Look: An EU Eco-Label for Clothes!
Posted: November 11, 2011 Filed under: Standard, Tool | Tags: Eco-Label, Rapanui, Traceability, Transparency 1 Comment »A recent Ecologist article on Transparent fashion pointed me to the brand Rapanui, which I didn’t know, but which has some great ideas regarding traceability and labelling:
Already in 2008 Rapanui proposed a label like the EU label for electronics. This sounds awesome and is exactly what I recently talked about with Switcher, who also support such a label. It would surely have to be mandatory to have an effect. Rapanui announced that it will come forward with a proposal to a parliamentary commission sometime now:
This development work is being carried out by Rapanui with a view to handing over the draft framework fully to a parliamentary commission over the winter of 2011/12. However, it should be noted that Rapanui’s A-G clothing ecolabel proposal is not currently a scheme, policy, service or certification currently provided by an independent organisation, nor is it not recognised by government or any governmental organisation, or affiliated in any official way with current EU legislation. Instead it is intended to be a real-life demonstration by Rapanui to show and document the viability of a scheme, with the purpose to raise awareness of it’s potential to improve the clothing industry.
EU commission: More CSR obligations for companies
Posted: October 28, 2011 Filed under: Government, Law | Tags: CSR regulation, EU agenda CSR, EU commission on CSR, EU strategy 2011-14, EU strategy 2011-14 for Corporate Social Responsibility, EU strategy CSR, Transparency Leave a comment »
Quiz question: Where is “shared value” hidden in this graph from HBR 1/2011?
Yesterday, we had a workshop with Seco and Swiss stakeholders, where we presented results of our feasibility study on a “Sustainable Trading Initiative Switzerland”. We argued in favour of a national plattform that enables that Swiss companies and public buyers learn more about sustainable trade, because in future, Swiss companies need to invest more into sustainability issues, if they want to remain competitive. At that time, I didn’t know that two days earlier, the EU commission additionally gave important political reasons for investing into CSR.
On Tuesday, the EU Commission published a 15 pages long “COMMUNICATION FROM THE COMMISSION : A renewed EU strategy 2011-14 for Corporate Social Responsibility“. Definitely, a MUST-read for all interested in the future of CSR. I will briefly sum up some important issues: The European Commission’s new strategy on corporate social responsibility (CSR), is
“part of a package of measures on responsible business (see IP/11/1238), aims to help enterprises achieve their full potential in terms of creating wealth, jobs and innovative solutions to the many challenges facing Europe’s society. It sets out how enterprises can benefit from CSR as well as contributing to society as a whole by taking greater steps to meet their social responsibility.”
The Commission now newly defines CSR as:
“the responsibility of enterprises for their impacts on society” – instead of its much criticized definition:
“a concept whereby companies integrate social and environmental concerns in their business operations and in their interaction with their stakeholders on a voluntary basis”.
In the Commission’s view, companies should “have a process in place to integrate social, environmental, ethical human rights and consumer concerns into their business operations and core strategy in close cooperation with their stakeholders”. It emphasizes
- the importance of intgrating CSR into the core business strategy,
- creating and maximizing shared value,
- explicit recognition of Human Rights and ethical considerations.
The German “Council for sustainable development” evaluates the new strategy as progressive. It emphasizes that the Commission plans to oblige companies more to CSR-guidelines, prohibit greenwashing and that it announced to soon propose laws that make social and ecological reporting obligatory. Obviously, corporate lobby organizations are vehemently protesting against the new plans and defending CSR’s voluntary character (look at BDA and also look at the article in the Handelsblatt). And also obviously, the CORA network on Corporate Accountability is supporting the proposal.
I have not read the agenda in detail yet, as I am off to a weekend in Montreux at Lac Lemand … but I will report more details when I am back.
In the meantime, you might read Michael Porter’s January “big idea” article in Harvard Business Review on “Creating shared value” – or watch his video on “rethinking capitalism“. I guess the EU proposal reflects on this. This picture sums up his “big idea”. 
The California Transparency in Supply Chains Act
Posted: November 12, 2010 Filed under: Government, Law | Tags: ASSET, Bill 657, California, Campaign, Julia Ormond, Schwarzenegger, Slave labour, Transparency Leave a comment »The actress Julia Ormond founded the advocacy NGO ASSET, an alliance to stop slavery and end trafficing. Her campaigning aims at promoting the California Transparency in Supply Chains Act of 2010 (Senate Bill 657), which Arnold Schwarzenegger signed into law on September, 30th. Bill 657 requires larger retailers and manufacturers with over $100 million in worldwide gross receipts “to eradicate slavery from their supply chains” – by posting on their websites what policies they have in place to ensure that their supply chains are free of slavery and human trafficking. “This will increase transparency, allow consumers to get more information and make more choices and motivate businesses to ensure humane practices.”
Ormond calls upon consumers to “support businesses that are creating best practices, and can encourage them to bring the innovative business skill-set and their extensive supply chain knowledge into the mix”. “We cannot get accurate and efficient access to those victims without the consent and collaboration of the companies that influence those very supply chains.” She also suggests that “we need to set aside the naming and shaming, pointing and blaming and work together, with an open mind to understanding better the very real challenges on every side: government, corporate and personal”.
