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Lesson 1: In the financial downturn, more than efforts have some legitimacy. But in his experience
ever it’s all about the bottom line. that’s the extreme minority.
Green is the new gold, the current adage says. Lesson 2: Risk-prevention is a motivator
Paul McCann, Director and China General Manager
of Smurfit-Stone, a US company providing pack- Greening is also motivated by risk prevention.
aging solutions for companies manufacturing in Speaking from experience working with multina-
China, says interest in sustainability has been a tionals, the industrial goods manufacturing direc-
growing trend among his company’s clients for the tor says, “Only until you get caught doing some-
last year or two. thing or are worried about getting caught doing
Why the sudden interest? Most companies’ com- something do you worry about green.”
mitment to greening their supply chain is no more Case in point: Wal-Mart. Wal-Mart’s foray into
than a commitment to efficiency and cost-cutting, greening its supply chain has begun to slowly
with green being an added bonus. It’s not that change its reputation from a giant bully with poor
companies suddenly have the urge to go hug a labor practices, to a leader in environmental inno-
tree; it’s because financially these changes made vation.
sense. 2008’s booming commodities market had Companies seeking to avoid risks often look to
a huge impact on companies’ interest in reorganiz- incorporate corporate social responsibility, includ-
ing their supply chains. Rising oil costs impacted ing environmental responsibility, into their supply
the price of other commodities and made recy- chain management. But making a commitment
cling materials and reevaluating sourcing locations to these concerns means that any revelation that
smart financial moves. they are failing to live up to these promises can be
Industry insiders say that in this uncertain eco- a major risk itself.
nomic climate, greening efforts by most compa- Ma Jun, director of the Institute of Public and
nies have to impact on the company’s bottom line; Environmental Affairs, has created maps of air and
otherwise it is not a financially viable direction. water pollution in China, and says companies us-
“Practically speaking, in this finan- ing them to track suppliers do
cial situation it’s going to be tough it to protect their image. “The
for companies to pay more money
If you’re just
potential risk from using very
to be more environmentally friendly,”
the normal
bad polluters, the scandals,
McCann says, “so I think companies
will start with opportunities where be-
provides another source of in-
centive,” he says.
coming more environmentally friendly
sourcing in
But do Chinese companies
also saves them money. It makes
China, you
feel the same sort of risk?
sense right?”
If green is code for cost-cutting,
have zero
While the 2007 Xiamen PX
Plant protest mobilized more
is much of anything in the way of
control over
than 8,000 residents in a move
environmental sustainability actu-
where it is
to shut down a chemically pol-
ally being achieved? Not much, says
one director of an industrial goods
green, and
luting plant there is still not as
much awareness of green sup-
manufacturer who asked to remain
that’s not your
ply chain management in Chi-
unnamed. “If you’re just the normal
concern. Your
na. Aside from Esquel, a Hong
company sourcing in China, you have
zero control over where it is green,
concern is
Kong shirt making company
that has a good record for sus-
and that’s not your concern. Your
best price.
tainability, most Chinese com-
concern is best price.” panies have not incorporated
From the supplier standpoint: CSR in their marketing, Ma Jun
“You’re damned if you do and damned if you don’t. says, so in turn they don’t feel as much pressure
If they [suppliers] became super compliant, the to live up to the hype. “I think that it makes sense
price would just rise and they wouldn’t get any new that those who make an open commitment to take
buys. All the factories would close.” a step forward, to step ahead of the others.”
He concludes, “Everything about green is PR
now.” He acknowledges that for companies with Lesson 3: Greenwashing is prevalent.
large amounts of capital to inject into Chinese sup-
plier infrastructure, perhaps the claims of greening Green. Eco. Environmentally-Friendly. These
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