Sustainability and supply chain are closely linked, even in the world of textiles. In previous articles published in this magazine, my colleagues and I have often talked about the importance for textile companies of engaging virtuous suppliers, for example for wastewater recovery, so as to motivate those who have not yet taken action.
In fact, a company that wants to ensure its positive impact must become aware that it is not only responsible for its own operations but also for how its suppliers behave. And when this is based on practices that are not sustainable, legally, humanely, socially and environmentally, one becomes complicit.
CONTEXT
Why choose more sustainable suppliers?
Sustainability has become an increasingly important issue for companies around the world, and especially for companies in the textile industry, given the frightening numbers in terms of pollution and social exploitation, to say the least.
Many companies seek to adopt sustainable practices not only to reduce their environmental impact, but also to meet consumer expectations and improve their reputation. However, choosing a sustainable supplier can be a challenge.
“Integral Corporate Responsibility” touches suppliers in two dimensions, that of being part of the company’s value chain and that of being a stakeholder of the company.
Until now, in most corporate settings, sustainability in supply chain management has been addressed by merely looking at the effects of managing its activities on the environment, without taking into account the connections between the various stages of the supply chain itself that can generate negative impacts.
The growing attention to sustainability issues and the awareness of their systemic connection among all supply chain actors have led companies to understand that only through the full involvement of the entire supply chain can inefficiencies, risks and environmental impacts be reduced, creating value for stakeholders with a view to sustainable development.
But what are the main motivations that can lead companies to sustainable management of their supply chain?
DEFINITION
What is meant by sustainable supply chain management?
The concept of sustainable supply chain management invokes a management model having the aim of improving the long-term performance of the specific organization and its entire supply chain.
This can be achieved through the strategic integration of social, economic and environmental objectives, aimed at ensuring the coordination of the entire system of inter-company processes.
In detail, building a solid and reliable supply chain will require proceeding along several lines, including:
- improve process efficiency by adopting human rights and environmental protection practices;
- use recyclable raw materials;
- reduce the production of waste and production waste;
- develop green textile products;
- improve the efficiency of the transportation system to curb the pollution produced;
- manage economic and environmental risk;
- improve supply chain efficiency;
- eliminate waste and related pollution generated by their production;
- increase the quality of products/services so as to extend their lifespan;
- reduce unseen costs, such as, for example, those related to waste management or pollution, by adopting environmental sustainability and circular economy practices;
- reduce waste produced through activities that take place throughout the supply chain by implementing useful practices for improving activities already at the product/service design and development stage;
- create partnerships marked by mutual support on issues of common interest, going beyond just sharing criteria and standards;
- choose suppliers in relation to their commitment to sustainability, being a relevant part of the entire value chain, given that the way they work has an impact on the product/service to be offered to the final consumer;
- Use raw materials and substances with a reduced impact on the environment;
- Reduce the amount of energy resources consumed;
- have environmental management systems in place;
- produce in accordance with ethical and environmental principles;
- adopt green procurement criteria.
WHY MANAGE THE SUPPLY CHAIN MORE SUSTAINABLY IN THE TEXTILE INDUSTRY
Usually the push originates from motivations that can be contained in three categories:
✓ economic motivation, driven by the fluctuation of costs for raw material, energy and other procurement, which pushes the company to manage them consistently with socio-environmental aspects in order to avoid risks of inefficiencies;
✓ environmental motivation, due to increased consumer awareness of the environment and climate risk and also the competitive advantage brought about by the adoption of sustainability policies;
✓ social motivation, due to the increased relevance of human rights issues and corporate welfare, consumer demands for companies to obtain environmental attestations and/or certifications, and the risk of complaints if the company does not pay attention to consumer demands.
ANALYSIS
What is important to consider in the supplier selection process?
The selection of suppliers with whom to establish partnerships is an essential element in affirming the sustainability of a company’s overall relationships.
With this in mind, therefore, it will be important to:
- have a Code of Ethics, share it with your suppliers and ensure that they comply with its provisions.
- require suppliers to adopt procedures for managing specific strategic and operational risks.
In this respect, two types of strategies can be identified:
- risk management-oriented strategies that can be implemented to reduce risks related to supply chain management.
- strategies aimed at improving the sustainability of the supply chain and producing sustainable products.
FOCUS
How to understand whether our suppliers are taking a sustainable approach
There are at least 4 ways to check your suppliers’ sustainability orientation:
✓ monitoring their sustainability
This activity can be implemented through:
- questionnaires;
- meetings with suppliers and other stakeholders aimed at interacting directly with those involved in their supply chain;
- adopting incentives that help and motivate suppliers to pursue sustainability and performance improvement goals.
✓ measuring supply chain performance
Measurement will not only have as its reference the economic dimension, extending to investigate the socio-environmental dimension as well, collecting data and information on sustainability performance in the various areas of the supply chain.
✓ providing for performance control and monitoring systems
Control and monitoring can be implemented through:
- external audits at production sites, carried out by an external agency or directly by company personnel through interviews with employees and management or inspections of the company to verify compliance with certain standards;
- self-assessment, carried out through surveys or interviews, used, in particular, for the selection of new suppliers.
✓ reporting the results of the application of sustainable supply chain policies
This activity is usually carried out through the preparation of the sustainability report, which describes and makes public the policies for the environment, the actions put in place, the related financial aspects, and the impacts (direct and indirect) generated on the socio-environmental spheres of all activities.
VADEMECUM
5 scopes for finding more sustainable partners in the textile sector
In the case of the textile sector, to summarize, we can say that the specific factors to keep in mind are the following, in order to apply strategic reasoning when choosing:
1. Experience and specialization
The equipment used must be state-of-the-art, which means a trend toward improving the processes and technologies used to improve environmental performance and energy impact. In the case of wastewater treatment, for example, the technologies used should be state-of-the-art, using bacteria and organics to degrade contaminants into smaller compounds, avoiding the use of chemical components.
State-of-the-art systems, such as reverse osmosis, allow up to 95% to 98% recovery without the use of these substances.
2. Quality and standards
Quality is a non-negotiable factor in the textile industry. Ask for samples of previous jobs and see if they meet your quality standards. Make sure the supplier has relevant certifications that support the quality of its production.
3. Localization and logistics
Consider the geographical location of the supplier and look for partners in countries that already specialize. A convenient location can optimize the supply chain. In the case of wastewater, don’t think that the most advanced countries are necessarily Japan, Italy or the United States. Countries such as India, China, and Mexico also have innovative companies in wastewater treatment. Professionals in these countries are driven by the goal of spreading these niche technologies to developing countries. Don’t be guided by prejudice.
4. Technology and innovation
The fashion industry is constantly evolving. A supplier that adopts innovative technologies, such as digital manufacturing and product traceability, can offer competitive advantages.
5. Sustainability
Sustainability is increasingly important in the industry. Make sure the supplier shares your values in terms of sustainable practices and environmental responsibility. Share your code of ethics with the supplier to verify that your goals are in line. It is interesting to check what international and third-party certifications a company has received due to wastewater reclamation.
In addition, the presence of wastewater treatment regulations in the countries where these companies operate is another indicator of accountability.