Big Companies Step Up Efforts to Trim Environmental Risks in Supply Chains

Multinational corporations say they are increasingly taking on a regulatory role in their supply chains to improve performance on environment, health and safety (EHS) issues, especially in developing countries where government oversight can be weak.
Photographer: Nelson Ching/Bloomberg

Bloomberg BNA — Multinational corporations say they are increasingly taking on a regulatory role in their supply chains to improve performance on environment, health and safety (EHS) issues, especially in developing countries where government oversight can be weak.

Although EHS regulations are strong in some developing countries, including China, they can be difficult to enforce, as governments struggle to keep up with growth in manufacturing.

Multinational corporations have traditionally conducted facility audits to make sure their supply chains are complying with local regulations and their own supplier standards. But many facilities lack the technical skills and management expertise to meet those standards.

To fill the gap in local expertise, General Electric, Wal-Mart Stores Inc. and Hewlett-Packard Co. are providing more training and education programs to help suppliers learn how to manage a range of EHS issues, from energy and water use to fire safety, company officials told Bloomberg BNA. They said the companies are also implementing new tools to track their suppliers’ performance.

‘Find It and Fix It.’

GE, which produces appliances, lighting, power systems and other products, has focused its supply chain auditing on countries where government enforcement is weak, according to Ann Condon, who leads efficiency, stewardship and product environmental compliance programs across GE’s global supply chain.

“A long time ago, we concluded that there were specific countries where suppliers’ performance was often not good,” including China, India and a few other countries, Condon told Bloomberg BNA.

China accounted for about 40 percent of GE’s supplier assessments in 2012 and 56 percent of “findings,” which occur when auditors note issues at a facility, such as a missing permit.

But the auditing program wasn’t generating long-term improvement in most suppliers, Condon said. So in 2011, GE added a requirement for suppliers to move from a “find-it-and-fix-it mode to more of a management-system mode,” she said.

Using a new key performance indicators (KPI) tool introduced in 2012, GE now compiles a scorecard for suppliers on how well they’re managing issues related to the environment, health, safety, labor rights, security and human rights.

For example, Condon said one of the key indicators is whether a facility has a well-trained environmental specialist. The supplier could receive a score from zero to five, depending on the environmental expert’s level of training.

There are also questions on water and energy use built into the KPI tool.

“Right now, we’re asking some fairly simple questions on that front,” such as whether suppliers know what their energy use is or whether they have an approach for measuring or reducing their energy use, Condon said.

GE doesn’t have enough data yet to show how well the KPI tool is working, but it has seen that suppliers who score better on their management systems tend to have fewer audit findings and less severe findings, which means GE can audit them less often, Condon said.

“It was kind of an ‘aha’ moment,” she said.

Collaborating on EHS Training

To help suppliers build these EHS management systems, GE has partnered with local and international nongovernmental organizations (NGOs) on training and education programs.

“GE is not alone in working with suppliers with significant environmental, health, social, human rights and security issues,” the company says on its website. “We long ago realized that these challenges, especially in some of the fastest-growing economies, were bigger than what one organization-even one as big as GE – could address alone.”

GE was one of several founding partners of the Environment, Health and Safety Academy launched in 2009 in China’s Guangdong Province, which is known as the “factory to the world.”

The academy is part of a public-private partnership led by the Institute for Sustainable Communities (ISC), based in Vermont.

The academy works with local universities and other organizations to provide training in essential skills for EHS management, including labor practices, and in sustainability leadership, through courses on greenhouse gas emissions, energy efficiency, water resources and related topics.

GE, Pfizer, Honeywell, Wal-Mart and other multinational companies have provided training materials for the academy, which teaches a combination of local regulatory requirements and international best practices.

“This really is an area where collaboration gives us a whole lot more,” Condon said.

Creating a ‘Cultural Shift.’

The academy seeks to improve policy implementation and strengthen its impact by significantly expanding the pool of qualified EHS managers in China, ISC President George Hamilton told Bloomberg BNA.

Before the academy was established, GE and other corporate partners involved in the academy wanted to get to the “root cause” of persistent problems appearing in factory audits, Hamilton said. They agreed that one of the major factors that defines success in a factory audit is “a factory manager that gets it,” he said.

So the academy focuses on preparing managers to prevent EHS issues from arising, rather than just reacting to them, which is often what happens after facility audits or assessments conducted by companies.

