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By Eileen Fritsch, Industry Author

Are You Prepared for the Greening of the Supply Chain?

To meet changing customer expectations and regulatory requirements, many major retailers and brands are taking steps to verify that the products they sell to consumers will be manufactured in a sustainable manner.

Have customers started asking tougher questions about the sustainability of your garment decorating processes? If not, they will be soon.

To meet changing customer expectations and regulatory requirements, many major retailers and brands are taking steps to verify that the products they sell to consumers will be manufactured in a sustainable manner. Environmental groups and organizations are encouraging these efforts to “green the supply chain” for many types of products, including apparel and textiles.

Improving sustainability within supply chains matters because supply chains serve as arteries of international commerce. Supply chains are globally dispersed and constantly changing.

If every company in a manufacturer’s supply cha in operated in a more sustainable, ethical way, it could have a world-changing impact — regardless of which political party is leading the US government in any given year.

So, in addition to questions about the cost, quality and fabric, your customers may soon be asking questions such as:

• How much do you know about how and where your garments are manufactured?

• How are your inks made?• How much water and energy do you

use in your textile-printing processes? • What efforts are you making to

become a more sustainable business?

Three Pillars of Sustainability A universally accepted def inition of sustainability doesn’t exist. But the broadest def inition recognizes that sustaining environmental quality requires peaceful societies with stable economies. Really there are three interdependent pillars of sustainability:

Environmental sustainability is the ability to support a defined level of environmental quality and natural resource extraction rates for an indefinite period.

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Social sustainability refers to the enduring ability of a nation, family or organization to function at a defined level of social well-being and harmony.

Economic susta inability is the capacity of an economy to sustain a defined level of economic production for an indefinite length of time.

The Great Recession of 2008 underscored the importance of these three pillars. Funding for environmental organizations dried up as businesses struggled and the government received less tax revenue.

Likewise, people living in poverty or war zones are more concerned about day-to-day survival than the long-term health of the environment.

In 2009, environmental groups and government regulators started challenging companies to take bigger, bolder actions in terms of social responsibility and environmental sustainability.

After the Rana Plaza garment factory collapse killed 1,134 people in Bangladesh in 2013, activist groups started pressuring textile and garment manufacturers to be more transparent in every phase of their operations. They wanted to make it easier for brands, suppliers, workers and key stakeholders to identify sources of human rights and environmental abuses.

But businesses were also starting to see that sustainability and transparency requirements could stimulate a beneficial culture of continuous innovation and improvement.

Some of these business benefits were outlined in the book The Necessary Revolut ion: How Individua ls and Organizations Are Working Together to Create a Sustainable World. One of the book’s authors, Peter Senge of MIT, said companies must regain their sense of community and exist to do more than maximize return on investment capital.

In a 2010 interview in the Harvard Business Review, Senge said real change occurs when businesses aren’t shamed into environmental action but rather encouraged to create new sources of business value through related technical, management, process or cultural innovations.

He believes businesses and their supply chains can be re-imagined so that efficiency, productivity and the maximization of the return on capital are balanced by the imagination, passion and trust needed for innovative solutions.

The Sustainability Consortium One organization at the forefront of big, bold action is The Sustainability Consortium (TSC). Founded in 2009,

TSC is a global, non-profit organization that is partnering with leading companies to transform the consumer-goods industry.

TSC wants to create a sustainable consumer-goods ecosystem that uses a common approach to measure and track the product sustainability of $1 trillion of retailer sales over the next five years.

They envision a world in which consumers can buy the products they love, from the people they love and be assured that these products are manufactured without causing harm to people or surpassing the environmental limits of our planet. Global production of consumer goods accounts for more than 60% of greenhouse gas emissions, 80% of water usage, and two-thirds of tropical forest loss annually.

TSC wants to incentivize and support manufacturers and suppliers to adopt new methods and design more sustainable products. There’s a sense of urgency because over the next few decades, 2.5 billion people are expected to join the consuming class.

TSC current ly ha s more than 100 members, including companies such as Walmart, Fruit of the Loom*, HanesBrands, Sam’s Club, Wrangler, P&G, Unilever and PepsiCo.

To help these companies improve the sustainability of their supply chains, TSC has developed toolkits that can help all types and sizes of companies evaluate the sustainability of their operations.

TSC’s method takes into account that consumers are demanding more transparency and more sustainable choices on retail shelves but are reluctant to pay higher prices. TSC stakeholders collaborated to design a simple system that would address both imperatives — meeting consumers’ demands while reducing the costs of investing in sustainability improvements to supply chains.

Using science-based metrics, TSC working groups identify “hot spots” in the life cycles of different products, in eight areas: (1) clothing, footwear and textiles; (2) electronics; (3) food, beverages and agriculture; (4) general merchandise; (5) home and personal care; (6) packaging; (7) paper, pulp and forestry; and (8) toys.

The groups also identify practices to address the hot spots. The hot spots and performance improvement opportunities are summarized in a sustainability profile for each category.

For example, to improve the sustainability of cotton textiles (for T-shirts, dresses, polo shirts, bed sheets, leggings, pants, window curtains and tablecloths), TSC outlines

One organization at the forefront of big, bold action is The Sustainability Consortium (TSC).

