China Textile Magazine Article: The Power of NGOs in Driving Industrial Energy Efficiency
Posted below with the permission of the author, Xu Huan, is the English translation of an article about NRDC’s Responsible Sourcing Initiative (RSI) which appeared in China Textile Magazine‘s June Issue:
In today’s society, due to the constant growth of the market economy, all production units and individuals have a dual identity; they are both consumers and producers. Any company or individual can make a substantial contribution to environmental protection through promoting green sourcing. This is our undeniable duty.
The Power of NGOs in Driving Industrial Energy Efficiency
Written by Xu Huan
The starting point of a green textile trade
At the first International Textile Industry Green Summit, held on March 29th in Changshu, Jiangsu Province, partners from Changshu and Jiangsu Province came together with NRDC (Natural Resources Defense Council) to kick off “The Textile Industry’s Best Practice City,” a project aimed at helping textile enterprises in Changshu contribute to the low-carbon economy and sustainable development. This marks a major step taken by NRDC’s Responsible Sourcing Initiative (RSI). Through influencing the purchasing orientation of multinational garment retailers and well-known brands, this initiative aims to help textile mills in the supply chain control pollution and promote environmental protection.
Other initiators of RSI also include Wal-Mart, Gap, Levi, H&M, Nike and Li & Fung—the most influential multinational buyers in the world. With these major buyers at the top of the supply chain on board, this project exudes a unique kind of power. According to Franky, the director of Gap’s environmental affairs, Gap has been committed to social responsibility work for 15 years, and its efforts have steadily evolved from simple priorities such as labor protection to include more complex ones such as water resource conservation, energy development and environmental protection. “Some jobs can not be done single-handedly. In 2010, we will focus on the supply chain, training enterprises both up and downstream and setting requirements of clean production and energy saving for our raw materials suppliers.”
Gap, Wal-Mart, Nike and the like are not alone in having transformed their Corporate Social Responsibility Departments into a “Sustainability Departments.” Mr. Chen Jie, the former Director of Fabric for Wal-Mart’s Global Fabric Sourcing Office, noted that in October of 2008, Wal-Mart established its Department of Sustainability, setting higher social responsibility requirements for the company itself and advancing incentives for energy savings and emissions reductions in the supply chain. The company also requires that its top 200 Chinese suppliers reach a 20% goal in energy efficiency and emissions reduction. Nike was also one of the companies to realize consumers’ demand for green products, so the company has been working on environmental protection and circular usage for years. Bob, the Director of E2 Nike, disclosed that from 2010, Nike will require that environmental protection and energy efficiency in the manufacturing process be taken into account starting in the design phase. Nike will also pay careful attention to the impact of the product’s life cycle on the environment.
In any case, the measures being adopted by these sourcing giants indicate that the trend of global consumption is gradually being pushed towards “sustainability” and “green” brands. Being green and environmentally friendly will eventually become the undeniable hard index of manufacturers.
It is worth mentioning that the “Textile Industry’s Best Practice City” is confined to textile mills in Changshu. This shows, on the one hand, that Changshu textile companies are working diligently to improve their environmental profile and, on the other hand, that the giants at the end of the supply chain are paying more attention to Changshu. Through close collaboration with NRDC’s RSI, Changshu has taken the lead in implementing energy efficiency and environmental protection management, emerging as the starting point of green textile trade between the Chinese textile industry and international clients. This presents the city with an opportunity to enter the international green trade sourcing chain for textile products. The municipal government of Changshu holds high expectations for this undertaking. In the kick-off ceremony, Mayor Hui Jianlin clearly stated that “the city will deepen its cooperation with NRDC and co-found a mechanism for long-term cooperation. Under the support of the Ministry of Environmental Protection and Jiangsu’s Environmental Protection Bureau, we will shape Changshu into a green Davos in the international textile industry.”