“People have to get on board to create a cultural shift within a factory towards more sustainable management of EHS factors,” Hamilton said. “It’s not the line workers or the owners, but the managers in between, because we think they’ll have the most ability to get the job done.”

Hundreds of global companies have sent their EHS managers and suppliers to be trained in ISC’s program in China.

More than 88 percent of those trained say they’ve made positive changes in their EHS practices, including improvements in wastewater treatment, energy efficiency and injury rates, and the establishment of a routine and transparent system for reporting EHS problems, ISC said.

Chinese regulators have also gotten involved as students or guest lecturers and through model audits, said Matthew DeGroot, ISC’s Asia program director.

“We work with a lot of regulators all the time, and they’re very appreciative of the program because the capacity for enforcement is weak,” DeGroot told Bloomberg BNA. “Some of these industries in China haven’t even been around for more than 20 years at the most, so regulators are often catching up to where industry already is.”

Sustainable Working Conditions
Since the 2009 establishment of the academy in Guangdong, the ISC has launched similar academies in Jiangsu, China, as well as in Bangladesh and most recently in India.

Wal-Mart was a founding partner of the Bangladesh academy, which will focus on fire safety and building safety training in the wake of the catastrophic Dhaka garment factory collapse in April 2013, which killed more than 1,100 workers. The company is collaborating with ISC on curriculum development and encouraging its suppliers to participate in the program.

“Our objective is to train factory management and workers, so that improvements in working conditions are sustainable,” a spokeswoman for Wal-Mart told Bloomberg BNA in an email.

“This applies for environmental, social, and safety factors.”

Safety is one of several factors Wal-Mart considers as part of its ethical supply chain strategy.

The company has also made supply chain sustainability a priority through a partnership with a nonprofit coalition called the Sustainability Consortium.

The consortium, led by the University of Arkansas and Arizona State University, is providing research for a Sustainability Index that Wal-Mart uses to track the environmental impacts of products suppliers make.

“Engaging the supply chain is critical,” Jack Sinclair, executive vice president of food for Wal-Mart U.S., said Jan. 29 at an event organized by the National Council on Science and the Environment. “We can’t do this alone. We even have to engage with our competitors.”

The index scores suppliers based on the sustainability of their products. The scores then feed into decisions on which products are purchased from suppliers for retail sale in Wal-Mart stores.

Since its launch in 2009, the Sustainability Index has been rolled out across 700 product categories and to 5,000 suppliers, according to Sinclair. It is currently used only by buyers in the U.S., but Wal-Mart plans to expand the index to stores in South Africa, Chile, Mexico and China.

The company has committed to buying 70 percent of goods sold in Wal-Mart and Sam’s Club locations in the U.S. from global suppliers who use the index by the end of 2017.

Based on data gathered through the index, Wal-Mart has been working with suppliers, nonprofits, industry experts and government to address “hot spots” across its supply chain.

Sinclair said these hot spots are “areas that, when addressed, could have an exponential impact.”

Filling Regulatory Vacuum
One such hot spot is greenhouse gas emissions from fertilizer used in farming.

Fertilizer use accounts for almost half of Wal-Mart’s supply chain emissions, said Elizabeth Sturcken, who leads the Environmental Defense Fund’s partnership with Wal-Mart on green supply chains.

“It’s surprising, but not so surprising when you think that Wal-Mart is the biggest food supplier in the U.S.,” Sturcken told Bloomberg BNA.

Sinclair said the majority of fertilizer is lost due to runoff or leaching.

Wal-Mart and EDF are working with farmers in 18 U.S. states, as well as Central America and South America, to optimize fertilizer usage, which saves money for farmers while reducing greenhouse gas emissions and water quality impacts.

“This is an area where there’s been no regulatory action, where Wal-Mart in effect becomes a new standard in saying that they want fertilizer optimized,” Sturcken said.

She said Wal-Mart has also filled a “vacuum” in U.S. regulation for chemical-intensive products. The company is asking suppliers to move away from about 10 chemicals of concern and transition toward greener alternatives in home and personal care products.

“When Wal-Mart acts in a big way across multiple product categories,” like fertilizer or chemicals, “it is really taking a leadership role and becoming a de facto regulatory entity in a lot of ways,” Sturcken said.

