Full circle - UNIC’s annual sustainability report

4 December 2016

UNIC’s annual sustainability report examines in detail the progress made by the Italian leather industry in moving towards a more environmentally conscious future. The 2016 edition, which has been designed to be much more accessible to laymen than previous issues, also focuses on promoting the industry as an attractive employer for young professionals. The organisation briefs Leather International on recent developments, including a Q&A with leading representatives.

First of all, we would like to underline the fact that, for the last 14 years, UNIC’s annual report has provided a cross-section of the Italian tanning industry’s commitment to sustainability of the industrial products and processes, generating value and goods of absolute excellence.

The undisputed quality, which combines craftsmanship, creative research and innovation, characterises a crucial sector for Made in Italy, which contributes to the success of brands and designers.

The harmonious supply chain is made up of closely interconnected companies, which benefit from the organisation of production in industrial clusters. This model is a key factor in improving leather production processes to ensure minimum environmental impact.

Tanning can be considered a precursor to the ‘circular economy’, since it recovers natural food-industry waste and turns it into a valuable raw material for high-value manufacturing.

Italian tanneries have also managed to use production scraps as secondary raw material (fleshings, say) or directed them to recycling or recovery/reuse (sewage chrome, shavings, packaging and so on), taking advantage of the specific abilities built into the industrial cluster.

Technology, either already in use, or under development, could enable the recovery of matter or energy for the remaining waste, in companies and industrial clusters, with significant improvements in terms of environmental impact and competitiveness.

In line with sustainability policies outlined by the European Parliament, this step requires the activation of legislative and economic tools to support applied research, circulation and industrialisation of innovations and technology. Promotion will also involve institutions, universities and businesses.

Italian tanning has already undertaken this process, resulting in a positive environmental performance. Relevant investments have been made to improve processes and produce leathers whose life cycle has minimum impact on the environment, in particular toward the reduction of energy consumption. In the last decade, Italian tanneries have reduced consumption of water by 18% and energy by 19%.

In 2015, an IND-ECO project co-funded by the European Commission under the Intelligent Energy Europe programme aimed to identify and promote energy efficiency throughout the leather industry, paying particular attention to footwear.

Detailed assessments and auditing were conducted over three years, and precise benchmark, technical and technological solutions and potential financial tools to facilitate investment were discussed.

The Italian tanneries presented 26 projects, the results of which, expressed in terms of energy saving and reduction of CO2 emissions, amounted to 25.312 million kilowatt hours (kWh) and 7,227 tons of CO2 equivalent.

Among the investments made, cogeneration plants are very important, with environmental and cost benefits. Considering the tanning process, which exploits almost equally electric and thermal energy (in 2015, 50.5% and 48.6% respectively), a cogeneration plant increases efficiency significantly by reducing waste.

How does this year’s report differ from last year’s and what has transpired over the course of a year to signal progress?

Since the beginning, UNIC has widened and enriched the contents of the report in terms of analyses, focuses, initiatives and sources each year. It started with a simple environmental monitoring in 2002; recently it has published a study covering all the aspects curently related to sustainability.

The 2016 report goes beyond the tanning industry, focusing attention on supply chain initiatives in order to promote the whole Italian leather system, thanks to new cooperation projects, which aim to promote the entire value chain and ensure sustainability. The document is not only reports important information, but also provides dialogue and cross-sectoral development.

The issues are articulated in four areas:

  • economic and supply chain: in which, as an introduction, macroeconomic data and the Italian leather industry market are described
  • environmental sustainability, with a detailed analysis concerning significant impacts related to the production of leather: water, energy, chemicals, waste water, air emissions, waste generation; the environmental footprint of the product as an innovative and comprehensive approach to assess the environmental compatibility of different items
  • social sustainability: human resources, corporate welfare, health and safety in the workplace, initiatives for the promotion of culture toward the young generations, the code of conduct and UNIC social responsibility
  • production ethics: which includes the issues related to consumer safety, traceability, animal welfare, the declaration of origin and marks for the protection of quality.

Each issue is enriched with insights and examples of best practice. Attention is devoted to voluntary certifications, which are crucial to ensure the credibility, reliability and visibility of Italian tanneries.