RSI is not a means that these international end buyers use to simply shirk their social responsibility for environmental protection. The first benefit for Changshu mills that joined RSI via the “Textile Industry’s Best Practice City” program is that they are provided a free, mill-specific energy efficiency assessment and methods for improvement by industry experts. To minimize the cost and impact on production of these changes, the experts begin with the front line of production, with the equipment currently available. They select some improvement measures that are easy to implement, require low investment and enjoy a short payback period (around 8 months). At the project kick-off ceremony, a handbook called “NRDC’s Ten Best Practices for Textile Mills to Save Money and Reduce Pollution” was distributed to Changshu mills. The manual describes in detail ten measures that help to save water, energy and money, which are universally applicable to Chinese textile dyeing and finishing mills，as well as input and output ratios.
The manual does not recommend expensive equipment or a systematic overhaul, but rather emphasizes “improving measurement systems,” “leakage checking and preventative maintenance,” “steam traps maintenance,” “insulation of pipelines and valves,” “condensate/cooling water reuse,” “heat recovery,” “compressed air system optimization” and other easy measures for enhanced energy efficiency in the production process. Since 2006, NRDC RSI has collaborated with the Jiangsu Academy of Environmental Sciences to set up an expert team for process control, pollution reduction and energy auditing. Over the course of three years, through dozens of mill visits and the in-depth analysis of several others, the RSI team selected this set of best practices with regard to environmental protection as a stepping-stone towards altering the mills’ mindsets and elevating their performance. “At little or no cost, we can improve the efficiency of the dyeing and finishing process, as well as energy and resource efficiency to significantly ramp up environmental performance. The benefits of energy saving are great enough to repay the efficiency investment within a period of only a few months.” Cindy Lin, an NRDC Associate, encouraged enterprise delegates to adopt these efficiency measures by emphasizing their economic benefits. By the end of the kick-off ceremony, almost ten enterprises registered for the RSI project.
Obtaining the commitment of multinational buyers and the Changshu government, the cooperation of the Ministry of Environmental Protection, the experts’ pro bono consulting, and the easy and effective “Ten Best Practices,” it is, perhaps, surprising to find that the driving force behind the mobilization of so many resources, completion of design projects, handling of on-the-ground work and launching of the “China Station” for green trade of global textiles, came from an NGO which is not even remotely related to the textile industry–NRDC.
NRDC, low-key but professional
“The well-known non-governmental organization (NGO) Greenpeace popularized the image of NGOs as fearless and passionate in the eyes of the Chinese populace. The NRDC, however, is somewhat different,” Qian Jingjing, NRDC’s Country Director joked. “Our tendency is to focus more on the technical side of environmental protection. NRDC was established more than 40 years ago. It is a non-governmental, non-profit organization and all of NRDC’s projects are funded by donations. NRDC employs more than 400 staff attorneys and scientists and is one of the most influential and effective environmental organizations in the US. NRDC was instrumental in the success of the Clean Water Act; Clean Air Act; National Energy Code for Home Appliances; the first piece of state-level global warming legislation in the US; and many other pieces of environmental legislation. It also partakes actively in policy advocacy and development.”
Due to the environmental conflicts brought about by rapid economic growth, developing countries have taken center stage in NRDC’s global vision. In 1995, NRDC entered China, working in the fields of green buildings and industrial energy efficiency. At present, due to NRDC’s expertise and proven effectiveness in China, the Ministries of Housing and Urban-Rural Development have begun working with NRDC to develop green building code. In terms of industrial energy efficiency, the concept and model of Demand-side Management (DSM) in the power sector, which NRDC brought into China, has been supported and promoted by the National Development and Reform Commission. The first collaboration between NRDC and Jiangsu began with a DSM project and Jiangsu, as a result, has become a forerunner in establishing DSM in China. Two years ago, NRDC started its environmental law project. Taking into account China’s many environmental standards and the lack of detailed rules on the enforcement of regulations, NRDC works with the Ministry of Environmental Protection to provide technical support for the drafting and revision of the Air Pollution Prevention and Control Law and Environmental Protection Law. Moving ahead, in 2010, NRDC is also ready to work on the sustainable development of cities. It hopes to entice city planners to, in the midst of rapid urbanization, take factors such as living conditions, walkability, and neighborhoods into account in urban planning, making sure to create more compact, smarter-growing cities.
