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WHAT IS
GREENING THE SUPPLY CHAIN?
While many multinational companies have
internal standards for environmental excellence, their supporting
vendors may not abide by these same standards. Supply chain management
refers to the process by which buyer companies require a certain level
of environmental performance for their manufacturing partners and
vendors. When a company imposes environmental conditions on the
products and processes of its suppliers, it is called greening the
supply chain. US-AEP encourages the use of greening the supply chain
techniques because they provide the tools promoting consistent
environmental performance for corporations operating in countries with
varying levels of national environmental regulations and enforcement.
WHAT IS US-AEP DOING TO PROMOTE GREENING OF THE SUPPLY
CHAIN?
- Identifying and supporting multinational companies who champion
the values of greening the supply chain through outreach and
education.
US-AEP considers a "champion" of greening the supply chain to be a
company or organization that, in addition to establishing
environmental criteria for its own supply chain, works with peer
companies to encourage an industry-wide greening of suppliers.
Champions proactively provide outreach and publicly promote supply
chain management. US-AEP works with non-profit group Business for
Social Responsibility as an organizational champion and Nike, Levi
Strauss & Co., Texas Instruments, and United Technologies
Corporation as corporate champions for supply chain environmental
management. Read about
Nike�s championing
efforts.
- Collaborating with U.S. and Asian multinationals who seek to
create supplier outreach programs
US-AEP commissioned a
survey of 30
global companies to ascertain their views on ISO
14001, an international standard for environmental management
systems, and greening of suppliers. The survey revealed that many
firms have environmental criteria for their suppliers, particularly
in the textiles and apparel, automobile, and microelectronics
industries. US-AEP is working to develop supply chain management
programs in these three industries through associations,
multinational companies, and research facilities.
- Delivering technical assistance and training programs to Asian
industry associations that provide expertise to supplier companies
US-AEP encourages the greening of suppliers through workshops,
seminars, professional exchanges, and technical training. Over the
last two years, workshops for the apparel industry have been held in
Hong Kong, Indonesia, India, and North Carolina.
- Supporting the supplier outreach programs carried out by
Business for Social Responsibility for the textile, automobile, and
electronics industries. Read about
BSR & the textile
industry.
Business for Social Responsibility (BSR) is a non-profit membership
organization comprising 1,200 companies that are leaders in the
implementation of responsible corporate policies, including: AT&T,
Bristol Myers Squibb Co., The Coca-Cola Co., Du Pont, Ford Motor
Company, General Motors, Levi Strauss & Co., Nike, Patagonia,
Polaroid Corp., Reebok, and Viacom. US-AEP works with BSR and their
member companies on issues specific to corporate environmental
performance and greening supply chains in Asia. In partnership with
BSR, US-AEP has identified environmental leaders serving as
champions for greening the supply chain in many industry sectors.
WHAT BENEFITS DO COMPANIES RECEIVE BY GREENING THEIR
SUPPLIERS?
Economic benefits
from increased efficiency. By reducing wastes, companies
decrease handling expenses, fines, and even costly inputs.
Supplier's savings may be passed along to buyer companies.
Competitive advantage
through innovation. Efficient production is enhanced
through the use of cleaner technologies, process innovation, and
waste reduction. Reduction in wastes equals dollars earned.
Improved product quality.
Supply chain partnerships help maintain relationships between buyers
and suppliers leading to increased control over product quality.
Consistent corporate
environmental goals. In an era of multi-faceted,
non-vertical manufacturing, companies include supplier outreach to
address corporate environmental goals.
Improved public image.
Consumers, investors, and employees respond positively to companies
with a reputation for good environmental performance.
EXAMPLE: THE TEXTILE INDUSTRY
US-AEP is working with Business for Social Responsibility (BSR) to
promote wide-scale supplier outreach programs in the textile industry.
Through BSR's Education Fund, US-AEP provides a variety of resources
used to develop training programs and technical expertise for BSR's
Apparel Industry Working Group on the Environment. The Working Group
includes representatives from leading apparel retailers and
manufacturers: Eddie Bauer; Gap, Inc.; Fruit of the Loom, Levi Strauss
& Co., L.L. Bean, Nike, and Patagonia. These companies focus on four
areas: water quality, reduction of solid waste, reduction of inputs,
and cleaner processes. Working with the textile mills and garment
laundries that serve as their suppliers, apparel retailers and
manufacturers aim to minimize their environmental impact.
According to BSR's Rebecca Calahan Klein, the Working Group is
successful because "...it allows companies to pool resources in order
to develop the training needed to implement the voluntary guidelines
agreed upon by the members, as well as share leadership, company
practices as to what works and what doesn't." The companies in the
Working Group also realize the value of their efforts. According to
Gap, "We're aware of the effect we can have on the world community and
the environment, and that's why we will persuade our business partners
to meet the terms of our environmental policies. Affiliates who
operate in countries where local or national regulations are less
stringent than our own will still be encouraged to match our
standards." The bottom line is that companies are asking their
business partners to share their corporate philosophies and
commitments towards the environment.
PT. Argo Pantes and PT. Grandtex, two factories of the larger Argo
Manunggal Group in Indonesia, are suppliers to numerous apparel
companies. By incorporating a number of clean technology and
environmental management practices, as well as encouraging training at
their facilities, PT. Argo Pantes and PT. Grandtex have become
environmental "champions" in Indonesia. The plant director of PT. Argo
Pantes came to US-AEP's Clean Technology and Environmental management
training in Raleigh, North Carolina, and sent two technicians to
participate in the US-AEP-sponsored "Green Design Workshop" held in
Hong Kong during October 1997. Representatives of PT. Grandtex
participated in the US-AEP-sponsored course, "Environmental Management
Systems," held February 24-28, 1997 in Bandung, Indonesia.
EXAMPLE: NIKE SEEKS TO GREEN ITS SUPPLIERS
Nike has already made environmental performance a priority,
reaching out beyond Nike-owned facilities to include its manufacturing
partners and materials vendors. In an effort to reach their ultimate
goal of a green supply chain, Nike seeks partnerships with
ecologically-responsible suppliers who have made a commitment to sound
business practices. Facilities not meeting Nike's environmental and
business standards are offered assistance through Nike Environmental
Action Team (NEAT) representatives.
As a champion of environmental management and greening the supply
chain, Nike's commitment to improving eco-efficiency and environmental
performance extends beyond its internal and supplier practices. Nike
conducts outreach programs that advise businesses on the benefits of
supply chain and environmental management. Nike's NEAT representatives
in the United States and Asia are working with US-AEP and the Business
for Social Responsibility (BSR) to conduct regional forums in Asia.
These forums provide education on environmental management systems,
compliance issues, and pollution prevention techniques.
US-AEP-supported conferences, seminars, and workshops provide Nike
with opportunities to speak about the benefits of greening the supply
chain. On the behalf of US-AEP, Nike participated in the First
Asia-Pacific Roundtable for Cleaner Production held in Bangkok,
Thailand on November 12-14, 1997. Nike's presentation to
representatives of business, government, academic, and nongovernmental
organizations offered expertise and strategies for greening the supply
chain based on the Nike experience. |