Encouraging Supplier ‘Ownership.’
Hewlett-Packard, which sells imaging and printing systems, computing systems and information technology services worldwide, recently adopted a similar scorecard system for measuring suppliers’ social and environmental responsibility (SER).

HP has been working with its suppliers on SER issues for more than a decade. The company assesses social and environmental risks in its supply chain based on location, procurement category, company information and external stakeholder reports, including a pollution database run by the nonprofit Institute of Public & Environmental Affairs in China.

HP’s supply chain program has traditionally focused on audits, but that approach “has not necessarily encouraged a sense of ownership by suppliers of SER performance,” HP said in a report on its approach to supply chain responsibility.

In 2013, the company began trying to encourage more ownership of SER issues by requiring suppliers to schedule and pay for third-party audits and remediation efforts on a regular basis. HP also introduced a five-tier SER rating system that draws on the results of those audits and other SER performance indicators.

Suppliers that receive higher scores on the SER scorecard will receive more business from HP, while poor ratings could results in a reduction of business.

Supply Chain Emissions Goal
Greenhouse gas emissions, which are one of the environmental indicators considered in the scorecard, have been identified by HP as one of five persistent SER issues in the supply chain that require extra attention and investment.

The company is also starting to place a stronger emphasis on improving environmental performance in other areas, including reducing waste and water use in its supply chain.

In September, HP became the first company in the IT industry to set an emissions reduction goal for its supply chain.

By 2020, HP’s goal is to drive a 20 percent reduction in first-tier manufacturing and product transportation-related GHG emissions intensity among suppliers, compared with 2010. HP calculates intensity by dividing suppliers’ emissions by HP’s annual revenue.

Since the goal was announced, HP has been educating its suppliers about the goal and the company’s expectations for how to reach it, starting with China and Southeast Asia, according to Zoe McMahon, HP’s director of global social and environmental responsibility.

“An important thing about the goal from our perspective is it’s not something we’re putting out there and letting our suppliers abide by,” McMahon told Bloomberg BNA.

Suppliers also need to understand what good emissions management looks like, she said.

HP has laid out a series of first steps for helping suppliers meet the emissions goal, including an expansion of its energy efficiency program for manufacturers. HP works with the groups Business for Social Responsibility (BSR) and World Wide Fund for Nature (WWF) to develop energy efficiency programs at supplier factories in Asia.

The company will also develop new efficiency programs for product transportation and suggest emissions reductions projects for suppliers that have especially GHG-intensive operations, such as LCD panel manufacturers.

Driving Industry Alignment
HP’s supply chain emissions reduction goal does not include supplier- or country-specific targets, but the goal was set to be consistent with the emissions reduction target included in China’s most recent five-year plan, McMahon said.

“It’s about complementing the regulatory regime” in countries like China that have targets, or being a bit more aggressive in countries that don’t have targets, she said.

While local regulations for greenhouse gas emissions and other environmental impacts have a role to play in supplier oversight, McMahon said harmonized approaches from industry can have more impact.

“What’s interesting about environmental standards is that, unlike labor standards, where you have often contested but at least internationally agreed upon standards, you don’t have internationally agreed upon environmental limits or standards,” McMahon said. For environmental impacts, there’s a range of policies around the world and a range of enforcement, she said.

“What’s more helpful for us as a company is to work with what we consider best practice,” she said.

HP is currently working with other businesses in the Electronic Industry Citizenship Coalition (EICC) to develop an industry standard for reporting on suppliers’ greenhouse gas emissions.

McMahon said she hopes to drive more industry alignment on the issue because many of HP’s suppliers are common to other electronic or IT companies.

“We’re not just influencing our suppliers,” she said. “We’re influencing the whole ecosystem of supplier.”

Source: Bloomberg Sustainability

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Green Living Guy TV Segment on Sustainable Food

When it comes to food we really don’t talk about “Life cycle assessments”. Yet they can bring better farming techniques and animal awareness to farmers and those who regularly work with the meat industry. Collaborating with farmers and adjusting the way that they are paid will end up bringing much larger improvements into the food handling industry itself, starting at the source.

Below is my segment with NYC Media on Sustainable Food. We touch a lot of the things listed about the life cycle assessment and other things too!

I really also suggest to check out the Union Square Farmers Market! The most amazing food you’ve ever tasted  For real!

