In this interview under our “Corporate Sustainability” Series, David Horlock, VP Global Inspection and Auditing talks about sustainability- its drivers, role of consumers and their new 'Think Green Initiative' tool.
David Horlock is the Global Inspection and Auditing (Consumer Goods) in Intertek. He has 25 years of experience and is an active leader in Quality, CSR and Environmental Sustainability working with global brands and retailers on supplier facilities to bring them into acceptable compliance to improve safeguards, product confidence, human health and the environment. He was one of the awardees of the Princeton Premier Business Leaders & Professional Honours Award for 2009-2010 Registry.
Every organization has a different definition of sustainability involving different aspects (environmental, social, and labor), how does Intertek define sustainability in its business construct?
We look at issues which can impact on business risk and the reputation of our clients what we term as reputational risk. Such risk can be detrimental to the business in the context of regulatory compliance associated with Product Safety, Product Quality, Workplace Conditions (Social), Environmental and Security issues. In all these areas, we offer a portfolio of Testing or Inspections or tailored solutions to mitigate and manage risk and/ or demonstrate conformity, traceability or assessments in order to provide the necessary transparency, confidence and trust relating to products, processes and practices along a particular supply chain.
How does Intertek make the business case for sustainability/ drivers for sustainability?
The business drivers are there and well communicated in the market. For example we know the key drivers as follows:
- Environmental legislation exists but is not necessarily well enforced. The important point is that legislation is good and exists, so it provides a basis for measuring compliance.
- Climate change concerns are real and resulting in changed mindsets
- We have limited resources – our past practices have led to water pollution, air pollution, reduced bio diversity, depletion of natural resources, our top soil is disappearing, species are endangered, fish stocks are dwindling, forest are depleted and water is becoming scarce. We are reaching our planet carrying capacity and the current methods must change.
- Consumer are becoming better educated and aware of these challenges and will start to vote with their buying decisions
- Market competitiveness will reward the early adopters who will lead the industry, others will follow and then it will become mainstream
- Business risks & opportunities exist. Risk for those that do not change and Opportunities for those that change and become the early adopters. The late adopters may disappear.
What role do you think consumers play as a driver in sustainability?
Most importantly is the Changed consumer mindset which will cause Brands and Retailers to respond-
- Consumers are better educated and informed
- Consumer concerns are moving from physical product attributes to social, environmental and sustainability issues
- Media & NGOs are more vocal and more active than ever before and will make brands, government and regulators accountable
- Reputational risk is a huge concern for brand integrity and this will force company boards and stakeholders to respond
- Traceability is becoming critical in order for brands and suppliers to demonstrate compliance within their supply chains
What does this mean for businesses?
a. Business will need to comply with existing regulations and anticipate greater enforcement and new regulations
b. Manufactures and Suppliers will need to demonstrate their green credentials, differentiate their companies and products and meet buyer requirements
c. Business will needs to start moving from thinking green to acting green in order to protect their brand image and communicate their company’s efforts and progress in this area
d. Full supply chain traceability is required - Raw material to Manufacturing to Retail shelf i.e Fiber to Fabric to Garment
e. Adopting a sustainable culture with drive innovation, drive growth and save long term cost
Does Intertek have any particular carbon reduction targets/sustainability targets for 2010 or for the long term? If yes, how much of it has been achieved so far?
We are working on it and have first decided to measure our GHG emissions for the services we provide to our clients. We have done this exercise first with our auditing services and intend to deploy in 2011 for the rest of our inspection and testing services. We have also decided to provide our clients with the possibility to carbon offset whenever they use our services and have partnered with Eco-Securities/Climate Care so that they can issue the carbon offset certificate and invest in relevant projects.
Do you feel sustainability would be a key driver for companies in India for gaining market share in the coming future? What has been Intertek’s feedback from their clients on this?
Most Global Brands and Retailers have clearly defined Environmental policies and codes of practice which define their commitment to sustainability including reductions in energy, recycling, reduce, reuse, waste management & reduction, pollution prevention, hazardous material management and so forth. Brands and Retailers will source from those whose can demonstrate they are meeting these environmental challenges. You can look at the website of most retailers and see their environmental policies, For example:
- Caring for the Environment (Climate Change, Waste Recycling -including Packaging, Sustainability Sourcing)
- Climate & Energy (Sustainable Buildings, Trucking Fleet, Greenhouse Gas Emissions), Zero Waste (Reusable Bags), Products (Locally Grown Products, Packaging Reduction, Compact Fluorescent Light Bulbs)
c. Marks & Spencer
- Climate Change (Become carbon neutral)
- Waste (Send no waste to landfill)
- Sustainable Raw Materials (Extend sustainable sourcing)
- Health (Help improve the lives of people in our supply chain)
- Fair Partner (Help customers and employees live a healthier life-style)
For example, Look at how the Indian Textile dyeing Industry compares against this
Textile dyeing & treatment accounts for 20 % of Industrial water pollution in India.
72 toxic chemicals identified in water
30 of which cannot be removed.
1 Kg Fabric Production = 200 L water
1 garment = 1,500 liters
Considering that only 1% of global water resources are fresh and readily available, If you where a brand or Retailer, would you want your brand or supply chain to be associated with poor environmental practices of Textile dyeing mills which are contributing to industrial water pollution? This is just one example. If the India Industry does not get its act together then buyers have the option to move to other countries or just work with individual dyeing mills that adopt sustainable practices.
Are there any particular sectors in India that you are focusing on while providing sustainability solutions?
We are focusing on the areas where our clients are based. This translates into focus on the consumer products sector – Textiles, Home Fashion, Garments, Toys, DYI, Furniture, Electronics, Hardlines, Healthcare, Food, Pharmaceuticals, Personal Care, Chemical, Automotive and Hospitality sectors. Having said this, the services are also applicable to higher risk industries such as cement, steel, mining and petrochemicals.