NRDC’s marriage with China’s textile industry is an inevitable result of their constant focus on China’s environment. However, NRDC’s cooperation with the textile industry in Changshu, Jiangsu Province, sprang from the notion of good governance and the compatibility of two doctors.
Stepping into China’s textile industry
In the early spring of 2006, Dr. Linda Greer, the NRDC Health Program Director, was preparing to receive a special group of visiting scholars sent to the US by the Chinese Ministry of Environmental Protection. While preparing project background materials, Linda noticed that there was a doctor named Wang Hua from Jiangsu’s Environmental Protection Bureau. Linda is no stranger to Jiangsu. “We call it China’s California. It has a developed economy and is a leader in environmental protection.” The Demand-side Management project being rolled out in China at present originated in Jiangsu under the support of Jiangsu’s Economic and Trade Committee. In 1998, NRDC introduced, via the World Bank, the Green Watch Project, disclosing annually the ranking of enterprises’ environmental performance. At that time, two provinces were selected as pilot sites, and only Jiangsu stuck with it. Linda had many stories and good memories that she wanted to share with Wang Hua.
As Wang Hua, the capable and enthusiastic doctor later recalled, “my meeting with Linda feels more like destiny. In our first meeting, Linda mentioned a project that NRDC conducted in Jiangsu and, surprisingly, the two Chinese people in charge of this project were actually professors I know, so we had found our common ground.” These two doctors’ conversation apparently was not confined to their mutual friends. When they realized that their expertise and thinking were very similar, Linda mentioned that she hoped to design a few environmental projects in Jiangsu. “What she was interested in was exactly what I was thinking about. One month later, Linda returned the visit. From that point, we established a cooperation mechanism and worked together for about three years straight. As a result, the Responsible Sourcing Initiative (RSI) came into being,” recalled Dr. Wang.
Soon after these two doctors met, Wal-Mart Headquarters in the US made a request of NRDC for consulting regarding the sustainable development of enterprises, hoping that NRDC could offer its expert opinion on multinationals’ sourcing. Wal-Mart provided NRDC with a list of their suppliers in Jiangsu and other areas. Upon detailed analysis, Linda and Wang Hua began to notice the textile dyeing and finishing enterprises. “RSI can begin with this industry.”
“We spent a lot of time visiting textile companies in Guangdong and Jiangsu and found that many enterprises needed to change their attitude towards environmental protection and energy efficiency in manufacturing. Regardless of the fact that we were offering to provide help free of charge, many found it difficult to accept changes in their manufacturing and management models.” Doctor Wang believed that the biggest challenge for this project lay in changing the mindset of these enterprises. “In the end, the project instead became rooted in Changshu, the most economically advanced city with the best environmental performance. You could say that this was because the Changshu municipal government and textile enterprises had a higher awareness of the need for environmental protection.”
Redbud’s profound transformation
In the early stages of this project, NRDC, with the help of the Jiangsu Provincial Academy of Environmental Science, where Wang Hua had once worked, cooperated with the Redbud Company and Golden Morning Company to carry out environmental performance and energy audits. These two enterprises became the implementers of RSI. They gained the full recognition of multinationals like Wal-Mart and were placed on the multinational green sourcing priority list. This move drew the attention of Hui Jianlin, the Mayor of Changshu.
On Wal-Mart’s suppliers list, Redbud is identified as a jute and cotton products manufacturer. Over the course of eight years, the company planted jute in alkaline land and wasteland to help farmers lift themselves out of poverty and successfully utilize the jute in household goods and garments. However, on the five-tier public environmental assessment scale, Redbud was consistently labeled red. In environmental data disclosure, each enterprise’s environmental performance is indicated with a color. Green represents the best, blue is excellent, yellow is a warning—indicating excessive emissions, red means more serious and black, a severe violation. Wal-Mart’s textile team approached Liu Guozhong, the Chairman of Redbud, and expressed their concern over the factory’s record of pollution and its hope to see an improvement. Through research and communication, Redbud decided to join RSI. The team of experts assembled by NRDC and the Academy of Environmental Science implemented just three out of RSI’s suggested Ten Best Practices, but realized savings of 23% and 11% of water and coal use respectively. The total one-time cost of these three measures was around 72,000 US dollars and the payback period was just more than one month. The improvement effort plus an upgrade of the wastewater treatment process improved Redbud’s environmental performance. In the performance ranking, Redbud eventually rose to No. 2 with a blue label.
