By and  on October 25, 2011

It has taken awhile, but Corporate Social Responsibility has gone from dealing with public relations fiascoes to a smart and profitable way to do business.

The concept of sustainable products and manufacturing methods has resulted from the desire of the public, governments and companies to be more environmentally conscious and proactive, and the economic realities of rising raw material prices and availability. The push to protect workers is much older, tracing its roots to the early days of the Industrial Revolution and the nascent organized labor movement in the early 20th century highlighted by the Triangle Shirtwaist Fire that is still looked upon as a catalyst for change and standards 100 years after it occurred.

The evidence that sustainability is becoming a core consideration for businesses around the world is documented in a comprehensive report from KPMG International titled “Asia Pacific: New Locations, Extended Value Chains.” The report said sustainability initiatives are being driven by a range of factors, including changes in the macroeconomic environment and in supply chain management, heightened expectations among customers and increasing regulation. Equally significantly, said KPMG, sustainability is itself being viewed as a cause for and a driver of innovation.

A 2010 global KPMG survey showed that sustainability has moved up the corporate agenda, with 62 percent of companies having a sustainability strategy compared with just over half in 2008.

KPMG noted that the changing nature of sustainability commitments requires greater engagement, with companies enhancing the nature and scope of their programs and commitments, and the majority of these can only be achieved by engaging and working with supply chain partners. Consumer products giant Unilever, for example, has committed to cutting the environmental footprint of its products in half by 2020, while doubling revenue. To achieve this, it will review and mitigate impacts across the full life cycle of its products, the study said, from raw material sourcing to product use and disposal.

“Engagement means moving beyond a policing relationship and an end goal can be true environmental innovation yielding original products and financial savings,” the report said.

These product developments and innovations can run from Unifi Inc.’s Repreve line of polyester and nylon derived from recycled plastic water bottles to Lenzing’s “closed-loop system” of production.

Lenzing, which manufactures cellulosic fibers such as Tencel and Modal, said the integration of pulp and fiber production enabled process optimization in many areas and significant conservation of resources, for example by avoiding the energy-intensive drying of pulp.

“The pulp factory therefore does not consume energy, but actually produces it for other sections of the site,” said Angelika Guldt, director of corporate communications for the Lenzing, Austria-based company, referring to the process as wood biorefinery. “Moreover, residual material is used as the main energy source to ensure maximum utilization of the valuable raw material, wood. Our efforts have increased the utilization rate of the raw substance to high-value products to more than 50 percent. Pulp production at the Lenzing site is not only self sufficient, it even generates surplus energy. The remainder of the wood substance, after extracting the cellulose for fiber production and the co-products, is used as the most important biogenic source of energy at the Lenzing site.”

Lenzing has taken this to the next step with Lenzing Modal Edelweiss, a fiber produced by an innovative, eco-friendly manufacturing technology. What Lenzing calls “Edelweiss technology” is based on a chemical process derived from oxygen that is more eco-friendly than previous ones used to manufacture Modal fiber. Guldt noted that Modal is made from Austrian beech wood, taken from forests in northern and central Europe. The tree is said to improve the earth, since it is a deep-rooting plant and conditions the soil. Beech trees propagate by “rejuvenation,” so there is no need for reforestation or replanting of plantations. Forests grow on marginal land and yield a high cellulose harvest without irrigation, fertilizers or pesticides, said Guldt.

The KPMG report noted that regulation around sustainability issues has not historically been as stringent in the Asia Pacific region as elsewhere, but there are some indications that this is beginning to change, particularly with respect to carbon.

Paul Hulme, president of Huntsman Textile Effects, a global provider of high-quality dyes and chemicals for the apparel and textiles sectors based in Singapore, said, “Huntsman TE uses cutting-edge technology to…create innovative products and technologies with intelligent effects to reduce water and energy consumption, meeting the needs of the customers and supporting a more sustainable environment.”

With operations in 110 countries and 14 primary manufacturing facilities worldwide in 12 countries, Hulme said Huntsman takes its environmental responsibility seriously.