Having said this, her NGO set up an interesting campaign called chain store reaction, which looks pretty much like “naming and shaming”. It aims at ending “forced labour” – i.e. “Anyone who is forced to work without pay (beyond minimal subsistence), under the threat of violence, being economically exploited and unable to walk away” – by connecting consumers with brands. The website lists more than 700 brands – regarding apparel it shows that only 22 out of 245 brands responded to the campaign in a “good” way.
And Tony Webb of Ethical corporation argues that “Sooner or later, Uzbek cotton, if defined as slave labour based, may fall under this law.” – and he concludes: “At least 3000 companies are now going to have to raise their game on supply chain risks and tracking, or risk damaging lawsuits. I wonder how many of them are currently aware of that.”
See also the interview of Julie Ragatz, Assistant Professor of Ethics at The American College, with Chris Miller, an advisor to ASSET.
New EU “Made in” regulation: Do consumers benefit or is it protectionism?
Posted: October 23, 2010 Filed under: Law | Tags: Mand, Protectionism, Switcher, Transparency, Transparency tool Leave a comment »
On thursday, the EU Parliament voted to approve new labelling laws that shall ensure more transparency about the “country of origin” of products. The changes can be summed up as follows:
“When the legislation is finalised, likely next year, manufacturers must specify the country where the majority of their product was originally made on the label. … Currently, foreign manufacturers can claim a product was ‘Made in the EU’ when it only underwent minor assembly in the bloc. That could mislead consumers who are looking for local craftsmanship or want to support local businesses.”
This attempt to harmonize might be a step forward, as companies cannot make false claims about the origin of their products anymore. But does the system really “help” consumers, as the EU parliament titled?
It might help them to promote the economy in EU countries, but what else? What benefit do I as a consumer have, if I know that my product was produced, e.g., in China or Bangladesh – as opposed to a EU country plus Turkey?! Should I avoid products that were produced in China? I think that such information only enables consumers to discriminate against whole countries on the grounds of very general information – this smells like protectionism. I am not a fan of the WTO, but is the legislation according to the WTO rules?
Instead, the EU should work towards a legislation that provides consumers with detailed information, which would be of some use to them. A good examples is Switcher’s Respect-Code or the Eco-Index. A label would not need to include all this information, but it should refer to an online database that tell us in which factories products were produced; in some years time this website could also benchmark the factories in terms of social and environmental issues. This would really help consumers to make their choice and, at the same time, it could encourage a race to the top.
The very nice label on the left was designed by Peter Lee.
Rethink your supply chain!
Posted: October 4, 2010 Filed under: Journal | Tags: Case studies, Cooperation, CSR, NGOs, Transparency Leave a comment »As I mentioned earlier, the October 2010 issue of the Harvard Business Review has a spotlight on supply chain sustainability. Most of the content is not really new, but interesting is that most authors argue that companies should take a holistic approach to sustainability in their supply chains.
Hau L. Lee from Stanford Business School gives some recommendations from his extensive research on supply chain sustainability of various large companies (e.g. Esquel (the author is in the board), Mattel, Starbucks, Posco, H&M). Companies should not take a “piecemeal” approaches to supply chain sustainability (e.g. swapping one location for another), because such an approach can generate unanticipated consequences and can thus get your company into trouble. Instead, companies “should take a holistic approach to sustainability and pursue broader structural changes” … “much earlier than most currently do” (p.64f). He illustrates his recommendations with examples from his research. Here are some of his central conclusions/recommendations:
- “Sustainability is no longer a secondary issue. It has become a competitive concern and should be handled accordingly.” Treat sustainability as an integral to operations!
- “Connect the dots between your own operations”. Understand better your (extended) supply chain and identify where social and environmental problems could occur. Regard your suppliers as partners.
- “Work with your suppliers’ suppliers” and your customers’ customers. Tell them why transparency is needed and how the information will be used – and also support them.
- “Reinvent your manufacturing process”. Think bigger and different and try to innovate processes or structures.
- “Look beyond your enterprise’s networks”. Collaborate with your competitors – and also NGOs – on sustainability issues. You do not make your company sustainable without them, particularly, if you cannot achieve scale on your own.
The article is followed by an interview with Peter Senge from MIT. He argues that three challenges must be overcome to make a business more holistic from end to end: (1) To understand the larger system they’re in. (2) To learn to work with people you haven’t worked with before (e.g. NGOs). (3) Regard sustainability as a more ambitious vision and not only as being less bad.
1st Global Conference on Transparency
Posted: September 18, 2010 Filed under: Conferences | Tags: Conference, Transparency Leave a comment »
In the context of CSR and regulation, transparency is becoming more and more important. Next year, the Rutgers School of Public Affairs and Administration in Newark is convening the 1st Global Conference on Transparency Research. Here you find the Call for Papers, which might not only be interesting for academics working in the field of regulation and CSR.