‘Sustainability’ for the Italian tanning is not a slogan, but a real commitment. In this sense, ICEC (a quality certification institute for the leather industry) plays a fundamental role. It is the only accredited institution that specialises in leather and, in addition to certification according to recognised international standards (ISO), it has developed its own, specific certification schemes.

An important difference between the 2016 report and previous issues is its approach to communication. Earlier reports were quite long, deeply technical, extremely detailed and mainly intended for scientific research (even in terms of layout), and parts were probably not easily understood by non-experts.

Tanning can be considered a precursor to the ‘circular economy’, since it recovers natural food-industry waste and turns it into a valuable raw material for high-value manufacturing.

In this report, UNIC has chosen a more ‘infographic’ model that is easier to grasp for those with little specialist knowledge. The public is extremely curious about leather, and tanning has suffered a regrettable image for centuries, so UNIC recognises the need to convey clear, concise messages on the industry’s high level of technological development, as well as its social, environmental and ethical concerns.

What main challenges remain and how might they shape the course of 2017?

One of the main challenges is to how to build up concrete actions along the chain, while fully engaging the stakeholders concerned. It requires a lot of effort, but it must be done. 

Chemical aspects are a priority. As an example, the CLEAR project aims to establish a policy shared by tanneries and clients to solve the problems with chemical management, the reliability of analytical tests and the process controls.

CLEAR has so far involved tanneries, Italian and foreign brands, industry experts and CNMI (National Chamber of Italian Fashion), and may now extend to other players.

It sits alongside the Sustainability Guide from the National Chamber of Italian Fashion, which was shared by UNIC to assure the continuous monitoring of results and laboratory performance in order to minimise analytical error margins. UNIC also joined the Zero Discharge of Hazardous Chemicals (ZDHC) programme in October 2016.

Established in 2011, this aims to eliminate certain classes of dangerous substances from textile and footwear/fashion production, activities with which UNIC has decided to become more deeply engaged.

Can you describe UNIC’s involvement with Cotance’s ‘Leather is my Job’ initiative, and what the collaboration aims to achieve?

Participating in the activities promoted by the sectoral employers’ representatives under the European Social Dialogue is vital to supporting the industry’s labour requirements.

During the last few years, despite the rising unemployment rate, recruiting qualified workers has become increasingly difficult for the Italian and European tanning industries. Young people are often unaware of the many career opportunities offered by leather.

For this reason, UNIC invests continually in a number of initiatives and activities in order to highlight the attractiveness of the industry to young professionals. Leather is my Job aims to share best practices as part of the educational activities and guidance as a means of promoting the tanning industry and its career opportunities.

What is your perspective on the future of Italian and European leather on the whole? Can you provide some current data, graphs and statistics to support any trends?

Of course, UNIC’s role is to speak about the Italian tanning industry specifically. The two views about the future are probably not too different, however, as Italy accounts for nearly 65% of the EU’s entire production.

UNIC is optimistic about the future. The Italian tanning industry is lively, as it always has been, and will continue to be, because it is made up of creative and daring entrepreneurs. We are talking about an industry composed of SMEs in which the average workforce is 14 people, that have trade relationships with 130 different countries – from Afghanistan to Zimbabwe – every year.

It is considered one of the global leaders in terms of product quality, design, innovation, technological development, social/environmental commitment. If investment in these aspects continues, Italy’s leadership will be maintained.

In terms of economic results, the current year will probably end up with a limited loss overall for the industry production: it will be 5% in volume and in value, according to actual estimates.

It seems that 2016 has been an opaque year for all the leather industry, however, with just some exceptions at the level of products and segments.

The whole global economy is living an uncertain situation, and next year will probably not be very different. UNIC looks beyond any short-term market difficulties and tries to maintain a clear idea on the sustainable development that must be followed.

Has the 2015 Paris Agreement helped galvanise, or motivate, the tanning industry to become cleaner and more environmentally efficient?

The tanning industry has been working proactively to ensure the environmental sustainability of the entire value-chain for many years. The Paris Agreement is another confirmation that the course undertaken by our industrial sector was the right one at time.

For over three years, UNIC has acted in several contexts to increase awareness of the more efficient practices already adopted by its members to improve their own environmental sustainability.

