Sharing knowledge

Currently, tanners undergo rigorous auditing by all their major customers and this means a lot of commitment of resources. However, under the Environmental Forum concept, there would be just one two-day audit a year which would cover all major customer environmental requirements. Some of the world's top brands are already on board and as many brands as possible are being encouraged to sign up. The proposed structure of the protocol is being discussed and agreed through a forum managed by BLC. Representatives from global brands including Nike, Timberland, Clarks, New Balance, Adidas, Marks & Spencer and Lacoste and tanneries including Prime Asia, Shanghai Richina Leather, Curtidos Temola, Sadesa, Stella Simona and Perrin Rostaing are involved and give input and guidance through regular meetings. And it doesn't end with footwear. The potential of the scheme is far reaching with organisations such as IKEA also signing on. According to Betsy Blaisdell of Timberland, once tanners are able to operate to the same protocols year after year, they should be able to improve their performance using their own standards as the benchmark. The knock-on effect would be increased production efficiency. So far, two tanneries have undergone an audit using the proposed protocols and these have provoked a positive feedback. The most recent meeting of interested parties took place at Timberland in the USA in early February and was viewed very positively as 'gaining in momentum'. According to Vikki Addy, BLC, a lot of interest is being shown by other brands and tanners. Sharing knowledge is a prime expectation of the Pentland Group who source shoes as part of their main business. Sheetal Nischall says that they have not had direct dealings with tanners in the past but have identified that environmental problems occur to a greater extent in the tannery rather than in the footwear factory. Through the cooperative venture they hope to learn the best and most appropriate technologies to use in each situation. Nischall believes that from the tanners point of view, a single methodology would help avoid 'audit fatigue'. According to Nischall, there has been a fear expressed by tanners that the audit results will be divulged to competitors' advantage. However, there is no need for concern. Detailed results of the audits will not be shared openly; finished results are owned by the tannery. Elaine Delgado, New Balance, says that she sees it as leaders in the industry wanting to agree a set of common standards for the good of both the leather and footwear industries. She believes that the forum is a very valuable enterprise which includes people on both sides of the fence coming together under one roof to establish the best way forward. Moreover, it will save brands and tanners time and money because when it comes to the time to evaluate the tanneries, the audits will already have been done and the information will already be available. Tanners are also seeing it as a big step forward. Despite the need for tanners to make investments, which implies a cost for them, the investment will help them in the future. Delgado gives credit to Nike, Timberland and SRL who have taken the leadership in the initiative and says: 'We should be doing the same thing in other industries; setting out a common set of standards and a common list of banned substances.' The objective of BLC's Environmental Forum is the development of a standardised environmental auditing protocol for tanneries. A further goal is to promote sustainable business practices in the leather industry. The forum encourages collaboration between tanners and manufacturers. This forum will ensure that valuable resources are targeted on priority issues by streamlining the environmental assessment process. To ensure that the auditing protocol developed is independent and objective, it will be reviewed by an independent body of experts. It is hoped that this new standardised protocol will become common currency amongst the brands and their tanner suppliers ensuring improvements in environmental performance, consistency of measurement and reduced resource requirements for both brand and tanner. According to BLC, 'with the rising profile and value of world brands, there is an increasing need for due diligence in the supply chain. For retailers of leather products, this means looking beyond the product manufacturer to the tanneries that make the leather to ensure they comply with agreed environmental, health and social guidelines.' In recent years, a number of brands have received a bad press for polluting, exploitive or dangerous practices. As a result, footwear manufacturers cannot afford to ignore the possibility of the negative publicity which can occur if inappropriate or inadequate corporate governance puts them in the spotlight. With increasing consumer awareness, this can potentially damage the brand. It is now expected that retailers and brands fully understand the dynamics of their supply chain and its potential impact. Since April 2005, BLC has been coordinating the development of a standardised environmental auditing protocol, designed to meet the requirements of global brands. The protocol will be to use a straightforward approach to cover the essential elements of environmental best practice management in the tannery. The environmental protocol will include an auditing checklist, as well as scoring and reporting mechanisms and agreed structures for audit visits, with a 'one report fits all' approach to tannery environmental audits. According to BLC, both brands and tanners will benefit from reduced manpower required to conduct environmental audits and from reduced costs. For brands, the audits provide an in-depth assessment and measurement of the tanner's environmental/technical processes. Further advantages include the elimination of duplication of auditing for common suppliers and standardised auditing throughout the supply chain. Tanners stand to benefit from a single set of homogenised guidelines and an audit conceived by industry experts ensuring that realistic measures and standards are set. They will also have the opportunity to obtain on-site advice in audits conducted by the BLC. Once the auditing protocol has been developed and field tested by BLC, the concept will be actively promoted to other brands and tanners around the world. The protocol is currently in a final draft form and is being piloted with the tanner members of the forum. It is expected that the forum will have a working auditing and reporting mechanism by summer 2006. The next meeting is scheduled to take place in Hong Kong at the time of the APLF when it is hoped the final agreements will be put in place. The forum is still open to additional brands and tanners who want to have an input on the new protocol. There is a cost of entry to the forum and further details about this are available from Adam Hughes at BLC on +44 1604 679936 or via e-mail on adam@blcleathertech.com The problem Many retailers and brands conduct supplier audits but few visit the tanners as a routine. The auditing of a tannery for environmental impact is a specialist task due to the complex chemistries and the potential risks involved. For example the volume of solid and liquid waste generated by a tannery producing leather from raw hide can be significant. Approximately 80% by volume of the raw material is disposed of as waste and this, combined with effluent treatment sludge, means that up to 50 tonnes of solid waste can be generated each day by large tanners. This, coupled with high water usage, means that tanners can potentially be heavy polluters if their processes are not properly controlled. The objective The objective is to promote best practice in the leather industry by; * Creating alignment on environmental priorities * Bringing visibility to best practices * Focusing on the highest priority issues * Streamlining the environmental assessment process The benefits The concept of a standardised auditing protocol is likely to yield the following benefits for the partners in the development; for the brands * Reduced manpower requirements to conduct environmental audits * Reduced costs to conduct environmental audits * In-depth assessment and measurement of the tanner's technical/environmental process * Elimination of duplication of auditing for common suppliers * Standardised auditing throughout the supply chain for the tanners * Reduced manpower requirements to manage and supervise during environmental audits * Reduced costs when preparing for numerous audits from different brands * One set of guidelines against which tanners need to work * Audits initially conducted by industry experts and hence realistic expectations and measures set * The opportunity for on-site advice from technical experts during the audits if BLC is used and on-going technical support if required