Do you think buyers (and suppliers) these days are becoming more conscious with respect to the life cycle of the product/ tracking the manufacturing footprint of products?
Yes, this is becoming part of buyer’s requirement progressively and we foresee a high demand of product life cycle data to be requested by brands and retailers for logistics and transportation, manufacturing and raw materials and recycling and disposal if they want to be able to build their sustainability business case on products.
The product environmental impact, and carbon footprint is part of it, is being used as the new approach to sustainability strategy in the consumer goods industry. One can for instance look at recent disclosure from Wal-Mart, Procter and Gamble or Unilever to realize that this is an integral part of their strategy of development for the coming 5 years.
A lot of companies now have started foraying into the sustainability w.r.t. supply chain; do you have any particular solution that would be useful for them?
Yes – Intertek has various solutions to address sustainability for both a Site/Company specific and Product specific scenario. The most relevant is the Think Green Initiative (TGI) program because it acts as a pre-requisite in providing the cultural change necessary. You see, to be green one must move from a suspended state of thinking green to acting green, only then one can become green. TGI helps companies by starting to act Green. That means capturing, monitoring and acting on the information so you have the evidence to showcase and demonstrate your Green credential.
For Site/Company approach we offer assessments which are specific to the geographical location against standards such as
- Workplace Condition Assessment (WCA) – measure social compliance against labour laws
- Think Green Initiative (TGI) – measure performance against the TGI standard
- Green House Gas (GHG) quantification to identify, measure and reduce impact, save cost and increase energy efficiency.
Results are provided in benchmark reports against Global, Country and Sector averages which provide a catalyst to motivate factories to improve their performance against the community average. Factories that achieve a score of 85% are provided an “Achievement Award” which is valid for 1 years and subject to annual renewal by way of assessment. Such reports and certificates can be used to showcase a manufacturer’s performance to potential buyers, clients and stakeholders.
For Product specific scenario, we offer life cycle analysis design to calculate the environmental impact of a specific product along its supply chain from raw material through to manufacturing, use and after life. Such studies help in the design of more sustainable strategies to reduce environmental impact and save cost. These services include:
- Carbon footprint and Life Cycle assessment
- Product certification for environmental claims associated with Carbon labels and Green Marks
- Green packaging for product and transportation
- Environmental Training program to qualify quality practitioners
Can you tell us more about the Think Green Initiative?
The Think Green Initiative (TGI) was designed in collaboration with Industry to help put business onto an auto pilot mode to enable Manufacturers of Today to Think Green, Act Green, and Be Green!
The vision of TGI is to provide greater visibility on Environmental Commitment and Performance ensuring that business will:
Meet environmental regulatory requirements
Reduce environmental footprint
Achieve cost savings and improved material efficiency through
better use of resources,
reduce, recycle and reuse of materials,
Achieve sustainable business practices
Provide necessary insights for green products and sustainable purchasing
Achieve good corporate governance
In achieving this, TGI Program has designed eight (8) modules covering-
Two (2) Core Compliance Modules
Environmental Legal Compliance Review
Environmental Management System
Six (6) Environmental Modules
Water – reduction, recycle, waste discharge and pollution prevention
Air Emissions – air emission management and pollution prevention
Energy – energy savings and carbon emission reduction
Noise Emissions – noise reduction and pollution prevention
Hazardous Materials, Equipment and Waste – solid waste management, hazardous chemical management
Sustainable Production – recycle, clean technology
The TGI value proposition is that it provides a mechanism to enable an organization to demonstrate its commitment and “Green” credentials to its stakeholder Clients, Investors, Employees and Community members ensuring one meets the requirements of tomorrow’s society. It ensures that environmental responsibility and sustainability becomes a part of a company’s DNA and competitive advantage.
Can you cite any specific case studies under the Think Green Initiative?
We have conducted a Think Green Initiative (TGI) pilot program with 75 manufacturers in Asia. The average cost saving in energy for the 75 factories was US187,000. This is just energy savings. Other savings came from reuse, improved material efficiency, waste reduction, improved eco designs. The other types of best practices adopted by pilot participants included:
- Use of energy saving bulbs
- Set minimum temperature control for AC as 26°C
- Use of solar heating system
- Switch off lights/computers when leaving workplace or during break
- Adopt to energy efficiency technologies and equipment
- Recycle and return to vendors used scrap, fabric, plastics and cartons
- Reduce Packaging weight ratios
- Recycle waste and remove hazardous chemicals
- Only use chemicals registered for their intended use
- Harvest water through smart catchment areas and roof
- Use renewable raw materials
- Product certification to chemical free themes
- Eco friendly factory designs and material
The benefits offered to the participating factories included
- Reduce Input Cost
- Factories where able to provide reports and benchmark results to their clients in order to show case their performance. Many of them achieve TGI Achievement Award which is a certificate provided to Factories that achieved a score above 85%
- First mover advantage
- Capture future wallets of tomorrow
- Feel good about doing the right thing
- Be sustainable
- Establish your green credentials
Remember, to be green one must move from a suspended state of thinking green to acting green, only then one will become green. Work towards associating your products with being Green. Its good for business.
Do you also have any employee education programs to make them more aware about sustainability measures in the office?
We are working on different areas such as environmentally friendly offices (for example, in Mexico we have designed an eco friendly building and laboratory operation with the latest thinking and technology). In addition to this we site specific programs and targets for recycling programs for paper, energy efficiency lighting, and we have our HR practices to ensure eco friendly office measures such as switch off lighting, paper double printing and so forth.
This interview was conducted by Roselin Dey from the India Carbon Outlook team.