term, however, the case can undoubtedly be made that companies who have a clearer view of their supply chains will be better positioned to avoid public scrutiny and better equipped to make sound financial and governance decisions over the long-term.
*Hazardous chemicals are those that show intrinsically hazardous properties (persistent, bio-accumulative and toxic (PBT); very persistent and very bio-accumulative (vPvB); carcinogenic, mutagenic and toxic for reproduction (CMR); endocrine disruptors (ED); or equivalent concern), not just those that have been regulated or restricted in other regions.