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Hope you enjoy the segment and also I gave an infographic on the other ways to make food more sustainable (besides composing which we talk about in the video below!).

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Ways to Green the Food Supply Chain

With energy efficiency on everyone’s mind in the last few years, experts are looking into ways to make the general food chain more ecologically conscious as well Converting farm waste into energy is one of the most efficient ways to reduce our carbon footprint, while earning additional income as well. It was reported that the process of converting waste into energy or farm fuel can end up generating as much as twenty eight billion dollars in 2016. This is a significant increase from eighteen billion dollars in 2012.

Additionally, advancements made in logistic technology can make it much easier to transport food while reducing the environmental impact of such operations. Refrigerated boxcars can hold upwards of four truckloads, while reducing all of the harmful emissions that the same number of trucks would end up producing. These railways will be able to move all across the country while utilizing green technology. 

Life cycle assessments can bring better farming techniques and animal awareness to farmers and those who regularly work with the meat industry. Collaborating with farmers and adjusting the way that they are paid will end up bringing much larger improvements into the food handling industry itself, starting at the source.

There are numerous ways that suppliers can make their practices greener as well. Major corporations can work with scorecards to see their carbon emissions and adjust them in order for their practices to become greener and healthier for the planet.

To learn more about the many ways we can create a more sustainable and eco-friendly food supply chain, checkout this infographic below created by Marylhurst University’s Online MBA in Sustainable Business program.

Green_MBA_Ways to Green the Food Supply Chain

Marylhurst University Online

5 Terrible Things That Happen When You Don’t Recycle

According to the Environmental Protection Agency, America produces over 258 million tons of waste every year ― which is close to a ton of trash per American citizen. The EPA believes as much as 75 percent of that waste to be recyclable or reusable, but instead of properly disposing of unwanted goods, many Americans choose to carelessly toss anything and everything into the garbage can. The results of this behavior are quickly becoming disastrous, impacting not only natural environments but also urban areas and human livelihoods. Here are a few ways failing to recycle negatively impacts the world around us.

1. Landfill Growth
Nearly all of America’s trash goes into landfills, which are essentially gigantic midden heaps that are eventually covered with soil and potentially used for urban development. The positive idea behind landfills is that trash will eventually decompose and settle, turning into fertile land. The problem is that much of our waste is not biodegradable; plastics require between 10 and 1,000 years to begin breaking down, and even then, the chemicals used in them can leach into groundwater and destroy surrounding environments.


2. Marine Pollution

Not all garbage is safely tucked into a landfill. At least 10 percent of all plastics created have found their way into the oceans, creating enormous gyres where the non-biodegradable waste is more plentiful than plankton. Most of the pollution comes from poor waste management on land, but some is dumped by unscrupulous ocean liners. The plastics wreak havoc on marine environments, as animals ingest or become entangled in the waste.

3. Incineration

For many, burning trash seems a viable solution to land and water pollution. However, incineration might be even more disastrous than landfills. For one, many products and packaging materials are made using toxic chemicals that are released into the air during the burning process. For another, glass as well as many plastics do not burn except at exceedingly high temperatures, which requires excessive amounts of fuel ― which itself releases dangerous emissions. Studies have found that air pollution causes all sorts of terrible diseases, from chronic asthma and cancer to birth defects.

4. Resource Waste

It isn’t just the items or materials themselves that are wasted when you throw something away; all the effort and energy used to create those items are also squandered. Between 2.5 and 4 percent of U.S. energy consumption is devoted to the manufacturing of plastic and plastic products; what’s more, at least 24 gallons of water is used to create just one pound of plastic, and about 2.5 million plastic bottles are produced every hour. Those resources could be diverted to more beneficial endeavors if everyone recycled more.

5. Economic Trouble

Though it might seem an economic advantage to create disposable goods that must be repurchased, pollution actually hinders economic advancement in notable ways. For example, many beaches experience lower tourism because the sand and water is covered in trash; fishing and shipping industries have reportedly suffered losses of $365 million and $279 million thanks to debris-clogged waterways. Less trash is almost synonymous with more profit for much of the economy.

