China NGOs tell Brands to Stop Greenwashing

By China Water Risk 8 November, 2012

Lisa Genasci follows up on the 49 global fashion brands named using polluting factories in China

Only 30 followed up; 19 still have not responded
Some brands claimed that their products are eco-friendly but failed to monitor their supply chain
Brands should not take advantage of loopholes arising from weak enforcement

Many brands that say they are producing sustainable product are in reality greenwashing their textile production in China, according to the latest report from five environmental NGOs that shows just how far we still have to go in reducing polluting processes in the textile sector.
“Sustainable Apparel’s Critical Blind Spot,” which can be found here,  was a follow on from a report released in April that named 49 global fashion brands using polluting factories in China and suggested consumers make a “green choice” when buying clothes.
We wrote about that first report here. Led by Ma Jun’s Institute for Environmental and Public Affairs, “Cleaning up the Fashion Industry” listed 6,000 water pollution violations by manufacturers of goods ranging from sports apparel to luxury handbags.
Subsequently, 30 brands began conversations with IPE about how to improve the environmental performance of their supply chain, according to Ma Jun. The remaining 19 brands have not responded positively, he said. IPE urged more retailers to use its database of pollution violations to check on whether it suppliers were included.

Stakeholders & brands need to be proactive

Some are …

“There is value to brands engaging with local stakeholders and trying to benefit from their knowledge,” Ma Jun told China Water Risk. “Some brands are not just waiting passively for others to call on them regarding supplier problems. They are working proactively to address gaps and push for solutions.”

“There is value to brands engaging with local stakeholders and trying to benefit from their knowledge …
Some brands are not just waiting passively for others to call on them regarding supplier problems. They are working proactively to address gaps and push for solutions.”

Ma Jun, Interview with China Water Risk

Clothing brands and retailers such as H&M, Nike, Esquel, Levi’s Adidas, Walmart, Burberry and Gap have all established regular screening mechanisms, are actively identifying supply chain violations and have pushed more than 200 textile and leather factories to clean up.
Among these, Adidas, Nike, Levi’s and H&M have begun also to address environmental challenges with their dyeing and finishing suppliers, the report said. Among China’s 39 major industries, the textile industry ranked fourth in wastewater chemical oxygen demand emissions, according to the China Environmental Statistical Yearbook 2010. Most of the textile producers are located in Zhejiang and Guangdong provinces.
In its two Dirty Laundry Reports, Greenpeace has shown that washing cheap textiles from China often releases toxic chemicals into rivers, lakes and seas. In response, last year four clothing brands, Nike, Puma, Adidas and H&M, agreed to eliminate discharges of all hazardous chemicals across their entire supply chain and product life-cycle by 2020. We reported on this here. The Sustainable Apparel Coalition, meanwhile, has worked higher up the supply chain to measure environmental impact. CWR has the latest on that initiative here.
But Puma in October offered insight into the challenges of turning a company green. New data showed that using sustainably sourced cotton from China had actually increased the water footprint of its “eco-friendly” T-shirts. Overall, however, the company’s eco products outperformed its conventional lines, with a 31 percent reduction in environmental impact.
Last year, the company announced it would price the ecological impact of its production process in an environmental “profit and loss” accounting drive, something we wrote about in an article on redefining corporate fiduciary responsibility.

And some are not …

The latest NGO investigation looked deeper into supply chains following a letter sent September 25th to 49 brands requesting information about pollution management issues at materials suppliers. Besides IPE, authors of the report were, Friends of Nature, Green Beagle, Envirofriends and Nanjing Greenstone.
Many of the brands receiving the letter, including Armani, Calvin Klein, Marks & Spencer, Disney, Zara, J.C. Penney, Polo Ralph Lauren and Tommy Hilfiger gave limited or no responses to specific questions relative to emissions violation problems in their supply chains. This despite Marks & Spencer, for example, promoting its “Plan A”, which is a sustainable business benchmark for global textile companies and retailers.

