Clean by Design: Gaining Traction

By Linda Greer 16 June, 2015

NRDC's Greer share results from their 'Clean By Design' programme & the need for more action from MNCs

Over the past two decades, companies in the U.S. and Europe have moved large portions of their manufacturing to China, which has become the epicenter of global manufacturing.  No one should be surprised to learn that this intensive concentration of the world’s factories has created serious pollution problems and resource depletion on location.  After all, most industrial processes require considerable water and energy, and most release pollutants in the environment absent control devices and vigilant oversight.  China is now struggling to address the environmental downsides of its phenomenal economic success.

“China is now struggling to address the environmental downsides of its phenomenal economic success…
…Many have begun to look to the private sector”

Many have begun to look to the private sector – the multinational corporations themselves – to help address the problems their manufacturing has caused. Citizens hold them responsible for these problems.  Policy-makers and environmental advocates hold hope that the high degree of corporate competency in operating around the world could be deployed to tame the environmental impacts of that growth.  Corporate social responsibility programs widely advertised by hundreds of leading companies further encourage public hope that the private sector can be an effective “cop on the beat” to address global environmental ills.

‘Clean By Design’ delivers strong water & energy savings in Chinese textile mills

To that end, six years ago, the Natural Resources Defense Council (NRDC) launched Clean By Design (CBD), an innovative green supply chain program to leverage the purchasing power of multinational corporations to reduce the environmental impacts of factories in their supply chain in China (see introductory video here).  Focusing first on textile dyeing and finishing, which has a notoriously large environmental footprint, we based the program on business-value —  a win-win model that would deliver results through production efficiency improvements that reduced the use of energy, water, and chemicals and hence saved money.

NRDC first carefully researched Ten Best Practices for Chinese textile mills that were practical, low cost, and easy to implement and paid themselves back within a year.  At the end of 2013, after successfully piloting the approach across a wide range of mills, and in partnership with four major apparel brands (Target, The Gap, Inc., H&M, and Levi Strauss and Co.), NRDC launched the program to scale.  We released the results of this first year scale up in Shanghai on April 15, where the significant savings of the program were presented to members of industry, the media, and government.
Results from the 2014 program were stellar (click on report cover right to access full report).  Each and every mill we tracked in the program – the young and the old, the large and the small, woven/knitted/denim fabric, etc. reduced environmental impact and made money with improvements that will continue to deliver both reduced resource use and economic benefits in the years to come.  Maximum savings were extremely impressive:  one mill reduced its water use by 36 percent.  Another mill reduced its energy use by 22 percent.  The top mill for economic returns earned 3.5 million dollars in the first year, with projects that paid themselves back in only thirteen months.

 “Results from the 2014 program were stellar.”
The best mill reduced its water by 36% with an investment of RMB48,000 that paid itself back in 3 months

All but two of the 33 textile mills in Clean by Design 2014 undertook efforts to reduce their water use, with a total of 53 projects.  The average water saved at these mills was 9 percent, with the top five mills reducing their water consumption by more than 20 percent. Most frequently, efforts targeting the reuse of process water and grey water yielded the largest and most cost effective reductions. The best mill of this group, which reduced its water by an impressive 36 percent, achieved this success mainly by engineering an inexpensive project with upfront costs of only $7,600 (48,000 RMB) that paid itself back in only 3 months! This amazing water-saving project collected slightly polluted rinse water at the mill and reused it after a simple treatment process of sedimentation and filtration. This mill also shortened its dyeing process which contributed to this impressive reduction.
For more information on the 2014 accomplishments and the Clean by Design methodology, see the full report here.

China clamping down on textiles yet there is scant corporate engagement

Clean by Design dovetails nicely into the Chinese government’s environmental programs and priorities, and it therefore could greatly assist in achieving the China’s environmental improvement goals as it further comes to scale.

Clean  by Design doevetails nicely into the Chinese govt environmental push
Especially given their focus on the textile industry

