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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Electrolux takes action on sustainability and food, supporting UN Global Goals

Sets up Electrolux Food Foundation with initial SEK 10 million investment

Enters Feed the Planet partnership together with Worldchefs and AIESEC

The Electrolux Group announced actions to focus its social investments and community activities on food and related sustainability issues. The ambition is to contribute more in addressing major global challenges such as hunger, poor nutrition, food waste and responsible consumption, in support of the United Nations Sustainable Development Goals.

Electrolux takes action on sustainability and food, supporting UN Global GoalsAs a first step, the company is setting up the Electrolux Food Foundation, creating a long-term platform for funding initiatives in this area and engaging employees around the world. The initial investment is SEK 10 million. Electrolux is also joining forces with the global association of chefs, Worldchefs, and with AIESEC, the world’s largest youth-led network, in Feed the Planet – a key partnership that includes commitments to driving a number of food projects over the coming years.

Sets up Electrolux Food Foundation with initial SEK 10 million investment  Enters Feed the Planet partnership together with Worldchefs and AIESEC

“Feeding the world’s growing population in a sustainable way is one of the greatest challenges of our time. We believe Electrolux, as a world-leader in a kitchen appliances, has a responsibility and opportunity to contribute on issues related to cooking and food consumption,” said Jonas Samuelson, President and CEO. “We’ve had a global approach to the impact of our operations and products for many years. Now, we’re widening the scope of sustainability to address our role in society in a more focused way. By working together with Worldchefs and its 10 million associated chefs, we leverage our expertise, professional network and global organization to make the most of our contributions to local communities.”

The objectives are to inspire better food consumption and cooking habits among consumers and professionals, maximizing sustainable and healthy choices while contributing to a reduction of negative impacts. Other aspects are to support people in need – in putting better, more nutritious food on the table, providing advice on cooking on a tight budget, offering workplace education and supporting emergency relief efforts through Worldchefs without Borders.

The first initiative to be financed by the Electrolux Food Foundation will be the Feed the Planet partnership. Electrolux units can also apply for funding from the foundation to launch local projects supporting the objectives.
The first initiative to be financed by the Electrolux Food Foundation will be the Feed the Planet partnership. Electrolux units can also apply for funding from the foundation to launch local projects supporting the objectives.

Given the status and role of chefs today, Worldchefs is uniquely positioned to set the agenda and convey important messages about the need for healthy food and sustainable cooking. AIESEC, which is promoting and driving youth participation in the implementation of the UN sustainable development goals, will provide volunteers to help manage projects on the ground.

Charles M. Carroll, President of Worldchefs, said:
“I believe this project is going to change global sustainability as it relates to the hospitality field. Our main focuses are sustainability education and awareness campaigns towards both consumers and professionals, and alleviating poverty through skills development and humanitarian relief. Electrolux is considered the sustainability leader in the kitchen appliance industry and in partnering with them, I believe we can make an impact in these areas and focus in on how they affect our planet.”

Electrolux sustainability framework, For the Better, includes nine promises to work for better solutions, better operations and a better society. By implementing a Group-wide approach to social investment, Electrolux is seeking to fulfil its promise “Be a Force for Good” in a way that is also aligned with the UN Sustainable Development Goals. More specifically, Electrolux hopes to have a positive impact on the goals Zero Hunger (#2) and Responsible consumption and production (#12). Food is also a major factor in climate change, meaning this focus area ties well into Electrolux goal to halve its carbon emissions by 2020.
Sources: www.electroluxgroup.com/forthebetterwww.worldchefs.orghttp://aiesec.org/http://news.cision.comwww.electroluxgroup.com

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Verterra Makes a Plate Like No Other..From Fallen Leaves and Are Biodegradeable!!

Recently Verterra dinnerware company and I got to talking about how their product did not seem like any ordinary disposable plate.  I really wanted to learn more about this company.  I mean if they are using strong durable disposable plates and bowls and more that are totally eco friendly and natural.  To think that a simple way to green living can be to just change the types of disposable plates we use is fantastic.

Resized_2_2048x2048Verterra is biodegradable since it breaks down into mostly water, carbon dioxide, and organic compost in 6 months.

This product is also compostable.  This means it rapidly biodegrades and disintegrates.  This releases nutrients into the soil, without leaving behind any toxic residues.   To be considered compostable, products should meet the ASTM Standards for plastics and packaging.

After learning these terms I realized that this product is more than biodegradable.  According to all the studies they did on the product to meet certain standards, it was determined that a mixture of compost and VerTerra byproducts act as a fertilizer.  This will enhance plant growth signicantly.

