Greening the Supply Chain in China

April 9, 2012 • Blogs, The World at Yale • Views: 1180

By Ashley Feng:

Cleaning up the pollution, safety hazards, and corruption which plague many Chinese factories is an essential step towards reducing global emissions and averting catastrophic climate change. Sustainable supply chains are also critical to China’s environment, public health, economic prosperity, and political stability.

It’s fitting, then, that the second annual U.S.-China Forum at Yale, which assembled industry experts, professors, and students to discuss China-U.S. relations, should conclude this afternoon with a panel discussion of supply chain sustainability. Experts representing the business, consulting, academic, and nonprofit sectors identified causes and solutions.

Moderator Duncan Cheung, senior analyst at the consulting firm Green Order, opened by remarking that potentially profitable efficiency gains, as well as consumer demand for environmentally responsible products, have motivated many corporations to “green” their entire supply chains. Cheung added that the development of socially and environmentally responsible supply chains requires dialogue between these retailers, their suppliers, government, NGOs, and consumers.

Bo Li, Executive Director of the NGO Friends of Nature, built on his earlier address on the conflicts between Chinese civil society and multinational corporations, particularly in the case of Apple, to reassert that companies must increase transparency in order to protect workers and enable consumers to make informed decisions.

On smoggy days, the Middle Kingdom looks a little more like Mordor; China's failure to control pollution takes years off the lives of average Beijingers. (Courtesy BBC).

Professor Stephen Ramsey, Senior Visiting Fellow at Yale School of F&ES and former VP of Corporate Environmental Programs at GE, emphasized the basic responsibility of multinational corporations to protect workers’ environmental health and safety by providing adequate training and resources to suppliers. He urged his audience, as future leaders in business and elsewhere, to maintain “an unswerving commitment to integrity” throughout their careers. He also made the key observation that China’s core problem is not insufficient regulations (in fact, their legal protections often match or exceed those in the U.S.) but a lack of enforcement.

Taryn Sullivan, founder and CEO of Efficiency Exchange, which helps Asian manufacturers meet efficiency standards and reduce their environmental impact, noted that inadequate enforcement allows many Chinese factories to appear compliant while flouting regulations. She then asserted that solutions to improve compliance cannot rely entirely on draconian enforcement, but must help suppliers understand a complex web of regulations and train workers in the use of new technologies and procedures. Sullivan also predicted that greater corporate compliance with existing law would be driven as much by investor concerns about supply chain security as public image concerns.

She joined Jack Yeh, VP of Business Development and Sustainability at Four Corners Sourcing, in comparing the power of Chinese and American consumers to pressure retailers to adopt sustainable practices. Yeh noted that many Chinese consumers have too little income  to buy pricier products, even if they are more sustainable. Sullivan predicted that China’s rapidly expanding middle class may have more incentive to make sustainable choices, since factory pollution usually affects their immediate environment.

Later, Yeh shared the story of his interest in sustainability. Yeh, had no previous interest in environmental issues besides a passion for the outdoors, until he realized while working at a furniture manufacturer in China that he could not see the sun; the pollution was so thick that it had literally disappeared. He subsequently became involved with sustainable supplying.  Yeh discussed the inefficacy of a command-and-control regulatory approach in China’s environment of rampant graft and corruption, finally asserting the importance of persuading industry leaders to care about the environmental impact of their decisions.

The panel concluded that greening China’s supply chain will require reducing corruption while increasing transparency, corporate accountability, supplier training, and environmental awareness among consumers and corporate decision-makers.

Ashley Feng ’15 is in Calhoun College. Contact her at ashley.feng@yale.edu.

Tags: , , ,

Comments are closed.