Recent Five Year plans, for example, have specifically singled out the textile industry for improvement, with the 11^th Five Year Plan calling for dramatic water use reductions and the current 12th Five Year Plan calling in addition for specific energy conservation plans and cleaner production. This focus reflects strong government commitment to textile dyeing and printing, which is regarded as a long-standing traditional pillar industry in China, whose healthy and sustainable development is of vital importance to people’s livelihood.
In addition, the Chinese government has recently required that 15,000 selected factories across the country release real-time environmental discharge and emission data to the public. NRDC estimates that approximately 650 of these factories are textile mills. A leading Chinese nongovernmental organization (NGO), the Institute of Public and Environmental Affairs (IPE), has facilitated access to this information with a pollution map and a user-friendly application for mobile phones that citizens now use to identify the most major sources of pollution in their area during high air pollution days or when a major fish kill occurs nearby.   This reporting initiative holds great promise for increasing the transparency and accountability of factories across the country, including textile mills, which in turn will increase motivation of problematic facilities to improve their environmental performance.
Casual observers might think that large multinational corporations with high-profile, global reputations would have active and effective programs to oversee and limit the environmental impacts of their manufacturing abroad. Indeed, there has been talk of the need for “sustainable” global business practices since the 1987 Bruntland report and the landmark 1992 Earth Summit in Rio de Janeiro. And, in fact, nearly 30 years after Bruntland, there is a proliferation of glossy annual corporate social responsibility reports and more than 100 codes and certification schemes developed to promote reductions in environmental impacts.

“Yet,…. there is scant corporate engagement [from MNCs] on supply chain impacts.”

Yet, on the ground, where it matters the most for China and the developing world, there is scant corporate engagement on supply chain impacts. As a result, uptake of Clean by Design has been slower than it should be, despite its enormous improvement potential and cost effectiveness.
Given the environmental problems that China faces, it is past time for multinational apparel retailers and brands to step up and take more responsibility for the factories in their supply chain.  Clean by Design offers a business friendly way for them to do so.

Further Reading

• Made in China 2025: Are You On The List? – How does the new Made in China 2025 Action Plan fit with other ‘Future China’ plans? Are the ten industries in Made in China 2025 the same as the Circular Economy Ten? Find out why which list matters
• Water Ten & Fashion: 8 Reasons to Leap or Fall – China Water Risks’ Hu shares 8 reasons why China’s Water Ten is actually an ultimatum for textiles to leap or fall. They need to decide which soon, as there is only two to three years before the paradigm shift
• On Being Water Conscious in Textiles – Zhao Lin from Solidaridad expands on the Better Mill Initiative (BMI) and provides solid business cases in water savings for the textile sector. See how water & energy savings can result in sustainable & financially viable gains nd with short payback periods
• Putting Waste Back Into Fashion – China is clamping down on textiles due to the heavy pollution & waste from the industry. With potential new revenues streams in recycling, hear from Redress CEO Christina Dean on how the EcoChic Design Award’s army of sustainable designers is closing the loop on textile waste
• China’s Economy: Linear to Circular – After Germany and Japan, China is the third country globally that has enacted polices to move towards a circular economy. China Water Risk’s Thieriot on how and why China needs to make this transition. Which industries are affected, what is the role of industrial parks?

Textiles & China

• Water Ten: Comply or Else – China’s new Water Ten Plan sets tough action on pollution prevention & control. While this is good for the water sector, less obvious is who or which sectors will be impacted. China Water Risk’s Tan on why China is serious about its fast & furious pollution reforms to propel China to a new norm
• Dirty Thirsty Wars – Fashion Blindsided – CLSA report titled “Dirty Thirsty Fashion: Blindsided by China’s water wars”, examines how China’s water risks could blindside the US$1.7 trillion global fashion industry. Is this the end of fast fashion? Debra Tan expands
• Pollution: It Doesn’t Pay to be Naughty -State Council wants to use the enforcement of law & regulation “to force the economy to transform and upgrade”. See how violation cost surges with daily fines, new standards & discharge permit trading in a bid to push China to go clean
• Risks Shifting Beyond the Wall – In China’s printing & dyeing sector centralised wastewater treatment brings centralised pollution, Ma Yingying of the Institute of Environment & Public Affairs tells China Water Risk. Lax supervision & vague responsibilities between factories & treatment facilities leave brands exposed

Textiles & Corporate engagement

• Financing Innovations in Industrial Water – Given China’s limited water supply & rising water tariffs there is no better time to finance water efficiency upgrades. IFC talks us through their innovative financing programme for the textile sector that not only saves water & energy but also makes a return within a short payback term
  
• One Year On: H&M & Water Stewardship – H&M’s Sustainability Relations Responsible, Julia Bakutis updates us on their Water Stewardship programme one year on. Find out what they have done & what challenges lie ahead for H&M as a water steward
• Water Stewardship: Actions Must Match Risk – Despite acknowledgement of water risks, 58% of companies in CDP’s 2014 Global Water report do not have a public commitment to water. We expand on actions needed in China & globally to match the risk
• Brand Rankings Through A Chinese Lens – See how global and local brands rank across 8 sectors in terms of their supply chain’s environmental impact in this review of the new Corporate Information Transparency Index (CITI) report by IPE & NRDC