Cleaning Up Their Act

For companies that produce and source goods outside the U.S., insuring eco-friendly production processes requires a lot of oversight.

Appeared In
Special Issue
WWD Green issue 10/30/2007

For companies that produce and source goods outside the U.S., insuring eco-friendly production processes requires a lot of oversight.

This story first appeared in the October 30, 2007 issue of WWD.  Subscribe Today.

When apparel and textile factories release dangerous chemicals and greenhouse gases into the environment, the pollution eventually finds its way to the corner offices of Seventh Avenue.

That’s where fashion’s top players, who use their brand names and M.B.A.’s to market and steer sprawling multinational operations, have to get their hands around the problem and a firmer grip on their supply chains. They’re often the ones whom customers hold responsible, but also the ones best placed to bring about change.

“A lot of people talk a lot about it, do a lot of marketing without substantive measurements and controls,” said Manfred Wentz, head of Oeko-Tex’s U.S. certification board, which helps insure factories meet certain standards.

Fashion companies are beginning to take a closer look at the science behind eco-conscious manufacturing. Having a handle on the entire supply chain is essential, especially since it is the upstream producers, the textile mills and yarn facilities — which are contractors for fashion brands and not generally owned operations — that are prone to pollution problems like dumping dyes into local waterways.

“There is a lack of good information about potential suppliers around the world,” said Josh Green, chief executive officer of Panjiva, a New York-based company that helps fashion brands evaluate factories with a database on more than 40,000 apparel suppliers around the globe.

A sample reading from the Panjiva database found that only 10 percent of apparel suppliers are backed up by any kind of certification and only 3 percent carry environmental certification, such as the stamp of approval provided by Oeko-Tex.

“The factories are not leading the charge,” said Green. “They’re not getting signals from the buyers that it is of critical importance to be certified as being environmentally responsible.”

According to Marsha Dickson, chair of the University of Delaware’s fashion and apparel studies department, “Environmental laws and regulations vary greatly in producing countries. [For example], China has some of the strictest regulations, but they’re not enforced. It’s a matter of whether there has been an importing brand that really pushed it. That’s going to be the difference and it’s going to be more on a factory-by-factory level.”

Indeed, the Chinese government is placing great emphasis on green initiatives. How serious they are about reform, however, is cause for question.

Shanghai hosted an installment of Live Earth this summer, and at the People’s Party Congress held in mid-October, environmental topics topped the agenda. At the Congress, the country’s leaders, Hu Jintao and Wen Jiabao, both mentioned the need to confront China’s environmental problems.

The problem is enormous. China’s rapid economic growth has entailed a new industrial revolution at a pace and scale the world has never before witnessed, with short-term profits prioritized over long-term sustainability. Speed bumps like environmental and labor monitoring are only beginning to be installed as afterthoughts. While national legislative protections exist, enforcement on the ground is spotty due to decentralized oversight and local cronyism.

The textile and apparel industries play into the problem — particularly textile manufacturers that dump untreated dye wastewater. Negligent policing of supply chains is a major contributor to the pollution.

Green is not a new concept in China. In the late Nineties, then-Premier Jiang Zemin promulgated the slogan “Lovingly protect green culture,” which translated into a rush to construct urban parks — often built primarily of concrete — in order to meet quotas for “green spaces.” Subsequent measures to protect China’s environment have been similarly token or symbolic. The current campaign to encourage the use of energy-efficient lightbulbs, for example, comes at the same time the government is promoting private car ownership as a driver of growth.

In May, eco-awareness got still another boost in the minds of the Chinese public and government when Lake Tai turned green from an infestation of algae. Caused by an accumulation of untreated waste — mostly sewage and chemical discharges from area factories — the resulting water shortage in the adjacent areas of Shanghai, Jiangsu and Zhejiang has provided a wake-up call to the Chinese government.

In 2006, China’s State Environmental Protection Agency joined with the World Bank to release an exhaustive report titled “The Cost of Pollution in China.” In it, they estimated that in 2004 pollution cut 511.8 billion yuan ($68.4 billion at current exchange), or about 3 percent out of China’s GDP.