“The textile industry is going through a paradigm shift as the world faces a shortage of natural resources like water and energy, and the governments in China and India, the world’s largest textile producers, legislate for tougher pollution and energy control,” he said. “As we are also aware, the textile wet processing and finishing industry is one of the heaviest global consumers of water and energy. By 2030, the world demand for fresh water will increase by 40 percent and by 2050 an estimated billion-plus people will lack the water they need for daily living such as drinking, cooking and bathing.”

To that end, the company has developed a Productivity Improvement Program that offers select customers “operational excellence and differentiation for economic, technological and environmental sustainability.”

“Our customers who request for this service first discuss their needs with us,” Hulme said. “We then undertake an exhaustive audit of their manufacturing processes and finally, we make recommendations that show them how they can enhance their productivity and profitability mostly by saving time, energy and water, all of which come with the added advantage of reducing the environmental impact of textile manufacturing.”

Through this program, Hulme said Huntsman TE can help businesses reduce water consumption by as much as 50 percent, energy consumption by 30 percent, increase productivity and on-time substantially.

Huntsman TE recently introduced Avitera SE, a tri-reactive dye range that delivers water and energy reductions. Avitera SE cuts overall water consumption by as much as 75 percent, and the amount of process and energy time by up to 50 and 70 percent, allowing cycle time to be reduced from seven hours to four hours. This is achieved due to Avitera’s good diffusion and high fixation properties.

On the labor front, CSR policies have evolved and expanded far beyond the original concept of codes of conduct, instituted by some companies more than 20 years ago.

Brands and retailers have found more power in numbers and have formed coalitions with nongovernmental organizations, the International Labor Organization and other like-minded companies in seeking reforms on a host of labor issues, from eradication of child labor to policing and improving working conditions throughout the supply chain.

The question often arises whether a company should be proactive and try to effect change in a country — either through giving stronger representation to unions and workers or trying to raise the minimum wage, as was recently the case in Bangladesh — or pulling business out of a country when problems arise.

Two countries that have been in the spotlight recently and have put apparel companies’ CSR policies to the test are Jordan and Uzbekistan.

In Jordan, allegations of rape at the Classic Brands factory, which employs about 5,000 guest workers and produces apparel for Wal-Mart Stores Inc., Target Corp. and Macy’s Inc., has led Charles Kernaghan, director of The Institute for Global Labor and Human Rights, formerly the National Labor Committee, to call for a boycott for the first time in his 25-year career. The three companies have said they are working with the Jordanian government and ILO to investigate the allegations.

“Our goal is not to shut down a factory, our goal is to improve a factory and we’ve said that all along for 25 years,” Kernaghan said. “I think now we are very close to saying the place should be shut down because it is so disgusting there and workers can be transferred to other factories.”

Uzbekistan poses another challenge for the fashion industry. Forced child labor in the country, affecting an estimated 1.5 million to 2 million children, has galvanized the apparel industry, which came together in September to call for an end to the state-sponsored use of child labor during the cotton harvest in Uzbekistan. More than 60 U.S. and European companies signed a pledge to “not knowingly source” Uzbek cotton using forced child labor, but the issue has been difficult to resolve. (See related story, page 6).

Coalition building among apparel companies, NGOs and government agencies has led to some reform and progress.

“I think the idea there has been that a lot of companies realize they can’t do this on their own because they work in contract factories,” said Nate Herman, vice president of international trade at the American Apparel & Footwear Association. “A brand or retailer only has 5 to 10 percent of that factory’s business and if they work together on an ad hoc basis or in a more formal coalition, they can make more of a difference in those factories.”

Steven Jesseph, president and ceo of the Worldwide Responsible Accredited Production organization, which has certified more than 10,000 factories in 72 countries, said he has seen strides in reforms in the apparel industry in several countries in the past few years, including Bangladesh, Sri Lanka, India and China.

“When we started in January 2000, I said it would take a generation” to bring about widespread reform on a global basis, Jesseph said. “We’re 10 years into that 25-year time frame and I have seen a tremendous amount of progress in certain parts of the world, but other places have a long ways to go.”

load comments
blog comments powered by Disqus