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Sustainability in textiles supply

chain

Sustainability in textiles supply chain EcoLogic Insights series

EcoLogic Consultancy

Sustainability in the textile supply chain

Textiles ( ‘Kapda’ in the ‘Roti, Kapda aur Makaan’ trio) forms one of our basic human needs across
all cultures around the globe. Among these, only textiles are both non-perishable and easily
transported. Thus, textiles have been part of a global market since the days of the Silk Road. Rapid
shifts are happening in the way textiles are produced and supplied. One thing that does not seem
have changed is that much of the production is based in Asia. Wherever one may go shopping for
clothes, one would inevitably find goods made in China, India, Bangladesh, Vietnam, Cambodia,
etc.

The textile supply chain has evolved to meet changing price and quality demands from the global
marketplace. The sophistication of buyers in tracking their suppliers has also gone up. In the last
decade, buyers added a new dimension to their requirements, and began making demands
regarding health, safety and labour conditions. Global manufacturing centres have increasingly
had to respond not only to local requirements but also to global ones. The new dimension being
rolled out in the supply chains of many sectors across the globe including textiles is the
Environmental Sustainability. Environmental Sustainability takes into account the use of water,
energy, and natural resources, and seeks to minimize negative impacts to the environment in the
production of textile-based goods, as well as in their use by consumers. The long term goal of such
initiatives would be complete sustainability.

Progressive brands and retailers have been exploring sustainability initiatives since the middle half
of the last decade: testing initiatives first internally and now considering roll-out through their
global supply chains. Sustainability is about doing ‘more with less’, which means finding savings
and creating business value in addition to having a positive impact on the environment. The
following aspects therefore become relevant: energy efficiency, carbon / greenhouse gas emissions,
water and chemical footprint as well as logistics.

For suppliers in textile industry, it is essential to understand

1. What are some of the progressive brands and retailers doing and planning for their supply
chain?
2. How does one begin to measure sustainability and compete in this changing market?

A number of initiatives have already been started to engage in to improve raw materials in the
supply chain, such as the Better Cotton Initiative and the Organic Exchange. Some initiatives are
related to buyers coming together to form a unified voice, including the Outdoor Industry
Association, and working groups assembled by the Business for Social Responsibility (BSR).

The current work being done to increase the sustainability of the global textile supply chain is still
in its early stages or being applied regionally, in the next 24-36 months these initiatives will
become mainstream globally.

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Textile production is resource intensive

Textile Production is a vital global industry employing hundreds of millions of people, and it is also
very resource intensive: consuming copious amounts of energy, water and other raw materials.
According to research done by the World Wildlife Federation (WWF), an average of 8,500 litres of
water is needed to grow one kilogram of cotton, equivalent to one pair of jeans. Due to the
hundreds of harmful chemicals routinely used in washing and dying fabric, the textile industry is
also the #1 industrial polluter of fresh water on the planet.

In developing countries where large global production centres are based, the textile sector forms a
large part of their carbon inventory. As a case in point, in India the textile sector consumes 10% of
the country’s energy and has increasing carbon intensity compared to other sectors.

Sustainability in supply chain is integral for the sector

Because of impacts such as these, over the last few years some progressive brands and retailers in
North America and Europe have embarked on integrating sustainability into their supply chain.
While there is the societal imperative, the greater opportunity lies in sustainability through more
efficient resource utilization which in turn has a positive financial impact for every part of the
supply chain. Virtually all the production and manufacturing of textiles occurs in developing
countries and hence activities being planned in the developed world are having a ripple effect in
bringing about resource conservation elsewhere.

Why think of sustainability

From the standpoint of many North American and European firms that have a large textile product
range, almost all the environmental impact from manufacturing occurs offshore. Some of these
companies are at the forefront of working towards sustainability for a number of

1. Sustainability generates business value by unlocking opportunities to save on critical resources.

2. Firms with sustainability practices get rewarded by capital market shareholders and
stakeholders.
3. Understanding supply chain risks is important in the face of impending climate legislations.
Developing countries too are looking at legislations on water usage and carbon. All these give
rise to supply chain risks depending on sourc ing regions. To proactively manage these impacts
and risks, it is essential to build idea of supply chains.
4. Attracting new consumers with new products and carbon/sustainability labelling is an
opportunity that will increase in value with consumers getting more knowledgeable and savvy.

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What does this mean for textile manufacturers?

As the market for sustainable textiles grows, many more firms will begin demanding sustainability
from their manufacturers the same way they demand fair prices, fast delivery and high quality.
Currently, this means having a sustainable supply chain is a competitive advantage for textile
manufacturers.

While most suppliers selling to the brands and retailers are engaged only in cut & sew, it is only a
matter of time before the entire supply chain is held accountable. Many brands will soon start
shifting focus beyond that and downstream to manufacturing. Already firms like Levi Strauss & Co.
and Walmart have started collecting data from the rest of the supply chain.