Watchdog groups praised the report for addressing China’s “Green GDP” but said it underreported the extent and effects of pollution in China. Even SEPA deputy director Zhu Guangyao has stated that the cost of environmental damage tops 10 percent of China’s total GDP, and other experts estimate the number to be as high as 15 percent, effectively negating China’s double-digit annual growth over the past decade.

The cost goes beyond the monetary: pollution takes a very high toll on the health of China’s citizens. An estimated 98 percent of Chinese breathe polluted air, and at least 400,000 die each year from it. Various reports place China’s total annual deaths from all pollution-related causes between 500,000 and 2 million people.

China’s national government is dedicated to addressing pollution, as the rhetoric issuing from the Party Congress shows. SEPA reports that between 1996 and 2004, the government invested 952.27 billion yuan ($127.3 billion) in pollution control. China’s laws are harsh on pollution and polluters, and on Oct. 15, SEPA and the Ministry of Commerce announced new legislation that companies found illegally discharging pollutants or seizing environmental resources will lose their export licenses for one to three years.

“We encounter a lot of bricks and walls with the government, but the current leadership also includes a lot of technocrats who are willing to listen to and engage with us,” said Kevin May, toxic campaigns manager for Greenpeace Beijing.

Factories, meanwhile, face increasing pressure due to inflation, the rising yuan and intense competition to slash their production costs, and environmental safeguards are often the first thing to go.

“As far as polluting industries go, textiles is not the one of the worst,” said May. “However, the amount of wastewater dumped in China is pretty huge, and merits attention. China faces an enormous water crisis.” According to some reports, half of the Chinese population lacks clean drinking water, and 80 percent of China’s rivers are too polluted to sustain fish.

“All industries should work to prevent pollution, and in the long run it helps China to develop [more sustainable production procedures],” said May, “and international companies should set the standard.” However, they currently have little legal or financial incentive to do so in China — not until their end clients start demanding corporate responsibility be global, not just limited to home countries.

“If you produce green, you will always pay more,” said Bi Li, owner of apparel company Earth Speaks Organic Fashion. “Because you are the first, and not in the mainstream market yet, you are making smaller product batches. The demand is low, and that keeps costs high.”

Li’s 10-year-old label, which manufactures in China and sells in the U.S., uses entirely organic materials. For the past five years, she has worked exclusively with one factory in Shaanxi Province, China’s most polluted region. “I looked for six months to find the factory, looking for a place that had fair working conditions, with eight-hour days, competitive pay, health insurance and such.”

Li suggested that working directly and closely with one’s Chinese producers is the best way to insure ecological production. “My advice for big companies sourcing in China is to find a way to own or at least know the owner and management of your factories very well.”

Greenpeace’s May said foreign companies looking to invest in or produce in China have a responsibility to fully investigate their decisions beforehand. May issued similar advice as Li. “Some [multinational corporations] are known to have illegal-behaving factories, but they could produce cleanly if they wanted to. They can do so by sending more experts to examine their factories, and by cooperating more closely with their supply chains.”

China is not alone among the major manufacturing nations looking to clean up its act.

As Vietnam aggressively seeks expanded markets for its textile and garment industry, it also is minding international pressure to protect the environment.

“Environmental protection is one of the important factors that make us competitive,” said Le Quoc An, president of the Textile and Apparel Association of Vietnam.

The Vietnamese industry approaches it from two perspectives, he said. First, it aims to protect the environment during production, and second, to protect the environment at the point of the user. The industry spends 60 cents per square meter on environmental activities that include wastewater treatment and safe packaging, he said.

“We have to guarantee there are no poisonous materials in our fabrics, our packaging can disintegrate easily and we meet international health standards,” Le Quoc An said. “The textile industry in Vietnam pays great attention to environmental protection. It helps our business.”

In addition, European firms are bringing environmental clean-up technology to Vietnam. IEEM University Witten-Herdecke in Germany is working on joint ventures for wastewater treatment in Vietnam.

In the Western hemisphere, the U.S. government is working to increase the amount of green manufacturing in foreign countries. Trade deals, for instance, increasingly acknowledge the impact business has on the environment. The Central American Free Trade Agreement, which encourages commerce between the U.S., El Salvador, Honduras, Nicaragua, Guatemala, the Dominican Republic and Costa Rica, includes an environmental chapter in which countries agree to enforce their own environmental laws and not to weaken them to boost trade.

