Out of the blue: the sustainability low-down13 June 2019
The leather industry is becoming a champion of sustainability. Companies such as Stahl are showing a commitment to the Paris Agreement on climate change, and the UN’s Sustainable Development Goals are also high on the agenda. We speak to the company’s director of sustainability, Michael Costello, about Stahl’s ambitious goals and policy of transparency.
Companies in every part of the leather supply chain need to focus on sustainability, not only to improve the industry’s reputation, but also to promote efficiency and responsible business practices. Stahl, the world leader in leather chemicals and high-performance coatings, released its 2018 Sustainability Report earlier this year, and the progress it has made serves as an example to other businesses.
The company is open about the emphasis it puts on health and safety, its culture of continuous improvement and its focus on sustainability, and it hopes to drive change by promoting transparency about these issues within the leather industry and, thereby, help it to minimise its environmental footprint.
“Transparency is important,” says Stahl’s director of sustainability, Michael Costello. “If we have an open book on the processes in the leather supply chain then everyone can make better decisions, not just us.
“Stahl has made acquisitions and is three times bigger than it was six years ago,” he adds. “But it was not just about the financials, it was also about having a greater influence on the whole supply chain when it comes to transparency.”
In 2017, Stahl agreed a merger with the leather chemicals business of BASF, which not only had a great reputation as a supplier, but also a track record of strong performance in terms of sustainability. The merger increased the number of factories that Stahl operates, extended the company’s reach into more parts of the manufacturing process, and brought high-performance waterproofing technology into its portfolio.
As the company has grown through such mergers, it has been able to move boldly towards its ambitious sustainability targets, with 2018 marking a year of considerable progress.
Setting milestones for responsible growth
One of Stahl’s key environmental goals is to reduce its carbon dioxide (CO2) emissions by 10% by 2020, compared with the 2015 baseline. In 2018, it recorded another drop in CO2 emissions at its manufacturing sites, driven largely by its strategy of sourcing green energy and investing in long-term efficiencies.
“Since 2015, we have made acquisitions, so our total CO2 emissions have grown because we are a bigger company now,” notes Costello. “But on a like-for-like basis we have already met our target of reducing C02 emissions by 10% since 2015. A lot of things have contributed to that, like sourcing power from green sources, and investing in more efficient equipment and processes.
“In Europe, there is already a good network for renewable energy, and as the business grows, we are generating synergies through economies of scale.
“Process time is a key factor,” he adds.“Technology can increase efficiency, so if you can reduce the time required for a specific process – say from 12 hours to 10 – then you can make big CO2 savings through process efficiency.”
The company’s investment in solar energy at its Brazil site is a concrete example of its long-term commitment to the 2015 Paris Climate Agreement targets, and of its firm belief that using energy more efficiently and opting for renewable energy sources is essential for combatting climate change and lowering its overall environmental footprint.
Since 2017, Stahl has purchased renewable electricity for all of its European manufacturing sites, which account for 34% of the company’s total energy consumption. In 2018, solar panels were installed at the company’s manufacturing site in Portao, Brazil, with a capacity of 840kW. This has accounted for a significant reduction in CO2 emissions for the site in 2019. Depending on the ongoing success of this project, Stahl will formulate plans to introduce solar energy at its other manufacturing sites.
“We are looking at making our own renewable energy,” says Costello. “At Stahl Brazil, we are already making 50% of energy at that plant through solar panels. It may not pay back quickly, but because of the sustainability advantage it is worth the investment. As a company, we will focus on energy self-sufficiency in the future.”
“We must do something about CO2 and climate change,” he stresses. “Investment in projects that have a long payback may be needed in the future, and we will consider them because we are committed to the 2015 Climate Agreement and to the 17 UN Sustainable Development Goals.”
Map out a path for progress
Costello has a right to be proud of Stahl’s progress on carbon emissions, but he is not resting on his laurels.
“We are thinking beyond CO2 now,” he says. “Sustainability is not just about reducing carbon emissions. If the private sector can push ahead with an effective sustainability agenda then politicians and consumers may follow.”
The company has put in place a ‘Materiality Matrix’ to map out its priorities for improving sustainability, and the result is a much broader focus than just the environment, although that remains an important pillar of its strategy.
“The Materiality Matrix is about ensuring that your key stakeholders are giving you feedback, so that you are moving in a direction that they support – and to be clear, I mean stakeholders, not just shareholders,” Costello says. “It keeps you on track. You identify the stakeholders, elicit their feedback on sustainable issues, then plot the responses. We found that safety, health and water were the most important issues, as well as climate change. This is good to hear, as we were already focusing on those topics.”