In order to build best-practices and quantify savings, different approaches are being taken. For
instance, Marks & Spencer is creating entire ‘eco factories’ where it is able to demonstrate energy
savings to the tune of 40% over comparable factories. Nike on the other hand is working with a
set of strategic partner factories that are part of its MLS (Manufacturing Leadership), to establish
benchmarks.

The signaling for manufacturers is quite clear: become aware and get started on this new path!

Measuring and communicating

Due to regional and fragmented nature of consumer demand – there are a number of standards
and methodologies coming up in the marketplace. Most of the standards are still in the adoption
phase, the underlying data requirements for most of them are quite similar.

One of the more established and used standard is the Carbon Label by Carbon Trust. The UK has
been amongst the most progressive markets in defining a formal carbon footprint that can be used
by consumers. The Carbon Label Company set up by the Carbon Trust in 2007 provides information
for both consumers as well as businesses on how to use the Carbon Label.

The Carbon Footprint is developed on basis of the PAS 2050 guideline. Tesco, Continental
Clothing, Levi Strauss & Co. are amongst those that have been testing some products with the
Carbon Label.

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Snapshots of sustainability activities of firms

The following table summarizes some of the leading brands, their activities and scope

Brand Standard Target Parameters

Adidas ISO14001  Embedding Carbon
Internal tool environmental Energy
sustainability across Waste
the business Sustainable materials
 Effectively
managing business
risks and social
compliance in the
supply chain
 Extending
engagement
internally and
externally
Carrefour GRI Reducing energy Carbon
2
GHG Protocol consumption per m by Energy
Oeko-Tex Certification 20% by 2020 against Logistics
2004 as baseline
GAP GRI  Environmental Carbon
GHG Protocol footprint assessment Energy
and setting Waste
quantifiable Sustainable materials
environmental goals
 New supply chain
waste management
IKEA Own tool Reducing CO2 Carbon
emissions and Energy
increasing share of Waste
renewable energy Sustainable materials
Walmart Sustainability Index Reducing 20 million Carbon
GOTS Certification tonnes CO2 eq from Energy
supply chain by 2015 Waste
Sustainable materials
Logistics
Levi Strauss GHG Protocol In the process of Carbon
Global Effluent collecting data on its Energy
guidelines for scope 1 and scope 2 Waste
wastewater emissions. Targets will Sustainable materials
be set thereafter Logistics

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Peeping into the future

Going forward, as sustainability becomes mainstream focus across the entire supply chain, the
following events are widely believe to happen

 By the end of 2011 all major textile brands and retailers will have announced initiatives that
plan for working with a more sustainable supply chain. Some of the firms are already
implementing measures within their own facilities and soon they will look to their supply chain
which is where the majority of the environmental footprint exists. The sustainability efforts will
move beyond the early adopters and into the mainstream between 2012 and 2015.
 Textile brands will make supplier choices based on which suppliers are able to report and
demonstrate sustainability measures.
 Brands and retailers may struggle initially in mapping out their supply chain but issues will be
overcome soon. Some of the low-hanging opportunities from a retailer standpoint will be
logistics and sourcing. We will see increasing activities on this front.
 From a supply perspective, vertically integrated firms are likely to be early adopters of
sustainability reporting because they have easy visibility throughout their supply chain. They
will also likely use this as a market advantage.
 There may be issues raised around non-tariff barriers by some textile exporting nations at the
WTO. Market mechanics will have to be developed to address these concerns. Just like no one
questions the need for quality products any longer, no one will question the need for
sustainable products.
 The buzz around organic cotton will continue to increase. But as soon as it is public knowledge
that organic cotton is going to remain a very small percentage of the overall raw material for
the textile sector, we expect to see the emphasis shift toward other sustainable materials.
There also will be a greater emphasis on reducing toxics and chemicals.

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About Us
EcoLogic Consultancy came into existence with the purpose of ‚To help our clients in
understanding, establishing sound Environment Management Systems, and pursuing sustainable
business solutions through our various services to abate direct and indirect impact on ecological
balance.‛

We have demonstrated expertise in the areas of carbon accounting and management, energy
management systems, voluntary/compliance carbon markets, environment management and
sustainability and carbon branding.

To know more about EcoLogic, please visit http://www.ecologicconsultancy.in

To schedule a meeting and discussion with us, do reach us on

Kedar - +91-9665407848 – kedar@ecologicconsultancy.in

Indrajeet - +91-9028788430 – indrajeet@ecologicconsultancy.in

Shailesh - +91-9890887670 – shailesh@ecologicconsultancy.in

Sustainability in textiles supply chain EcoLogic Insights series