The purpose of the conference to bring together scholars from a wide range of fields including sociology, anthropology, political science, public administration, economics, political economy, journalism, business, and law who study issues of governmental transparency. This is the first large meeting of its kind to bring together leading scholars from throughout the world to collectively advance our understanding of the impact and implications of transparency policies that involve governments, either directly or indirectly. This includes policies on access to information held by and about governments, transparency relationships between government entities, transparency relationships between governments and private and nonprofit entities, and access to information heldby government about individuals. We are interested in learning about the effects of these policies and the processes around which they are developed and implemented. Papers and pre-formed panels are invited on any of the above issues.
Possible proposal topics include: governmental transparency at the subnational level, the ways in which governments regulate private entities, the ways in which private entities use government data, open public meetings, whistle blowing and leaks, informal document release processes, citizen demand driven transparency, the relationship between trust and transparency, the relationship between corruption and transparency, the intersection of privacy and transparency, surveillance studies, and the legal analysis of relevant laws. This list is meant to be illustrative and we look forward to receiving other relevant paper proposals.
One relatively new and instructive book in this context is: Fung, Graham, Weil (2007): Full disclosure. The perils and promise of transparency. Cambridge University Press.
Transparency through Eco-Index?
Posted: September 8, 2010 Filed under: Company reports, Standard | Tags: Outdoor, Standard, Transparency 1 Comment »
Eco-Index is an environmental assessment tool that will enable companies to calculate the environmental footprint of their products at six lifecycles stages (blue graph) and make it transparent. The focus is on six environmental impacts (“lenses”), which are represented by the green graph. The final idea of the project is to produce a tag for the clothing.
The tool is still being developed by the Outdoor Industry Association and European Outdoor Association. However, it is open-source and can be used by every company. The developers promise “business cases” for companies that apply their tool: “Consumer demand for more sustainable products is mounting. Suppliers, brands, and retailers alike must be aware of the impact of their products throughout the product life cycle and actively seek to reduce their environmental footprint – or risk losing market share. For outdoor retailers, another challenge is wading through the wide variety of brand-specific sustainability measurement systems and labels currently in existence. The Eco Index will provide retailers with a common language and method for identifying the environmental impacts of the products and brands they carry.” (Link)
The tool sounds promising. It would, indeed, be very interesting, if it made companies start compete on lowering their environmental impact. The evaluation of the tool must certainly depend on how the tool is designed in the end and how the calcuation is done. At the moment eco-index is still a beta-version and under peer review, but the first phase is announced to be rolled out in early 2011. Some companies have criticized that it is moving on too slowly. Three stakeholders (Zero Waste Alliance, Portland Development Commission, Ceres) are involved.
It is great that companies initiate such a tool! But more stakeholders (like universities) should be integrated. Finally, to generate a level playing field, it might be important to make such a tool mandatory for all comapnies by governments or international agencies. This is why institutions like the EU should also look at the tool.
Check also what the Wall Street Journal wrote about the tool.
Like this:
Icebreaker: Profitable sustainability?
Posted: September 8, 2010 Filed under: Academic paper, Company reports, Journal | Tags: Icebreaker, Sustainability, Transparency, Wool 2 Comments »
The current issue of the Ecotextile magazine (p. 30-32) reports about Icebreaker’s self-made strategy of “profitable sustainability”. The company (£ 65 Mio sales) argues that their focus on sustainability explains, why they have grown quickly without using advertising and instead focusing on word of mouth. If you are also interested in Icebreaker’s strategy to expand to the US and China market you can read two case studies in the HBR.
Icebreaker’s sustainability strategy fully builds on the idea that consumers trust the brand and connect it to sustainability. Surely it is good, if a company tries to embrace a philosophy of sustainability, but there remain some questions:
- Transparency: The ‘baacode‘ is the company’s web-based tool that tells the story behind the products: “to give consumers a clear understanding of Icebreaker, and of our deep commitment to the environment and to social ethics” (p.31). So far, more than 115.000 customers used this tool. It allows to type in a code from a product and read information and watch videos about how this product was produced. Great! But it would be even better, if Icebreaker disclosed the locations of their factory – as other companies (e.g. Timberland, Nike) already do. This would enable stakeholders to independently check the claims Icebreaker makes.
- Social standards: A quick look into the “Ethical Manufacturing Standards” indicates that explicit references to ILO norms are missing. Why is Icebreaker not obliging to pay living wages. And why is the company not member of a multi-stakehodler initiative that would verify their claims?
- Environmental standards: According to Ecotextile, Icebreaker does not use 3rd party eco-textile or organic certification: “Our mindset is called ‘Eco System’ which takes a holistic view of the entire company – not just manufacturing – and helps us balance ecology and economy” (p. 32). Why cannot they balance ecology and economy by using 3rd party certification systems (apart from ISO 14001)? This might provide more trust in their promises and it could make it easier for customers to compare their approach to that of other companies. The article gives one explanation, why their wool is not organic: “because the growers choose to use an anti-parasite treatment annually to improve animal welfare. Claiming that a fibre is organic covers only the use of chemicals, and doesn’t say anything about the other environmental and social issues involved in the garment’s production”. This might, indeed, then be a problem of organic standards for wool.
I have asked Icebreaker to comment on these issues.
