This is a first report from this third-generation private family-run and remarkably progressive Chinese textile manufacturer. The Company operates with around 1,600 employees in Hong Kong and mainland China. A nice touch at the start is an explanation for reporting: to help stakeholders understand the Central Textile impacts and management to "monitor the group’s environmental and social performance in a systematic manner, to see where we are, where we want to go and to set targets." The use of reporting as a management tool and performance driver is often understated, and it is good to see Central Textiles declare that up front. The report opens with a review from the Head of Sustainable Development, a Director of the Company, but there is a noticeable absence of direct address from the Chairman of the Board or CEO of the business. The governance structure is described only partially leaving us guessing as to the real level of control and involvement of the family and/or Board of Directors.
There are so many sustainability issues with the textile and apparel industry, especially in Asia, ranging from repeated supply chain exploitation and human rights violations to the extreme negative impacts of fabrics production, dyeing and processing. Central Textile's report is a refreshing, enlightening and highly inspiring report which addresses these issues and shows real progress. For example: replacement of 130,000 cylindrical cones used in yarn processing with re-usable cones with a 7.5 month payback on investment saving 180,000 lbs of paper waste annually; recycling of cotton yarn "table waste clippings" which would otherwise go to landfill and using 30% of such recycled fabrics in denim production; providing all employees with recycled "lunch bags" instead of the plastic bags they used to bring to the factories; new technology to reduce 99% of indigo dyestuff in wastewater, and re-use of the dye; and more.
Central Textiles is the first company in Asia to receive the Global Recycle Standard and is GOTS certified for organic natural fiber processing.
Whilst environmental impacts are dealt with in great detail, the workplace impact reporting offers room for greater clarity – especially with regard to employee training and development, gender equality (no data of numbers of women in the workforce or in management positions), greater insights into the actual dialogue processes with employees, and employee safety awareness and programs. There is no discussion of community impacts – a significant omission which is also conspicuously absent from the sustainability pillars of the Company. What are the local impacts of the Group's operations on local communities? Does the company contribute in any way to community development or empowerment beyond applying fair employment practices? Is there any form of community investment? These questions remain unanswered in this first report, though 2009 goals include participation in community projects.
Finally, the absence of a materiality analysis can be forgiven in this first report. Beyond what has been reported or mentioned above, additional material indirect impacts might include after-care of fabrics (by now, we are all aware that the use and care of garments often produce a larger carbon footprint than their manufacture), traceability of fabrics and relationships with designers and clients to optimize efficiencies and reduce negative impacts etc.
What strikes me about this report is its modest simplicity, design and plain language which pack in a wealth of information about Central Textiles and its business. A GRI ‘B’ application level self-declared report, there is a clear GRI index and coverage of more than the minimum number of indicators. The report includes some stakeholder quotations, showing the depth of Central Textiles relationships and dialogue.
This is an outstanding and credible first report. Core issues of environmental impacts reported are clearly the result of several years of building a sustainability approach. The Company Code of Conduct has an operational working-document feel about it, in contrast to the high level values-ridden jargon of most Codes – and covers labor conditions, employee rights, communication process of the code, use of licensed computer programs etc. The Group's seven pillars of sustainability have a genuine ring to them and look achievable. The stakeholder engagement section reports results of customer and employee surveys, including explanation of the fact that over 80% of customers believe fabric prices are too expensive, and disclosure that only 96 employees responded to a satisfaction survey (less than 25% response rate on a limited section of the employee population surveyed), conducted for the first time as part of the reporting process). However, those who responded were positive about the Company, and 69% confirmed they would like to take part in the Company's sustainability efforts. The report promises an annual issue, and there is room for optimism that this dynamic Company will continue to expand its sustainability activities - and deliver.
1. Continue to expand the sustainability program and maintain the pace of annual reporting, as promised in this first report.
2. Develop a set of core metrics to track performance in each of the seven pillars of sustainability in subsequent reports.
3. Expand workplace and community impact reporting.
4. Follow a materiality assessment process and prioritize material issues.
Elaine Cohen is the Joint CEO of BeyondBusiness Ltd, www.b-yond.biz, a leading CSR reporting and consulting firm in Israel, specializing in a wide range of consulting services for the development of social and environmental responsibility of businesses.