Marks & Spencer’s Response

In a response to IPE’s report, Marks & Spencer’s Head of Far East Richard Thomas, wrote to CWR: “We take the eco and ethical performance of our supply chain very seriously and have already started a thorough investigation, including visits this month to key dye houses listed in the IPE report to review their environmental performance.”
“As a condition of doing business with our suppliers, all dyehouses that supply our suppliers must adhere to our strict environmental standards,” Thomas wrote.
Ma Jun said he welcomed the improved communication with companies such as Marks & Spencer’s. An interview with Ma Jun on the latest IPE report can be found here.


“Zero waste” – a misleading concept

But companies promoting sustainability should “not continue to let suppliers pollute the environment and hurt communities whilst using concepts such as ‘zero waste’ and ‘carbon neutral’ to greenwash their performance,” the environmental NGOs wrote in its report.

“[companies promoting sustainability should] not continue to let suppliers pollute the environment and hurt communities whilst using concepts such as ‘zero waste’ and ‘carbon neutral’ to greenwash their performance”

Sustainable Apparel’s Critical Blind Spot Report

Part of the problem is enforcement, Ma Jun said. There are an estimated 50,000 textile mills in China, making this a challenge for the Chinese Ministry of Environmental protection, which is relatively small. At the same time, the cost of a violation is low. There is similarly little incentive to think about energy, water or chemical usage since the cost of inputs is low.
“The government needs to enhance enforcement, but this shouldn’t be an excuse for brands to take advantage of the loopholes,” he said.
The NGO report draws attention to the fact that textile exports from China have dropped recently, weighed by higher labor costs in China, trade barriers, the appreciation of the RMB and higher resource costs.
Big brands have moved some of their cut and sew production to South and Southeast Asia.  Nike shut down its only shoe factory in China and recently, Adidas also closed its only factory in China, leading people to believe China is steadily losing its status as the textile factory to the world amid rising labor costs there.

Materials production is still concentrated in China: Brands are still exposed

But materials production is still concentrated in China, with exports of these products rising steadily, according to the report. This is the most polluting portion of the apparel supply chain.

“The government needs to enhance enforcement, but this shouldn’t be an excuse for brands to take advantage of the loopholes”

Ma Jun, Interview with China Water Risk

In the raw materials processing sector, which includes dyeing and finishing, exports are growing steadily. According to the 2011/2012 China Textile Industry Report, for the six main printing and dyeing product categories, the total amount of exported printed and dyed cloth was 14.412 billion meters which showed a year on year growth of 13.76%.
The value of exported printed and dyed products was US$16.979 billion, which showed a year on year growth of 31.26%. However, at the same time the total value of all exported textile products only increased by 0.49%.
The cut and sew industry provides the most jobs, uses less water and energy and pollution discharge is not a big problem. However, the reverse is true for textile production. Essentially, China has kept the dirty part of the business, while allowing the relatively clean, job-creating cut and sew industry to wane.
Sustainable apparel in particular,  has a ”dangerous blind spot,” according to the report, which means that dyeing and finishing mills and factories lower their environmental standards to cut costs and win orders in a race to the bottom.
We as consumers must recognize that we can choose not to buy the cheapest item on the shelves, but to acquire less and from companies that truly care about not doing harm to our planet.

Further Reading:

  • Interview with Ma Jun on the latest report: Sustainable Apparel’s Critical Blind Spot
  • Investors Beware: Blackholes & Blacklists: Debra Tan reviews water risks to the textile industry, how they should be priced into valuations and major shareholdings of key institutional funds investments in global brands linked to pollution
  • No Chemicals Please: Greenpeace’s Ada Kong walks us through endocrine disrupting chemicals used in the textiles sector
  • Textiles: Enzymes to the Rescue: Dupont’s Scott Brix on how enzymes and other bio-based solutions could help save water and reduce traditional chemical use
  • Higg Index: The Challenges of Measurement: Jason Kibbey, Executive Director of the Sustainable Apparel Coalition walks us through the development of the Higg Index
China Water Risk
Author: China Water Risk
We believe regardless of whether we care for the environment that water risks affect us all – as investors, businesses and individuals. Water risks are fundamental to future decision making and growth patterns in global economies. Water scarcity has emerged as a critical sustainability issue for China's economy and since water powers the economy, we aim to highlight these risks inherent in each sector. In addition, we write about current trends in the global water industry, analyze changes occurring both regionally and globally, as well as providing explanations on the new technologies that are revolutionizing this industry.
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