Responsible Sourcing Initiative

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Responsible Sourcing Initiative

• Susan Egan Keane
• Natural Resources Defense Council
• November 10, 2008

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NRDC has been in China for 10 years
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Our goal dramatically improve environmental
performance of factories in China
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What are Major Incentives for Improvement?

• Standards not enforced
• Liability not there
• Information disclosure developing
• Customer requirements
• Cost savings theoretically self-sustaining

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What are Practical Barriers to Improvements?

• Knowledge do factories know how to improve
  performance?
• Costs is there a way to make improvements
  without major investments?

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NRDCs Responsible Sourcing Initiative

• Create a committed group of multi-national
  companies to focus on supply chain
• Identify cost-saving and low-cost actions
• Improve transparency
• Improve Chinese government capacity

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Why Apparel?
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(No Transcript)
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Energy use is concentrated in a few big
industries
But they dont export much.
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Our Work So Far

• Initial fact finding at about a dozen fabric
  mills and dye houses
• In-depth opportunity assessment at one fabric dye
  house
• Work with multinational retailers and brands to
  identify key opportunities at supplier factories

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Major Findings of Factory Tours

• The bad news production poorly operated,
  environmental performance suffers.
• The good
• news
• considerable
• opportunities
• for low cost
• improvements.

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In-depth Opportunity Assessment
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Initial Improvements

• Recycling the water at desizing process. Total
  water saving 4 tons/machine/hour x 4 machines
  16 tons water per hour.
• Reusing energy by recycling hot water captured
  from steam from the drying section back to the
  desizing tank.
• Reusing alkaline waste water from desizing
  process, to neutralize the acidic emissions from
  the boiler

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Results

• Less water, less waste water
• reduced loading to water treatment plant
• compliance with environmental requirements
• Savings achieved
• 35 water consumption
• 10 coal consumption
• 5 electricity consumption

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Other opportunitiesfrom In-depth Assessment

• Line Cleaning
• Dye Selection
• Production Efficiency

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Original order of 20 jobs
Rescheduled into Groups of 5
Pink Orange Blue Orange Black Rice Khaki Rice Lig
ht Brown Dark Brown Dark Yellow
Green Coffee Khaki Charcoal Khaki Light
Brown Grey Army Green Khaki Pink
Pink Orange Orange Blue Black Dark Brown Light
Brown Khaki Rice Rice Khaki Khaki Dark Yellow
Green Coffee Charcoal Light Brown Grey Army
Green Khaki Pink
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(No Transcript)
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Right First-time Dyeing
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Collaboration with Retailers and Brands

• Created collaborative group
• The Gap
• HM
• Levi Strauss Inc
• Nike
• Wal-Mart
• Identified common suppliers and screened for
  possible participation
• Preparing to perform opportunity assessments

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Next Steps

• Identify priority actions
• Disseminate and promote findings
• Use to help develop supplier policies