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measures for sustainable agriculture, use of resources, pollution control, water usage and working conditions. You can find the sustainability profiles online.

The TSC Clothing, Footwear and Textiles Sector Working Group has developed sustainability prof iles for apparel and home texti les, cotton-polyester blend textiles, cotton textiles, leather goods and footwear, nylon textiles, polyester textiles, rayon textiles and synthetic material footwear.

Within each of these product categories, TSC has also developed key performance indicators (KPIs). The KPIs are in the form of questions. Manufacturers use these KPIs to survey current or potential suppliers to determine which companies are taking meaningful actions to improve the sustainability of their products.

For example, in order to sell decorated T-shirts at Walmart you might be asked to complete a sustainability assessment survey with the KPIs for cotton textiles. Your sustainability assessment “scorecard” will be measured against other potential suppliers and your company will be ranked and grouped. This enables TSC members such as Walmart to track which suppliers rank high, medium or low in terms of performance of the KPIs for specific products.

Following the assessment, Walmart may ask you “What are your plans to track KPI data for the next cycle? What are your plans to improve your score?”

In the apparel category, the KPI surveys include fewer than 15 questions. Most of these address hot spots in the fabric production stage.

Many of the biggest screen printing companies that sell to Walmart or Sam’s Club have probably already answered the TSC’s KPI questions. But smaller companies might want to prepare, too, because other retailers might soon choose to adopt the TSC approach.

Christy Slay, Director of Research at The Sustainability Consortium, understands the some KPIs might intimidate smaller screen printing operations. Christy’s mother (now retired) designed a line of screen printed women’s apparel that was sold in over 800 gift stores, including all Cracker Barrel stores. While her parents strived to offer durable, attractive products at the lowest cost, Slay believes they would have also wanted to do the right thing and know more about how their products were made.

If her parents had received questions out of the blue from a large customer, Slay imagines that they might have felt

overwhelmed and pressured to get a high score. She says, “They would probably need help figuring out how to get the information they needed from their T-shirt and ink suppliers to answer the questions.” But in the process of answering the questions about sustainability, they would also learn a lot about their business that they didn’t know.

For example, says Slay: “Can you say you have a quality product if the dyes used to color the T-shirts are polluting people’s drinking water or if the factory workers can’t afford to feed their families?“

Smaller garment decorating businesses can prepare for sustainability questions by answering the TSC KPIs, says Slay. “It is an affordable way to understand what topics brands are interested in and get a head start on sustainability whether or not a company asks TSC KPIs.” (Toolkits can be purchased online. )

For some questions, you may have to get some data from the companies that supply your garments. They would have to tell you if their fabric suppliers are reporting their total water use for the previous year.

“The information usually exists, but it takes time to track it down or find the right person in your supplier’s company to answer the question.” said Slay. “So even if you have to answer ‘I don’t know’ to some questions on the survey, that’s OK. At least you have started working to get the information and will be able to report it next time.

To make it easier for supply chain partners to respond to the same questions from multiple retailers and brands, TSC has partnered with SAP to become part of their Product Stewardship Network. This will enable you to use a single survey to respond to multiple retailers.

TSC is also collaborating with other groups such as the Sustainable Apparel Coalition. The Sustainable Apparel Coalition has developed tools that enable textile factories to collect and report sustainability data. Garment manufacturers can use data gathered with the Coalition’s tools to help you answer the TSC KPIs.

Slay points out that a key benefit of becoming a more sustainable business is identifying areas where you can save money on water, energy and transportation by being more efficient.

TSC Impact Reports In 2015, Walmart, Sam’s Club, Kroger and other big retailers began using surveys to assess the state of the sustainability of consumer products from over 1700 suppliers globally. The results were

published in a 2016 report: “Greening Global Supply Chains: From Blind Spots to Hotspots to Action.”

“The report identifies key priorities for the consumer-goods sector so we can all move in the same direction and drive real impact,” said Sheila Bonini, CEO of The Sustainability Consortium.

The 2016 report revealed that a few leading companies have rigorous sustainability efforts. But many companies haven’t yet taken even the first steps toward measuring, tracking and improving sustainability and performance of their products and supply chains.

According to the report, “Apparel companies are making strides to improve worker health and safety, but performance on environmental impact lags. More than 80% of manufacturers were able to report the percentage of their facilities assessed against international labor standards. But only 40% of manufacturers know the greenhouse gas emissions for their own facilities and only 15% knew the emissions data for all their facilities. Nearly two-thirds of manufacturers weren’t able to report any information about their suppliers’ tracking of wastewater quality metrics and just 10% were able to obtain this information from all of their suppliers.”

Nevertheless, this first impact report set a benchmark for future improvement.

TSC’s second impact report reveals that in 2016, over 2,000 suppliers used TSC category sustainability surveys to report their progress to their retail buyers. This number is up 25% from the previous year and represents over $200 billion in sales to their retailer partners.

According to Laura Phillips, SVP, Global Responsibility/Sustainability at Walmart, the TSC’s findings are “helping us solve a big challenge, which is how do we get our arms around our total supply chain. And how do we really focus for impact in our supply chain with our partners? TSC’s ‘hot spot’ analysis approach helps us do exactly that.”