In terms of water, the focus is firmly on water effluent quality, pollution and technologies that reduce the amount of water the company uses. Stahl has not only made continuous investment in the on-site treatment of waste water but has also introduced effluent-reducing technologies to the markets it serves such as Stahl Neo, Stahl EVO, Proviera – Probiotics for Leather, and Catalix, as well as water-reducing technologies such as Stahl EasyWhite Tan.
The company’s public-private partnerships (PPPs) in India and Ethiopia are also driven by the need to reduce water pollution in leather manufacturing clusters.
“The use of probiotics is an example of technology that reduces the effluent load in the beamhouse process,” explains Costello. “We are replacing traditional materials with something that has less impact on water and its treatment.
“The PPPs we have been part of in recent years are focused on water usage and pollution in tanning clusters, and we have set up Stahl training programmes for those locations, as part of the Stahl Campus initiative, to ensure that good, responsible practices are in place. There is also a strong focus on safety training. We are also working to improve the work environment, and we are looking closely at social, health and gender issues.
“Sustainability is not just about the environment, it is also about choosing to work with responsible companies,” he continues. “The social side is very important. We can set a good example because our main shareholder is French, and legislation in France is very strong on environmental, social and governance (ESG). It is even ahead of EU legislation in some aspects, and we apply that same standard globally.”
Green means go
By acting with a high level of transparency in the area of sustainability, Stahl is helping the industry as a whole to bring to the fore not only environmental issues, but also matters of gender equality, human capital, health, safety and the working environment. In that way, it can help the leather industry to overcome its greatest challenge.
“There is still a belief from some that the leather industry is dirty,” remarks Costello, “and there are some companies in the industry that do not do things the right way, although they are in the minority. However, most companies are very well run, are highly automated, and clean – I have seen tanneries where you could almost eat your dinner off the floor. The industry should reflect and highlight these companies and what they do.
“Initiatives like the Leather Working Group have raised the bar for tanning and environmental stewardship. So, the industry is doing many positive things and it needs to push forward on that and raise awareness of the positive moves that have been made.”
The industry is making great strides in the area of sustainability, though public perception lags behind reality. For Stahl, that challenge is an opportunity to take action and create a better future though long-term investment and a strategy of transparency.
Creating a sustainable supply chain
Stahl’s corporate goal is to achieve a transparent supply chain that continuously reduces its environmental footprint. In particular, the focus is on the supply chain into which Stahl sells its products and services. The company’s strategy to achieve this goal is to initiate activities that promote transparency and to introduce low-impact technologies designed to maximise environmental protection and stewardship. Stahl’s influential position as a provider of products and services to manufacturers of different materials used in the automotive, apparel, home furnishing, footwear, garment and other related industries is an important factor in the implementation of this strategy.
Stahl also recognises that sustainability represents a significant opportunity to gain competitive advantage and drive operational excellence throughout the company. At the corporate level, corporate responsibility and sustainability is represented on Stahl’s executive management team, which meets quarterly and sets the company strategy. The sustainability team also meets regularly with product managers, researchers, and product stewardship and operations staff to monitor implementation, and to discuss progress on new initiatives related to innovation, portfolio management and environmental performance.
Highlights from Stahl’s 2018 corporate responsibility and sustainability report
On target for CO2 emissions goal
With another CO2 emissions reduction in 2018, Stahl is on course to achieve its target set in 2015 of a 10% reduction by 2020. A concrete example of the action taken to reduce carbon emissions is the investment in solar energy at the company’s manufacturing sites in Brazil. As a result, 50% of the electricity consumed will be supplied by solar (renewable) energy.
Phasing out restricted substances
In 2016 Stahl made a commitment to help lead the clothing and footwear industry towards Zero Discharge of Hazardous Chemicals (ZDHC) by eliminating the substances listed on its Manufacturing Restricted Substance List (MRSL) by 2020. In 2018 the company took a big step in this direction by uploading over 1,000 compliant products to the ZDHC Gateway portal.
Partnerships to improve water pollution
In 2018 Stahl launched a public-private partnership in Ethiopia with local leather associations and international NGOs, including international civil society organisation Solidaridad. The project in Ethiopia and the fi ve-year public-private partnership in India – launched in 2017 – are both driven by the need to improve water pollution in identifi ed leather manufacturing clusters. Stahl is dedicating signifi cant resources to these projects; for example, by opening a new Stahl Campus location in Kanpur, where dedicated training on chemicals management and good practices will be realised.