Dhaka, Wednesday, 08 April 2020

Profitability through Less and Better Chemicals

How Bangladesh Companies can turn Detox into a Success Story

How Bangladesh Companies can turn Detox into a Success Story

by Michael Arretz (VFI, Hamburg, Germany) and Reinier de Man (Sustainable Business Development, Leiden, The Netherlands): Large Retailers and Brands do not only exert high pressure on the BD Textile Industry to realise high quality, low production and transport times, but increasingly formulate strong demands on the use of chemicals during the entire production process. In July 2011, the non-governmental organisation Greenpeace launched their so-called Detox campaign and primarily targeted a number of well-known brands such as Nike, Adidas, Puma and H&M. Greenpeace’s successful strategy was to criticize and eventually damage these brands unless the companies were willing to force their suppliers to exclude a number of hazardous chemicals such as azo dyes, alkylphenols or chlorinated solvents. For the companies there was no alternative if they wanted to protect their valuable brands. Not long after the campaign start, a number of companies that chose to commit to Greenpeace’s detox strategy started their own industry association with the remarkable name ZDHC (Zero Discharge of Hazardous Chemicals) for working towards the goals originally set by Greenpeace. ZDHC’s roadmap has become the generally accepted industry strategy and contains the MRSL (Manufacturing Restricted Substances List). ZDHC’s approach has been accepted by other organisations and initiatives, including the German Partnership for Sustainable Textiles, which was founded by the German government and stakeholders after the Rana Plaza accident. [See text box for timeline]

Should Bangladesh textile producers implement the requirements set by ZDHC and the German Partnership? The only sensible answer is yes. The pressure from the market is unanimous and strong. Companies that will not realise conformity with ZDHC will lose their clients. This is not an option. The question, therefore, is not whether or not to implement. The only valid question is how to implement.

Basically, there are two options. The first option is to phase out all chemicals that are on the ZDHC list and to look for alternatives. This may work, but there are two major problems. The first problem is that the alternative chemical may not be as effective as the original chemical and therefore lead to the risk of quality loss. The second problem is that the replacing chemical may be more expensive leading to higher production costs. One could easily end up by lower quality and higher costs, a combination that is never good.

The second option is the only real option: to re-design the entire process (e.g. the dyeing process), taking into account all steps, use of all chemicals, water and energy, the quality of the end product and the resulting waste and waste water streams. Only by doing so, will it be possible to develop profitable scenarios that combine more efficient use of (alternative) chemicals, process changes, wastewater/waste reduction, quality improvement combined with reduced production costs.

The second option is only feasible on the basis of good knowledge and proper management. The first step is a systematic Detox assessment, which generally includes the following or similar steps:

Create transparency about the present situation by documenting MSDS and MRSL, setting up a chemical register and inventory. Chemicals management, including safety, storage and handling, waste management etc.

Process change management: do test of chemicals and waste water, find substitute chemicals and alternative processes where required, including cost calculations. Advancement by conducting self-assessment, training and awareness program etc.

If this is done well, substantial cost savings and quality gains can be the result. However, it requires systematic work and the best available knowledge to reach that goal. Without that, the result may be limited to cost increases without any business advantage.

TEXT BOX 1: Detox - ZDHC

On July 13, 2011, the international NGO Greenpeace launched their so-called Detox campaign. Initially, in their report ‘Dirty Laundry’ Greenpeace focused on toxic water pollution in China. “This water pollution poses serious and immediate threats to both our precious eco-systems and to human health. Urgent and transparent action is needed in order to eliminate the use and release of these hazardous chemicals.” Greenpeace linked a number of highly polluting Chinese factories to well-known brands such as Calvin Klein, Lacoste, Nike and Puma. It attacked the highly visible brands as a lever to change in the virtually invisible (Chinese) textile industry. Greenpeace’s message to the brand owners was positively formulated: “… Greenpeace is calling on the brands and their suppliers … to become the champions for a post-toxic world – by eliminating all releases of hazardous chemicals from their supply chains and their products.” The brands, of course, knew that the implicit message was not friendly at all: “Work with us or we will destroy your multi-billion-dollar brands”.

Greenpeace’s strategy works well, very well. Already in 2011, Niki, Puma, H&M and C&A showed commitment to a Detox strategy, followed by many others, including Marks & Spencer, Zara and Adidas. Six brands then decided to establish their own association for implementing an industry detox strategy: ZDHC, Zero Discharge of Hazardous Chemicals, launched in November 2011. ZDHC’s chemicals strategy (‘roadmap’) built on Greenpeace’s original list and included member obligations on effective actions their supply chains and reporting. The target date for the ‘roadmap’ is 2020. In the 2015 edition of the roadmap, the situation for 2020 with respect to auditing is described as follows: “Standard setting: ZDHC audit is the recognised industry standard. Collaborative implementation: Widespread industry adoption of audit to all tiers of supply chain. Engagement: Key stakeholders advocate for use of the audit protocol within the apparel supply chain.” 2020 will be soon and it looks that reality will be as planned: ZDHC as the global industry standard.

The German government, in cooperation with trade, industry and other stakeholders, set up the Partnership for Sustainable Textiles (‘Textilbündnis’) in 2014, as a reaction to the Rana Plaza accident in 2013. Among many other things, the Partnership’s programme of actions contains a strategy for dealing with toxic chemicals, almost entirely based on ZDHC’s MSRL. Taking the importance of the German market into account, the Partnership’s adoption of ZDHC is very much strengthening its importance. De facto, ZDHC has become a world standard that every textile exporting company must comply with. There is no choice. ZDHC is the minimum standard for market access today.

Text Box 2: CHT

Detox as business opportunity – CHT’s success story

The pressure exerted by NGOs on textile brands and the pressure exerted by brands on the textile producing sector to phase out hazardous chemicals has not only resulted in cost increases but has created great opportunities for innovative companies to increase their market share and to improve their profitability. The chemicals company CHT is one of those players that has developed the increasing market pressure into a business opportunity. CHT is closely working with the ZDHC Gateway – Chemical Module, an advanced search engine for formulations that are conforming to ZDHC’s Manufacturing Restricted Substance List (MSRL)1 ZDHC distinguishes between four conformance levels. The highest level, level 3, includes a site visit to the chemical’s supplier, whereas the levels 0 to 2 contain less demanding requirements2. The CHT Group claims to be in the group of the three best companies with respect to the number of level 3 registered products in the ZDHC gateway. CHT has uploaded more than 750 chemicals for textile application to ZDHC’s gateway, 78% with level 3 conformity.

Eric Knehr, Head of global Brand & Retail Service of Business Field Textile, says, "The high number of approved and top graded CHT products in the ZDHC Gateway is underlining our strong commitment to ecological sustainability". He remarks, "With this significant validated step, as innovative and highly customer-focussed chemical company, we have contributed and still want to contribute to a more sustainable textile and garment production along the value chain. Sustainability is ever since the fundament of the CHT Group. It complies with our culture and our self-perception as a globallyacting company.”

CHT effectively reduces risks for its customers by providing them with the right choice of acceptable chemicals accompanied by indispensable technical information. By doing this, it creates better business opportunities for its clients, the textile producing companies. Companies that can rely on products with level 3 conformity in ZDHC need not worry too much about their acceptability and concentrate on what they are good at: producing high quality textiles for a demanding market.