In 2013, UNIC successfully carried out the tanning industry’s application to the pilot phase of the single market for green products by the European Commission.

 The purpose was to define a unique regulation scheme, and an environmental footprint mode of calculation attributable to the production of finished leather, including the industrial processes of the supply chain upstream of the tanning industry (ranching and slaughter).

The creation of a regulation officially recognised at community level has proved necessary to deal with the proliferation of environmental standards. This trend has limited the growth of the market of so-called ‘green products’ so far. To date, a company intending to communicate that its product has a low environmental impact must choose from a number of more or less accepted standards for each different market.

A further advantage is that Product Environmental Footprint Category Rules (PEFCR) quantifies CO2 emissions and includes analysis of other 14 indicators in order to obtain a global environmental footprint assessment for leather.

During the first year of the pilot phase, UNIC developed a parallel research for Italian tanning industry environmental footprint evaluation. More than 30 Italian tanneries among the three main national districts (Veneto, Tuscany and Campania) collaborated.In early 2014, UNIC started the drafting of a CEN standard for the calculation of the carbon footprint of leather. The peculiarity of this is that the production steps upstream and downstream are excluded from the system boundaries.

This guarantees a focus on the processes under the direct control of tanneries, providing a tool, which maintains communicative sense to customers, and represents an important element to support internal decisions at the same time.

What kind of investments are being injected into Italian leather to comply with regulations, especially in terms of water and solid wastes, biodegradable chemicals and labour?  

Sustainable development is a strategic issue for the companies operating in the sector, particularly those participating in UNIC’s annual sustainability report.

Even during weak business situations, Italian tanneries continue to invest and dedicate significant financial resources to minimise environmental impact, ensure eco-friendly and safe products and guarantee the highest standards of social/labour conditions.

In 2015, the costs related to the sustainability activities performed by an Italian tannery were roughly 4.25% of the turnover, a slightly increase (in percentage terms) on the figures of the previous two years. The entries for environmental investments and operating costs were, as usual, the most significant (94.3% of total).

Wastewater treatment holds the most significant share (64.8%), followed by the operating costs, and refuse and waste management (18.7%). The value-chain and process controls, especially related to chemical products management, will increasingly represent a key factor.

In SMEs, the ability to meet the challenges of the globalised economy is linked to raw materials, production processes, innovation, style and the ability to offer new products and new trends, continuously.

Can you describe the skills gap in Italian leather manufacturing and what is being done, not just to train, but also to inspire people to work in leather?

In SMEs, the ability to meet the challenges of the globalised economy is linked to raw materials, production processes, innovation, style and the ability to offer new products and new trends, continuously.

Most importantly, the skills are ensured by the presence and commitment of highly specialised human resources. Since tanneries need more highly specialised professionals, they foster and increase training at all levels.

The need for production figures is constant, but even the need to invest in qualified resources to meet the requests of business development is increasing.

This requires highly advanced skills and often combines technical and creative or technical-managerial abilities, which are suitable in an extremely internationalised industry that is linked to high-end costumers.

One of the problems the industry is facing is the general turnover at all levels. The lack of young people willing to undertake this type of work is going to be an important factor that needs to be managed properly.

For this reason, UNIC, supported by companies and local governments, promotes guidance of activities involving schools and teachers. The aim is to improve the image of the industry, trying to break down the stereotypes that, unfortunately, it still suffers, and to attract more young people to a career in the tannery.

Since 2012, UNIC has promoted the ‘Amici per la pelle’ project, which aims to explain the tanning industry to secondary-school children and to help spread the culture of leather within local communities, presenting the opportunity of studying and working in a funny and interactive way.

The project provides classroom training sessions and a visit to a tannery, and ends with a creative competition in which students use their manual skills and imagination to create a work using the leather provided by local tanneries following a topic chosen by UNIC.The visit to the tannery represents an important chance for students to discover their territory and its economic resources.

The children have a unique opportunity to dive into all the phases of the leather production process and lessons on safety and environmental issues.

The awards ceremony takes place at Lineapelle, where the children also have the chance to increase their knowledge of the industry by exploring its most important international fair. 

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