“I make my living off the evening news

Just give me somethin’, somethin’ I can use

People love it when you lose

they love dirty laundry”(Don Henley)

4953991560_e1d7ec2854_m.jpgI was reminded of that Don Henley (The Eagles) solo hit from back in the 1980’s when I read about Greenpeaces latest initiative and report…aptly  titled…you guessed it, “Dirty Laundry”.  The report focuses on the high  levels of industrial pollutants being released into China’s major  rivers like the Yangtze and the Pearl and commercial ties between a  number of international brands such as Adidas, Nike and Li-Ning with two  Chinese manufacturers responsible for releases of those hazardous  chemicals.  Greenpeace has also launched the challenge ‘Detox’ Campaign, calling “brands, especially Adidas and Nike, to take the initiative and use their influence on its supply chain.”  The organization unfurled its characteristic banners at Adidas’s main retail store in Beijing this week. There are several nuances to this story that are important to pass on  and collaborative opportunities (rather than the finger-pointing that  has plastered Twitter and other media the past 24 hours) to explore.

Supply Chain Challenges …Again!

This latest supply chain environmental wrinkle underscores the  challenges multi-national organizations (MNC) are facing daily in  oversight and enforcement of first tier, second tier or lower contract  manufacturers.  If it’s not Apple under the radar, its Nike, or Adidas,  or GE…who’s next?  Recent events concerning Apple Computers alleged lax supplier oversight and reported supplier human rights and environmental violations only  shows a microcosm of the depth of the challenges that suppliers face in  managing or influencing these issues on the ground.

To be fair, although the pollution is real and the threat of toxics  contamination very real, it’s possible that Greenpeace may be  sensationalizing Nikes and Adidas’s culpability.  In fact, neither  company directly is involved with the key manufacturers labeled in the  Greenpeace report.  The two manufacturers are the Youngor Textile  Complex in Ningbo, an area near Shanghai along the Yangtze River Delta,  and Well Dyeing Factory Ltd. in Zhongshan, China, along the Pearl  River.  The Younger Group is China’s biggest integrated textile firm.

“Game on, Nike and Adidas.  Greenpeace is calling you out to see which one of you is stronger  on the flats, quicker on the breaks, turns faster and plays harder at a  game we’re calling ‘Detox’,” “Whether you’re ‘All in’ with Adidas or  believe in the Nike motto to ‘Just do it,’ you can challenge the brand  you wear to win the race to a clean finish.” -Greenpeace DeTox campaign’s website.



Both Nike and Adidas admitted jointly that said their work at Youngor is limited to cut-and-sew production — not “wet processing” such as dyeing and fabric finishing that Greenpeace says is the cause of the chemical discharge.  Greenpeace did not hide behind that fact but made the point (perhaps rightly so) that “As brand owners, they are in the best position to influence the environmental impacts of production and to work together with their suppliers to eliminate the releases of all hazardous chemicals from the production process and their products”. I agree on the grounds that effective supply chain sustainability practices and corporate governance must be driven by the originating manufacturers that rely on deep tiers of suppliers and vendors for their products.

That being said, I think that to call out Nike and Adidas  specifically (along with other companies like Puma) is to suggest that  they are not doing the right thing as regards sustainability in the  apparel industry.  For instance, Nike has learned from its mistakes if the past (especially on the labor/human rights side of social responsibility)  and implemented aggressive governance frameworks and on the ground  oversight programs. Also, the  Nike Considered Index evaluates  solvents, waste, materials, garment treatments and innovation, and the  company has an internal working group constantly evaluating Restricted  Materials lists.

Kick ‘em when they’re up

Kick ‘em when they’re down

Kick ‘em when they’re up

Kick ‘em all around- (Don Henley)

Chinese Laws and Regulatory Oversight- Not in Sync

As I noted recently,  China is still in the “ramp-up” phases of economic development.  Plus  it’s been evident for some years that enforcement of environmental laws  and regulations by government agencies has not been on par with the  intent of the laws.  According to the report, samples taken from the  facilities contained heavy metals and alkylphenols and perfluorinated  chemicals, which are restricted in the United States and across the  European Union.  These chemicals have reproductive and hormone  disruptive effects Therein lies another institutional problem…the laws  in the home countries of the MNC’s are not in sync with those in the  host manufacturing country- in this case, China.

Writing yesterday in China Hearsay,  Beijing based lawyer Stan Abrams offered this up.  “This is a classic  law versus CSR problem. The law here in China allows for this activity,  yet the allegation is that this is a harmful activity. Should the  companies in question merely follow the law or “do the right thing” and  either sever ties with the polluter or pressure it to change its  behavior?”

It’s likely that (for the foreseeable future) Chinese political and  economic systems will remain focused on rapid development at all costs.  So it’s critical that local/in-country government policies be aligned as  well to support capacity-building for companies to self-evaluate, learn  effective auditing and root- cause evaluation, institute effective  corrective and preventive action programs and proactively implement  systems based environmental management systems (can you say ISO 14001?).

Multi-Sector Collaboration is the Answer

The apparel industry as a whole has taken a very proactive stance in  looking at ways to redesign sustainably, produce its goods taking a  cradle-to cradle perspective, and manage toxic chemical use and waste  streams so that human and environmental exposures are minimized.  The  multi-stakeholder Sustainable Apparel Coalition ironically includes Nike, the Gap Inc, H&M, Levi Strauss, Marks  & Spencer, and Patagonia (some of whom are also being targeted by  Greenpeace).  Over 30 companies have committed to collaborating in an  open source way to drive the apparel industry in developing improved  sustainability strategies and tools to measure and evaluate  sustainability performance.  In addition over 200 outdoor products  companies from around the world have been working together on  sustainability best practices and standards, called the Eco-Index, led by the Outdoor Industry Association and European Outdoor Group.

The most successful greening efforts in supply chains in “tiger  economies” are based on value creation, sharing of intelligence and  technological know-how, and support in developing environmental  regulatory frameworks that have the force of law. MNC’s and contract  manufacturers can collaboratively strengthen each other’s performance,  share cost of ownership and social license to operate and create  “reciprocal value”.  Greenpeace wants MNC’s to establish “  clear  company and supplier policies that commit their entire supply chain to  the shift from hazardous to safer chemicals, accompanied by a plan of  action that is matched with clear and realistic timelimes”.  Agreed with  that sentiment, but many hurdles remain to cross.

Youngor Textiles, Adidas and others cited in the report have not  hidden from the findings, and Youngor has committed to working jointly  with Greenpeace to find a workable solution to remove potentially  harmful toxics from the apparel manufacturing supply chain.  Solving  this problem on the ground will take a multi-stakeholder effort to 1)  balance contractual arrangements among many parties, 2) craft good law  and enforceable regulations, 3) drive clean chemistry, 4) redesign  production processes and use advanced manufacturing technology, and, 5)  develop, implement and maintain robust contactor monitoring.

I will be watching carefully to see how this collaborative effort  with an NGO giant and big business unfolds…er, should I say “unfurls”.