Textile supply chain EE programme in China is a hit with major brands

08-05-2012, Shanghai, China

In China, where many apparel brands source their goods, a REEEP-funded project with Azure International is working with a group of 13 textile factories to improve their energy efficiency in concrete ways.

The initiative goes hand in glove with the efforts of individual brands to incorporate sustainability into their supplier evaluations. However today in China, the reality is that many factories still lack the capacity to implement energy-efficiency improvements, and financing is also hindered by a lack of baseline date for investment.

Workshops on energy management systems, data collection, management and monitoring and were held in Shanghai on September 28th and 31st October 2011.

The project aim is to work in partnership with four leading international brands (adidas, GAP, H&M and Levi Strauss) to enable their suppliers to identify, finance and implement energy saving projects and to replicate such efforts throughout supply chains in China.  Some of these suppliers have already started to retrofit their premises, and one factory located Beijing estimates they will be able to save at least 700 tonnes of coal per year and approximately 100,000 on their energy bills.

Azure International has approached this project systematically, kicking off with a 60-person Opening Summit in late September 2011 in Shanghai, which featured 12 speakers from participating brands, factories and the International Finance Corporation (IFC,) as well as a range of energy efficiency experts.  This event set the stage for the project and signalled firm buy-in from key partners and stakeholders.
During the same period, Azure officially signed a Memorandum of Understanding with China National Textile and Apparel Council (CNTAC) to work together on REEEP-funded activities to encourage the textile industry to become more energy and water efficient.  Azure also further consulted with IFC to discuss how to transfer the experience and data coming from the project into their work, which looks to transfer financing for EE improvements from local Chinese banks to local enterprises.
These two collaborations enabled Azure and CNTAC experts to assist in delivering a carefully-designed sequence of workshops for textile producers that followed on from the launch Summit.  The first two workshops, conducted by Mr. Yang Ai Min from CNTAC and Mr. An Zhou from Azure  focused on energy management systems, data collection, management and monitoring and were held in Shanghai on September 28th and 31st October.
On 20th December a third workshop highlighting forthcoming Chinese energy policies and  best practices in EE for the textile industry was given.  In early March 2012, Azure concluded the project trainings by holding a back to back, two day training session. On the first day, participants received direct training on energy efficiency measurement, analysis and improvement opportunities during a walk-through energy audit conducted by Azure at participating factory, Changzhou Knitting & Dyeing. The following day’s training provided case studies and discussion questions on action planning to help factories to strategically prioritize and implement their energy savings projects.
Participants have consistently rated the trainings very highly.  For example participants rated the training in EE best practices a 5.4 out of a maximum 6 for its usefulness and relevance to their daily work.

The capacity-building efforts are also having much wider resonance, both directly and indirectly.  Factories are reporting back that the trainings have successfully awareness and capacity on both energy and water efficiency issues. Some have already started to install meters, insulate pipes, and all factories involved in the project have submitted preliminary energy and water data for 2010 as the baseline for measuring further improvements. Finally and perhaps most importantly, two major brands have already indicated they believe that this hands-on approach can be a blueprint for similar programmes within their own supply chains.

“H&M continuously supports multi-stakeholder initiatives aiming to improve environmental performance in the industry,” said Felix Ockborn, Environmental Sustainability Program Developer, “and this project has provided a good platform for dialogue and sharing of best practices among relevant stakeholders. Specifically, it has offered factories the tools and capacity to attract financing options for energy savings projects as well as improve their ability to measure progress and collect relevant data.”

“This is the kind of tipping point intervention that REEEP really enjoys funding,” notes Martin Hiller, REEEP’s Director General. “We’re really pleased to see that Azure have brought CNTAC on board which lends the entire project real weight, and it’s encouraging to see that the systematic approach to capacity-building is already bearing fruit. The fact that brands are showing willingness to up-scale this idea in their own supply chains is really a win-win-win scenario for them, for their suppliers and for consumers.”

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Jenny Chu's picture

Jenny Chu

Senior Energy & Strategy Consultant, Azure International