Search for sustainability: Brazilian Couros' cleaning act

31 May 2018

An industry that has been criticised for chemical pollution, environmental damage and poor working conditions has made great strides in becoming cleaner and more efficient. One company that is helping to set higher standards is Brazil’s JBS Couros. Fernando Bellese, head of marketing and sustainability at the company, explains how the industry has cleaned up its act.

In an industry that spans the globe and has a complex supply chain involving tanneries and processing businesses of different sizes, it is sometimes hard to get a consistent picture of how it performs in regard to sustainability. In some regions, there are still many problems with working conditions and environmental damage, while some of the bigger international companies have invested heavily to ensure that their image – and the image of the industry as a whole – is associated more with efficiency and sustainability.

What is clear, however, is that, step by step and piece by piece, the industry is raising its standards and the efforts made by leading players will encourage smaller operators to follow suit.

“There is still a lot of work to be done, but that is true not only of the leather industry, but also many other industries,” says Fernando Bellese, head of marketing and sustainability at JBS Couros. “There is a global industrial movement towards more sound practices and the leather industry, too, is moving in the right direction. Tanneries across the world are investing in efficiency, supply chain transparency and better working conditions. We are not where we want to be, but we are improving.

“One of the issues that needs to be addressed is engagement with industry representatives in places where the industry is still relatively small and is not doing well in terms of sustainability. That would improve the performance of the industry as a whole.”

Big business model

JBS Couros was created in 2009 as the leather division by JBS and is now the world’s largest leather processing company, with 21 manufacturing units and five distribution centres on four continents. It employs about 9,000 people across the world in the production of wet-blue, semifinished and finished leather for the automotive, furniture, footwear and artefacts industries. Based in Brazil, it can draw on the country’s large domestic herd to feed its production and distribution platforms in the world’s largest consumer markets.

A key part of its business model is the close monitoring of every process, including the transportation, handling and slaughter of animals, and the shipping of skins for tanning. It has a team of trained inspectors to ensure that the right techniques are used at each stage to prevent damage to the leather and to ensure the highest quality in the end product. It is a company that runs on clear and standardised procedures throughout its leather production lines, which are constantly being improved by investment in technology and training.

It is this approach that has helped it to achieve consistent recognition for its operations. In February this year, it achieved the highest ranking from the Leather Working Group (LWG) for traceability for eight out of 15 of its South American plants. The Barra do Garças, Cacoal, Colorado do Oeste, Porangatu and São Luiz de Montes Belos units in Brazil retained their gold medals, while the sites in Uberlândia and Buenos Aires in Argentina retained silver medals. The Campo Grande distribution centre also received a 100% rating following its first audit under the LWG distribution protocol. At every site, all processed leathers were physically marked and traceable.

“You have to believe in what you are doing,” says Bellese. “When the company first started, we decided that sustainability would be a core part of our business strategy. So we can focus on a strategy that builds sustainability and make investments in line with that. Every team member is involved in that effort. It is about having a culture of sustainability throughout the company.

“It has also helped that we are part of a bigger group that is involved in other parts of the supply chain. For instance, we have our own slaughterhouses and we can monitor the individual farms that supply us. Unlike other tanneries, we can monitor factors such as animal welfare.

“We also make investments in sustainability, which begin with R&D, but also have a part to play in product design. We focus on inputs, so that the materials are treated properly. We have also invested in technology to improve working conditions. We are always looking for cleaner production methods, so that we can make more from less and reduce waste.”

Staying ahead of the herd

As a producer, Brazil has a strong track record in sustainability and traceability, which Bellese puts down to the way in which the industry developed. “Brazil does have a good reputation, for many reasons,” he notes. “Firstly, we are a very relevant player in the global industry. We have one of the biggest cattle herds in the world, so there is a high volume of leather processing. That scale allows us to drive the development of new techniques.

