When APEC (Asia-Pacific Economic Cooperation) set forth its initiative called the Green Supply Chain Cooperation Network and took a big leap by establishing its first pilot centre in Tianjin, China, no one foresaw that this port city would be the site of a series of massive explosions in August that killed and injured hundreds of people at one of its container storage stations. While the cause of the explosions was not immediately known, Chinese state media reported that at least the initial blast came from unknown hazardous materials in shipping containers at a plant warehouse owned by Ruihai Logistics, a firms that specializes in handling hazardous materials.
While the incident had fatal results, another truth that remained was that environmental accidents are not the top source of pollutants entering our environment; global supply chains are. In fact, studies have found that supply chain emissions account for approximately 80% of the world’s total carbon footprint and that action is needed to reduce CO2.
Endorsed by APEC leaders in Beijing in November 2014, APEC’s idea for Tianjin – the world’s 10th-largest port city – was to bring together officials, business representatives and researchers to support the growth of the environmentally “green” sector. The goal of this first pilot centre, the Tianjin Green Supply Chain Service Center (TGCC), was to be the first comprehensive service platform of green supply chain management in China. Its purpose is to lay a foundation for the establishment of additional one-stop centres in APEC economies that could serve as a backbone for regional efforts to advance green supply chains under the network.
While catastrophic, the explosion at the Port of Tianjin did not derail the effort. In October, the Sustainability Consortium (TSC) convened the “Sustainable Development and Business Practices – 2015 Green Supply Chain Forum” jointly with TGCC, the China Environmental United Certification Center (CEC), and the Institute of Public and Environmental Affairs (IPE) in Tianjin. Over 200 guests from relevant government departments, NGOs, industry associations and 60 internationally well-known companies attended. Among them were representatives from the Environmental Defense Fund (EDF), Natural Resources Defense Council (NRDC), SEE Conservation, China National Textile and Apparel Council (CNTAC), China Electronics Standardization Association (CESA), Walmart, Apple, Microsoft, H&M, Marks & Spencer, Amazon, Unilever, Huawei, Lenovo, Panasonic, and Toyota.
During one forum session, Guy Robertson, vice president of global sourcing at Walmart, outlined the company’s practice of sustainable development projects on supply chain management and other businesses.
“Walmart has kept good partnership with TSC,” Robertson said. “This May, Walmart Foundation announced a Rmb5 million (US$784,000) grant to TSC to expand its efforts to support Chinese businesses in identifying and capturing sustainability improvement opportunities in Chinese product supply chains. We are really glad to see that TSC has made great progress in this area.”
This is being done by conducting sustainability research in two new key product categories – footwear and large appliances – and by building capacity of consortium partners and related institutions to further TSC objectives. The grant also will help charter a path for future growth.
“At Walmart, sustainability requires collaboration with NGOs, government agencies, suppliers and many other partners, spanning all the major areas of its supply chain, including suppliers, logistics, store operations and customers,” said Robertson. “Over the past year, more than 100 of our largest direct suppliers in China are actively using the sustainability index developed by TSC to evaluate their product sustainability; these efforts reinforce our commitment to help the people of China live better.”
During the forum, Lingling Mu, manager of the Tianjin Green Supply Chain Centre, reported that the next step is to gradually build green supply chain management and product certification system with the participation of government, enterprises and public.
Interest in finding green solutions is increasing in Asia. A study by Accenture claims that consumers in Asia are more willing than shoppers in Western countries to pay an environmentally friendly premium. That report indicates that 84% of consumers in China, India, Malaysia and Singapore would accept a higher price for green products. But in the US, Japan, France and Germany, only 50% of survey respondents said the same.
In Singapore, a non-profit industry-led programme dubbed Green Freight Asia (GFA) brings together experts from companies worldwide to find solutions to lower fuel consumption for trucking across the Asia Pacific region. In fact, this month some 100 experts from more than 70 global, multi-national and local organizations met in Singapore to take part in Green Freight Asia’s annual forum.
Member companies involved in GFA include Hewlett-Packard, Heineken, UPS and DHL.
A key programme at GFA is its GFA Label, which was originally designed to recognize a company’s commitment to green freight practices. Companies report that the GFA Label application also presents a useful guide to understanding necessary measures for improvement.
Other organizations are implementing schemes to implement green supply chains. Asia Cargo News reported earlier this year about the six-year strategic agreement between global forwarder DB Schenker Logistics and container shipping giant Maersk Line relating to the reduction of CO2 emissions from ocean freight. In that agreement, Maersk Line aims to reduce the CO2 emissions of every container it ships on behalf of DB Schenker Logistics between 2015 and 2020 by 20% compared to 2014 levels.
The objective of the six-year agreement is to fuel customers’ interest in sustainable ocean freight on the market by bringing aspects of sustainability into business decision-making processes.
Yusen Logistics, which has facilities across China and the United States, is committed to being an environmentally responsible company by introducing reverse logistics that incorporates closed loop logistics. The goal here is to help companies achieve a zero-landfill end goal. By taking returned goods and recycling and reprocessing the parts, Yusen Logistics can reduce waste and save cost through green innovation.
DHL Supply Chain and Singapore Management University are also working in collaboration in the Green Transformation Lab (GTL) to create solutions that help customers transform their supply chains to become greener, more resource- and cost-efficient, and more sustainable.
By Karen E. Thuermer
Correspondent | Washington