The paper, “Greening Supply Chains in China”, highlights examples of five companies operating in China and illustrates the approaches they have adopted to address environmental problems. The paper focuses on water pollution within China’s challenging business landscape.
“China-based suppliers can be effective and innovative in addressing their environmental impacts,” said Ma Jun, Director of Institute of Public and Environmental Affairs (IPE) and co-author of the report. “But to help these firms become responsible manufacturers, key stakeholders – especially buyers – need to demonstrate that sound environmental practices are valued.”
Many suppliers in China are now required to meet certain sustainability criteria by multinational buyers who have adopted “green supply chain” strategies. Firms that are unable to meet such environmental requirements may be restricted from doing business with their buyers. The impact of these “green supply chain” initiatives is likely to be particularly large on Chinese industry because of China’s role as “the world’s factory” and leading global exporter – accounting for much as 10 percent of the world’s total exports.
“Chinese suppliers must find ways to improve their environmental performance because it is increasingly crucial for the survival of their businesses,” said Ray Cheung, a consultant to World Resources Institute (WRI) and co-author of the report. “Firms that adopt best practices in sustainability will have a competitive advantage over companies that fail to minimize their impact on the environment.”
The report’s case studies detail management processes that the companies used to identify and implement environmental improvements in a transparent manner. One common feature of all five companies is that previous environmental violations led them to work with key stakeholders, such as non-governmental organizations (NGOs), government agencies and their buyers, to make improvements.
The environmental issues and industries highlighted in the report are:
- Industrial wastewater and energy consumption in the garment industry;
- Industrial wastewater and sanitary waste in the shoe industry;
- Industrial wastewater, biological and chemical waste in the consumer goods industry;
- Air pollution in the leather tannery; and
- Industrial wastewater, and solid and heavy metal waste in the electroplating industry.
The five companies were selected and reviewed by the independent Green Choice Alliance (GCA), a consortium of Chinese environmental experts and NGOs. The GCA represents local community members in an independent effort to assist multinational buyers in tracking the compliance records of their Chinese suppliers, and facilitating corrective actions and public disclosure.
“China’s drive to increase environmental transparency provides a unique opportunity to identify violations and misconduct in globalized manufacturing and supply chains,” said IPE’s Ma Jun. “It also sets the stage for more participatory environmental governance in which corporations collaborate with NGOs and communities to reduce pollution and promote long-term sustainable growth.”
Original Work:
Title of the Working Paper: “Greening Supply Chains in China: Practical Lessons from China-based Suppliers in Achieving Environmental Performance”
Authors: Ma Jun (IPE), Ray Cheung (WRI), Wang Jingjing (IPE), Ruan Qingyuan (IPE)
The paper is available on WRI’s website: here, and IPE’s website: here.
About WRI
The World Resources Institute is an environmental think tank that goes beyond research to find practical ways to protect the earth and improve people’s lives. Their mission is to move human society to live in ways that protect Earth’s environment for current and future generations. For more information, visit www.wri.org.
Source: WRI Press Release dated October 25, 2010.