What Garment Manufacturers Are DoingWhether they choose to join TSC or not, major garment manufacturers have already taken steps to become more sustainable and transparent.

Fruit of the Loom®/Jerzees® is a relatively new member of TSC. But their Code of Conduct already aligns with TSC imperatives.

“Fruit of the Loom/Jerzees is committed to balancing the needs of the business with our impact on the environment, the

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people involved in our supply chain, and the communities in which we operate,” said Jeanene Edwards, VP Activewear Marketing/Merchandising for Fruit of the Loom/Jerzees. “This includes our self-owned factories in Honduras and El Salvador which produce apparel under the Fruit and Jerzees brands for the decorated apparel channel.”

The Jerzees division understands that when brands such as Disney/ESPN, the US Marine Corps, or the University of Nebraska print graphics on T-shirts, they need to have total confidence in the integrity of the supply chain for that T-shirt.

Fruit of the Loom requires each factory in their supply chain to complete an annual audit for compliance with social, health, safety, and environmental standards.

Their recycling protocols in North and Central America have resulted in the recycling of 95% of their total waste.

Fruit of the Loom’s Biomass Energy Plant in Honduras is reducing greenhouse gas emissions by using locally grown King Grass to power their facilities. The energy plant supplies surplus energy to local communities.

“TSC is an obvious partner for us to gain insight into emerging sustainability innovation within supply chain practices,” said Edwards. “We work with many large screen printers who are printing for retail programs at Walmart, Target and Kohl’s. “Being a member of TSC means that these screen printers can have even more confidence in using our tees, fleece, and sport shirts for their retail customers.”

HanesBrands has also joined TSC. They have been tracking progress toward environmental performance goals since 2007 and publicly announced some ambitious environmental sustainability goals for 2020.

In April, HanesBrands posted a press release announcing their 2016 env ironmenta l per formance data . Compared with its 2007 baseline, the company reduced its energy use by 16%, carbon emissions by 16% and water use by 25%. Hanes also shifted 25% of the energy the company uses to renewable resources and diverted 118 million pounds of waste from its company-owned supply chain to landfills.

“We are proud of the culture of environmental responsibility that we’ve established at HanesBrands during the past decade,” sa id Michael E . Faircloth, Hanes’ President and Chief Global Supply Chain and Information Technology Off icer. “It unif ies our 67,000 global employees, enables us

to make progress during economically challenging years, and creates a win-win-win for the environment we all share, our communities and our company.”

Changing Attitudes about ‘The Good Life’ Major changes in consumer attitudes and business operations don’t happen overnight. It can take a generation. Change also doesn’t happen simultaneously or uniformly among all consumer groups. The rate of change is affected by shifts in the economy, consumer values, government policies and disruptive technologies or world events.

For example, as the world’s population grew, the demand for designer-brand apparel in the ‘70s and ‘80s gradually gave way to alarm about the environmental impact of excessive consumption and waste. Instead of continuously accumulating more stuff, environmentally aware consumers would prefer to see an economy in which more materials are repurposed and fewer resources are wasted.

Brands and retailers are ramping up their sustainability efforts because it can be good for business. In the “Put Your Values to Work” cover story in the May 2017 issue of Fast Company magazine, Robert Safian writes: “Companies are increasingly seeking to align their commercial activities with larger social and cultural values — not just because it makes them look good, but because employees and customers have started to insist on it.”

According to an April 2017 study conducted by the online community “Sustainable Brands and Harris Poll,” a majority of Americans from all ages and political backgrounds now believe that ”The Good Life” is less about material wealth and consumption and more about connections to people and planet. And, 80% said they would be loyal to brands that helped them live these values.

“Many assume Americans disagree about what The Good Life looks like. Yet, the research shows that young or old, Republican or Democrat, male or female — leading a balanced, healthy life that is connected to people and issues that matter is at the heart of these new aspirations,” said KoAnn Skrzyniarz, Founder/CEO of Sustainable Brands.

But about 65% of survey respondents feel that the products and services offered by companies don’t help them achieve what they see as The Good Life.

“People don’t really have ideas of how brands can specifically help, and brands are waiting for consumers to tell them what to do,” said Skrzyniarz. She believes

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brands need to generate their own insights and innovations based on Americans’ changing sense of what’s important to a life well-lived.

The more you understand about the types of products brands and retailers need, the more successful your own company can be.

But it ’s c le a r t hat producing environmentally friendly goods may soon become as much a brand attribute as quality and price.

*SGIA member since 2014

Eileen Frit sch i s a Cincinnati-area freelance writer. Contact her at eileen@eileenfritsch.com

Recommended Reading• “Greening Global Supply Chains:

From Blind Spots to Hotspots to Action”

• “The Call for Collective Action Across Supply Chains”

• The Sustainability Consortium: https://www.sustainabilityconsortium.org/impact/impact-report/

1www.sustainabilityconsortium.org/product-sustainability/productfinder

2www.sustainabilityconsortium.org/what-we-offer/measurement-reporting-system/toolkits/

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