In December of 2009, at the invitation of the UN, Liu Guozhong, the Chairman of Redbud, attended the Energy Development Expo held at the headquarters of the World Bank in Washington D.C. At the exhibition, he explained to international organizations and multinationals the notion of poverty alleviation through Redbud’s products and jute planting. This model grabbed the attention of the UN South-South Energy Cooperation Bureau. Mayor Hui and people from the Bureau convened a seminar on disseminating Redbud’s products and green poverty alleviation. This was unprecedented in the UN’s history and, because of this, Redbud became one of the UN’s suppliers. At this meeting, out of recognition for Linda and NRDC’s professional environmental work, an acknowledgement of RSI’s success, and a sense of responsibility to facilitate the Changshu textile industry’s integration into the global green supply chain, Mayor Hui extended a formal invitation to Linda Greer, who had brought about significant changes in several Chinese enterprises. He invited NRDC to help shape Changshu into the Textile Industry’s Best Practice City.
Changshu will be another starting point
Changshu is an ancient city, boasting a history of 3000 years. It is also a city of gardens where mountains and rivers create an integrated whole. Changshu, home to 1.06 million residents, has been awarded the title of “National Environmental Role Model,” “National Garden City,” “National Eco-city,” and “International Garden City.” According to the Changshu Environmental Protection Bureau, the Changshu textile industry has invested more than 200 million RMB in pollution treatment over the past two years and implemented special emissions standards for the Taihu basin. “When compared with household and agricultural pollution, industrial pollution has been much lower than it was in past years. For environmental protection, however, the lower the absolute emissions, the better. The wastewater from each industrial enterprise goes into the underground pipeline system for monitoring and complete treatment. In recent years, NRDC has been committed to bringing in and experimenting with new notions and measures for environmental management. Its efforts have brought inspiration to China’s environmental management mechanism and measures innovation. RSI marks yet another active exploration of environmental protection through the cooperation of government, business and society. RSI presents a great model featuring energy savings and emissions reductions in the production process. This has further lowered the emissions volume of industrial enterprises. The RSI platform can also create opportunities for Changshu textile enterprises to promote themselves to international buyers–something the government values.”
Some people hold higher expectations still for the RSI program that has been developed in Changshu. In 2009, Changshu was home to more than 700 textile companies with total sales revenue of more than 60 billion RMB and total exports of almost 2 billion US dollars. “China is a major producer and exporter of textile products and, at the same time, dyeing and finishing is a heavily-polluting industry. Changshu, being the city of textiles, is under huge pressure with regard to environmental protection. Particularly as the international market has raised its environmental requirements for textile products, Changshu has faced huge challenges. The RSI project that was developed by Changshu and NRDC has been an extremely important player — in Changshu and China as a whole — in enhancing environmental management, lowering pollutant emissions, increasing resource utilization efficiency and exploring the sustainable development of the textile industry.” Wu Ruiming, the Director of the International Cooperation Center of the Ministry of Environmental Protection indicated that the Center will follow closely the actions and results of this project, providing support in terms of policy consulting, information dissemination, technical roll-out, etc. It hopes that more businesses—not only those in Changshu—will actively dedicate themselves to this environmental undertaking.
Starting from Changshu, NRDC has entered China’s textile industry and the manufacturing frontline of China’s dyeing and finishing mills. It has become the external force in advancing energy efficiency and environmental protection in China’s textile industry. However, it is very likely that in the future, NRDC will become the cause’s most profound force.
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