“Secondly, the country was previously seen just as a supplier of raw materials, but the industry is now focused on adding value, which includes making finished goods, so Brazil has entered a more competitive market, which meant it needed to improve efficiency, in order to position its products as being better than those of its competitors. That has helped Brazil to realise the importance of quality, responsibility and standards.”

This track record is also due to the fact that the country, and companies like JBS Couros, view sustainability in its broadest context, not simply in terms of the environment. “We have to look at all aspects of sustainability – environmental, economic and social – in an equal way,” Bellese explains. “As a company, we need to be environmentally friendly and profitable, but we also need to treat people well. People are of paramount importance in the business.”

Consequently, the investments made by JBS Couros to maintain, and progress, its standing as a leader in the field are diverse. They target specific issues such as chemical management, for instance, but are also directed towards improving conditions for its workers. Every new installation raises the standards a little higher.

“It is about automation, so that there is chemical waste and there are fewer spills,” remarks Bellese. “We also have machines that run on less energy, need less water and consume a lower volume of chemicals. It is about increasing scale, which is why some of our plants are very large and highly automated to increase efficiency. You must, however, invest in every part of the business. That comes from having the right mindset. Some of our older tanneries may be less efficient, but anything we build new must offer an improvement in terms of both performance and efficiency.

“What all players in the industry must realise is that there is a financial return. Sustainability and efficiency go hand in hand. It is hard to see where one ends and the other begins.”

Collaboration, cooperation and culture

Individual companies can certainly drive higher standards for sustainability, but there is also a need for the industry as a whole to come together to improve its performance. Brazil is making efforts to foster industry-wide collaboration and it has recently joined the Partnership Agreement for the Leather Sector – Sustainability Certification Program as a way to promote sustainable production and transparency, as well as to improve processes and guarantee responsible practices.

The agreement sees two world leaders in the industry – Italy and Brazil – pool their knowledge of sustainable production methods and transparency. Signed in March, during a meeting of the International Council of Tanners (ICT), it embodies a mutual recognition of the voluntary certifications that exist in these countries, which are now seen as robust and complete guarantees around issues of sustainability.

Furthermore, the agreement focuses on all of the environmental, social and economic issues that together make up the definition of sustainability. It is open to future partners to join, so it could well provide a platform to enable the industry to move forward in a concerted and coordinated effort to raise standards. It also gives the industry a means to improve transparency internally and externally, which could go a long way to improving its image among consumers.

“This is certainly a positive move,” says Bellese. “There are many initiatives in many industries that aim to bring good results and provide the tools to improve sustainability. The only problem is that if there are too many initiatives it can be confusing. This partnership agreement, however, does help to communicate the message. The mutual recognition between Brazil and Italy will help to increase transparency about the industry’s operations.”

Companies like JBS Couros will no doubt take the lead in driving sustainability and raising standards, and they have considerable power to influence the industry as a whole, not merely by providing an example of best practices, but also by becoming more competitive and profitable through investments in efficiency. No business can work in isolation, however, and the company recognises that it is essential to work closely with partners to achieve its corporate, environmental and social goals.

“Going forward, we want to have one of the most advanced traceability systems in the industry because transparency is very important,” says Bellese. “There is a pressure to produce more with less all the time, so we want to be more efficient while retaining high quality and remaining competitive. That means having good relationships with our supply chain partners.

“The industry has improved over the past few years – production is up, resource use is down and pollution is falling – but if a manufacturer only uses 60% of a hide, then there is still a big problem. We must, therefore, work across the entire supply chain to get further efficiencies. It is a challenge, but improvement comes from working better together to improve transparency and traceability. We must build long-term relationships with our customers to develop win-win situations and to get better solutions in areas like logistics, as well as developing better products. You need the right mindset to generate improvement in every detail, but you cannot do it on your own.”

Corporate culture and collaboration with supply chain partners are the key ingredients of a business strategy that will help to push the industry forward. When an industry leader says that sustainability is good for business, others should listen.

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