How to Reduce Trash the Right Way

Though some waste is inevitable, it is possible to drastically reduce the amount of trash you personally produce. For example, one woman committed to a minimal-plastic lifestyle and managed to produce less than 16 ounces of waste over a two-year period. Not everyone has the luxury of avoiding plastic and packaging so thoroughly, but there are a number of effective ways you can increase your recycling efforts.

• First, you should strive to reduce the amount of purchases you make. This doesn’t necessarily mean becoming minimalist; instead, you should merely consider investing in a few well-designed and manufactured products rather than many cheap and disposable ones.

• Next, you should research what objects around your home can be reused. In fact, most things can find new life, and many charities gladly pick up or take in items you don’t want to sell. Some of these items will directly improve the lives of the needy, but others, especially valuables like digital devices on up to larger items like broken-down cars or boats, can be refurbished and sold for funds to benefit charities.

• Finally, you should learn more about recycling services in your area. Not all cities have the resources to recycle all types of materials. Instead of tossing any paper, plastic, or glass good in the recycling bin, you might need to find facilities designed to recycle specific goods. Items that are improperly recycled are likely to end up as pollution.

The E-Waste Problem and How to Help created by Digital Doc

Reducing Your Carbon Footprint in 8 Different Ways

Climate change is an issue that is hanging like a sword above all of our heads. The planet is suffering due to the rising level of carbon pollution. We must try to reduce our carbon footprint to reduce some pressure on the environment. Let us look at 8 ways to do so. 


Reduce your Driving

Ditch your car and walk or ride a bike whenever possible. Carpool to work or school and choose public transport as much as you can. Simple steps like that help in cutting down CO2 emissions significantly by spreading them out over many riders.


Reduce Water Usage 

You can reduce your water consumption by washing your car less often, installing drip irrigation to ensure that the plants receive only the amount they need and using climate-appropriate plants at your home. You must make water-efficient choices when you purchase bathroom and kitchen fixtures such as shower heads, dishwashers, faucet heats, etc. I 

Reuse and Recycle

When you make any product from scratch, you have to use a lot of energy on extracting resources, manufacturing them, packaging and transporting them. You can help in reducing the carbon footprint by using recycled products and reusing goods such as plastic bottles and glass containers


Use Alternative Sources of Energy

You can reduce your consumption of fossil fuels by using alternative sources of energy. Use wind, hydro, solar and geothermal energy and try to advocate about the same.


Light Up Differently 

Switch your light bulbs at home with light emitting diodes (LED). One LED helps in reducing up to 2000 pounds of carbon dioxide pollution during its lifetime. Therefore, by switching every light bulb with them you can drastically reduce the amount of electricity required to light up your house. Imagine what would happen if every house in the country did that!

Read the News Thoughtfully

There has been an ongoing debate of whether consuming news digitally is actually better than its print cousin. It has been said that reading the news digitally helps in saving trees as you no longer have to cut them to make paper, however, at the same time it has been argued that even surfing the web expends various amounts of energy depending on the device being used. The best way to go about it is to be mindful of how you choose to get your news. If you prefer print, recycle your papers instead of throwing them out. If you like the digital medium, opt for an unplugged laptop instead of a plugged-in device for the majority of your browsing time.

Telecommute and Teleconference 

Telecommuting is the practice of doing work remotely using the internet instead of fighting against the traffic to do the same work in an office. More and more companies are encouraging their employees to telecommute as it is quite effective. Long gone are the days when companies would send their employees to long distances via flights just to attend one meeting. It’s a waste of time and burdens the environment with huge amounts of CO2. Cut down a few trips and teleconference instead. You can’t completely reduce your CO2 footprint through these practices, but as they say — something is better than nothing.  


Plant a tree

Sounds obvious, but it is still one of the most efficient ways to slashing your carbon footprint. Trees not only provide shade and oxygen but also consume carbon dioxide. According to Urban Forestry Network, a single young tree is responsible for absorbing 13 pounds of carbon dioxide every year. As the tree grows, this amount adds up to 48 pounds. A 10 year old tree releases enough oxygen to support two human beings. So, go ahead and plant more trees!

By making smart and informed decisions such like recycling waste will go a long way in making the planet a little greener. 

Author Bio 
Erich Lawson is passionate about saving environment by effective recycling. He has written a wide array of articles on how modern recycling equipments can be used by industries to reduce monthly garbage bills and increase recycling revenue. You can learn more about environment savings techniques by visiting Northern California Compactors, Inc blog