Not only did they say that VerTerra

Some great food on Verterra plates. Not a bad looking plate for a party; right acts as a compost, but it also makes high-quality compost. 

These 8 packs are located at Whole Foods stores and can go from $3.99 – $6.99 depending on the product.  Now while it might not be for you just yet, the These 8 packs are located at Whole Foods stores and can go from $3.99 – $6.99 depending on the product.  Now while it might not be for you just yet, the Dallas Cowboys use them (WHY NOT THE NY GIANTS?), schools, restaurants, hospitals, food service agencies and more are catching on.  This in my opinion will bring down the price in the future based on quantities.  However, to think I can serve a party and get great compost for $7.00 at the most; not bad.

New American Vision® Solar PPA Gives You a 469 Percent ROI on Solar Power For Your Home Zero Down!

Think installing solar panels onto your home is an upfront cost out of your reach?

American Vision® Solar is helping homeowners across the country see solar energy in a new light, and learn that taking advantage of solar power is affordable, and provides an incredible return on investment. Thanks to the company’s new Power Purchase Agreement, anyone who qualifies can start saving on monthly utility bills immediately, with little to no money down.

American Vision is calling ‘Solar as service’, and it’s through the company’s new Power Purchase Agreement (PPA) where qualifying customers get the benefits of solar with virtually no investment and avoid the expense of purchasing a system outright. Customers can finance solar panel installation by simply paying a monthly payment – a monthly cost that is guaranteed to be LESS than a Southern California Edison bill without solar. Over a year period, this monthly savings can equate to more than $1,100 back in your pocket (on average).

In fact, over a period of 20 years, the solar panels boast a 469% rate of return on investment!

“Numbers don’t lie, and we’re thrilled to be able to make the up-front costs of solar panel installation more affordable to our customers,” says company President Al Alferi. “In this economy, every dollar counts, and with the immediate monthly savings our Power Purchase Agreement offers, homeowners can reap all of the cost benefits of solar power with no initial investment.”

American Vision prides itself on being on the leading edge in customer service, which is why the company didn’t rush into just any financing option for its customers in the past. “The new Power Purchase Agreement had to be in the very best interest of our customers,” added Alferi. “Other financing contracts out there include stipulations that we didn’t agree with. For example, under some contracts, major restrictions come into play should the homeowner wish to sell the home and transfer the system. We couldn’t in right mind suggest our customers get locked into an agreement like that. Now, we can stand proudly behind the new American Vision Power Purchase Agreement, and every bit of the fine print in back of it.”

Benefits to having ‘Solar as service’ run deeper than just cost savings. The American Vision PPA gives customers 20 years of maintenance free solar for their home.

Husband and wife team Bill and Kathleen Herren began providing homeowners with energy-efficient solutions with their window sales and installation company, American Vision Windows. Now, more than ten years and 30,000 satisfied customers later, the company has expanded its unmatched service to its other brands that will help revolutionize the home improvement industry: American Vision Solar and American Vision Garages.

American Vision Solar

Wildlife Works Launches CODE REDD Campaign to Save the World’s Threatened Forests

Emergency campaign calls for immediate action from the private sector to reduce their carbon footprint while supporting innovative forest protection projects.
Wimage

As corporations recognize their responsibility to do all they can to reduce their carbon footprint by lowering emissions and offsetting the rest, the CODE REDD campaign aims to make it easy and compelling for corporations to pledge to buy REDD (Reduced Emissions from Deforestation and Degradation) carbon offsets.  Which is why Wildlife Works announced the launch of CODE REDD, an emergency action campaign to save the world’s wild forests using private sector financing within the Voluntary Carbon Market.

The Campaign will also ensure that those offsets are generated by specific high quality forest protection projects that have proven they can protect threatened forests while at the same time providing unprecedented sustainable development opportunities to local forest communities.

“The goal of the CODE REDD Campaign is to dramatically increase the demand for REDD project carbon offsets now.  With increased demand, REDD can scale to overcome the massive threat to the worlds forests and make a significant contribution to mitigating climate change.” said Mike Korchinsky, Founder and CEO of Wildlife Works and the creator of the CODE REDD Campaign.

Wild forests are disappearing at the alarming rate of 13 million hectares per year (FAO 2010) and deforestation accounts for an estimated 17% of total annual global greenhouse gas emissions (UNIPCC 2007). The effects of deforestation are having devastating impacts on people and wildlife throughout the world and are threatening the resources humans need for survival. Climate change experts widely agree that climate stability cannot be achieved without the conservation of the world’s remaining forests.

“Reducing your carbon footprint is not a UN obligation. It’s a global responsibility. It is time for the private sector to show innovation and leadership and do something REDD,” said Korchinsky.

Source: Wildlife Works