Climate change is a hot topic these days. When we travel by plane we can choose to offset our “carbon footprint”. When we buy groceries we are encouraged to buy locally produced food to reduce our “food miles”. Environmental issues are finding their way into factory audits and collaborative partnerships in supply chain management. Fair Factories Clearinghouse (FFC) spoke with Nicole Bassett, Corporate Social Responsibility, at Patagonia, and Collen Von Hadden, Code of Conduct Senior Manager at The Timberland Company (Timberland) to see how these FFC member companies are integrating environmental monitoring into supply chain management.[1]
Environmental Provisions in Factory Audits and Compliance Programs
Patagonia and Timberland are incorporating environmental concerns into their factory audit and compliance programs. Reducing energy consumption in factories is the current focus of Patagonia and Timberland’s environmental monitoring strategies.
Patagonia began to integrate environmental issues into its factory audits in 2007. Bassett explains the company wanted to get a baseline of where each factory was at on resource consumption and waste generation. Bassett explains that Patagonia’s environmental monitoring strategy is new and limited by Patagonia’s small company size, limited staff and resources, but it is moving toward incorporating more environmental provisions into its compliance program.
Timberland began to integrate environmental issues into its code of conduct and factory audits in 2005 after five years of fact-finding by Timberland’s internal auditing team. The process has led Timberland to create an “environmental scoring system” that assesses the factory in conjunction with the normal factory audit.[2] The system uses 7 criteria to establish an overall score reflecting the factory’s commitment to minimizing their environmental footprint. The seven criteria are: 1) systems, 2) compliance, 3) wastewater, 4) hazardous-materials, 5) water-based adhesives – footwear manufacturers only, 6) energy and 7) waste. Each criteria produces a score between 1 to 5 (5 being the best or most environmentally friendly) and represents a range of implementation towards better environmental compliance and reduced environmental footprint. Von Hadden emphasizes that environmental issues are tied to workplace safety and that improving a factory’s environmental score is about civic engagement.
Both companies are interested in educating its supply chain stakeholders that reducing energy consumption reduces operating expenditure and is good for both the environment and business. Timberland uses consultants to educate factory management that using less energy reduces expenditure. Von Hadden pointed out that the downturn economy is an opportunity to convince factories to implement energy reduction policies. Von Hadden stated, “it is easier to sell the savings the factory could earn if it reduces its energy use” (Von Hadden, 2009). Although, Bassett believes that in an economic downturn, the core social issues of factory working conditions such as wages and labor rights takes priority over implementing new environment policies and practices.
Different Products Require Different Environmental Provisions
Environmental practices vary from factory to factory depending on what type of product is being manufactured. Bassett explains that most of Patagonia’s products require “cut and sew” factories where environmental hazards have been less of an issue than at raw material developers or mills. At raw material developers and mills, Patagonia has partnered with a consultative firm to advise on environmental issues in the manufacturing process. Bassett explains that the consultation advises mill management on alternative processes that eliminate chemicals and increase water and energy efficiency. The consultation also demonstrates how improving the manufacturing process will reduce resource use and decrease factory operating costs. Bassett points out that the process is time consuming and expensive for factories as it’s the factories who have to pay for the consultation.
Timberland deals with tanneries differently than those factories that only manufacture clothing. Leather manufacturing is chemical intensive and Timberland has sought out collaborative relationships to develop better policies and practices in this area. Timberland is part of a “leather working group” that cooperates through membership in the British Leather Group. The working group established separate procedures and restrictions to address issues that are unique to leather manufacturing.
Collaborative Partnerships
Both companies cultivate collaborative partnerships to improve environmental monitoring in supply chain practices. Patagonia and Timberland are working with the Outdoor Industry Association (OIA) to create a benchmark system that will standardize environmental monitoring practices with the vision that other outdoor brands will find the system easy to implement and create an industry standard. Von Hadden offers that choosing which elements of the supply chain to populate the benchmark is currently in negotiation,” but adds, “the factory audit is an integral component to environmental monitoring and will be included as part of the benchmark”.
Both Patagonia and Timberland are members of FFC and use the FFC software to manage its factory audits, develop factory self-assessments and build collaborative partnerships. Through the FFC, both Patagonia and Timberland are part of a supplier-led collaboration on joint audits between several companies that share the same factory. The companies agreed to a “highest standard” principle so where one company’s audit has high standards in environmental monitoring, those questions will be used, a process that raises standards for companies and factories involved. Patagonia explains that brand collaboration is important because “as more brands become vocal about their social responsibility efforts, suppliers become more aware that social responsibility is a part of doing business. Consistent messaging from all brands builds momentum for social responsibility”.[3]
There is no “one size fits all” approach to environmental monitoring. Patagonia and Timberland have sought out ways to incorporate environmental concerns into factory audits in their own business operations. Working collaboratively with other companies, they are improving environmental monitoring in supply chain management and creating industry standards.