Going a step further, Democrats now in control in Congress pushed for and won tougher environmental language in a pending free trade deal with Peru, setting the bar higher for future pacts.

Until legislation and oversight catch up, however, it’s up to individual companies to insure that their goods are manufactured using environmentally friendly methods.

Ventura, Calif.-based Patagonia employs mills and factories from Japan and Mexico to Thailand and Vietnam to make its clothes. To help insure that the suppliers and contractors adhere to the environmental principles Patagonia upholds, the outdoor apparel company, which tallies annual sales of $270 million, relies on firms it has long-standing relationships with. For instance, it has been working with sewing factory Siam Knitwear in Bangkok since 1992.

In addition, the company gets dedicated teams in factories to focus only on its products. Rivercross/Nova Link in Matamoros, Mexico, reserves one-tenth of its 3,000 employees to make some of Patagonia’s best-selling products, including the $70 vest made of “synchilla,” or polyester recycled from plastic soda bottles.

Patagonia also employs Global Standards, a consulting company based in Vietnam, to conduct audits on labor, environmental and safety standards in Asian factories. “Through our social auditing, we have general environmental awareness at all our facilities,” said Nicole Bassett, the company’s social responsibility manager, who oversees the social welfare of the supply chain.

Last May, Patagonia also joined a network of companies using Switzerland’s Bluesign Technologies AG to advise mills on how to conserve energy, reduce toxicity and process wastewater more efficiently. Though the responsibility and costs for making the changes suggested by Bluesign rest with the mills, Bassett said working with Bluesign is “the next level in being environmentally responsible.”

She said Patagonia doesn’t want to discover years later that the fabric manufacturing process entailed chemical processes that weren’t good for the environment. Any upgrades to clean up the production process will mean Patagonia will have to pay more for fabrics, but the price is worth it, she said. “It’s the end goal to get the most environmentally responsible product,” she said.

Jamie Haller, women’s design director for Maywood, Calif.-based Ever, which launched a five-piece organic cotton collection for next spring as part of its contemporary line, hired a factory in Portugal that cuts, sews and washes garments for many organic clothing lines sold in the U.S.

For Adam Sidell, director of production of Peligrosa Inc. in Los Angeles, the effort to insure environmentally friendly production for his cashmere and organic cotton line involves making eight trips each year to visit contract factories in Japan, Hong Kong and southern China. While Japan has stringent laws about labor and pollution, he acknowledged that it’s an ongoing process to educate the factories in China on how to be as environmentally gentle as possible.

“I can’t get the factory to go green because China doesn’t get it yet,” Sidell said.

Sidell said he did convince the Chinese factory to set up a separate production line dedicated to clothing made of organic fibers. “I’m trying to do the best I can,” he said.

Alice Heller, founder and president of Los Angeles-based contemporary line Zooey, also took the initiative to visit a factory in Peru before entrusting it with production of her new organic cotton line dubbed Zooey Green. Earlier this year, Heller and Zooey designer Sandy Oh-Yang flew to South America to check on sewing and dyeing plants and verify that the cotton is grown organically in Peru. Though she didn’t have to make the trip, Heller got a chance to make adjustments, such as adding some chemicals to the vegetable dyes to amplify the colors’ vibrancy.

Shelling out as much as $6,000 to go on a three-night trip to Peru was worth the price for the peace of mind it brought, she said. “I saw with my own eyes exactly what they are using and how they do it,” Heller said. “To be perfectly honest, they were more concerned with the purity of the product than I was. I can be as pure as I can, but I can’t sacrifice the product. I’m in the fashion business.”

Marci Zaroff, founder and president of Under The Canopy in Boca Raton, Fla., said she prefers making her knit clothing, bathrobes, bedding and other products in the same countries where the organic cotton, bamboo, organic linen and other textiles she uses are grown. Since Mexico doesn’t grow any cotton and it would be too expensive to ship fabric to factories there, Zaroff rejected America’s southern neighbor as a manufacturing location.

Instead, Zaroff relies on Turkey for her organic linen and bamboo wares and Peru for her organic cotton products. Sourcing the fabrics and production in one country also reduces the costs and carbon footprint — the amount of carbon dioxide produced, from using planes, boats and trucks to ship all over the world, she said. “We try to be in one place,” Zaroff said.

— With contributions from Joyce Barrett