VF: Stopping Hazardous Chemicals from Entering the Supply Chain

If Mohammed won’t come to the mountain, the mountain must come to Mohammed. And do it in nimble fashion, without requiring massive effort. Sounds impossible, but that’s exactly what apparel giant VF Corporation is trying to do, in eliminating harmful chemicals before they enter the manufacturing stream.

The $11 billion parent company of brands such as North Face, Timberland, Nautica, Lee and Wrangler has debuted a chemical management initiative that could be a game changer for the industry, as it scales the program across its vast supply chain and invites the industry to take advantage of it.

When VF announced its first global sustainability report in October 2014, it also made public the progress it has made with CHEM-IQ, a chemical management program it designed to screen for more than 400 harmful chemicals such as chlorinated solvents and formaldehyde. It says the program is relatively easy to scale up compared to current cumbersome compliance standards that have been hard to understand and apply, because the process is simple.

KISS: Keep it small and simple
The company requests that suppliers fill small vials with samples of each and every chemical used in their factories, which it sends to a designated lab for screening. If “red rated” chemicals are found, VF asks the supplier to switch it with a “green rated” chemical on its preferred list.

The small sample size has helped keep the costs (to the supplier) at below $50 for each chemical to be extracted, shipped and screened — and the effort to a minimum, which have been key to the success of the program and will make it possible to eventually scale it up across its entire supply chain.

VF pilot tested the program with company-owned factories and trusted suppliers in Mexico, Turkey and Los Angeles, and then fine-tuned it before rolling it out across its entire supply chain in China, which included dye houses and laundry and printing facilities, aside from textile suppliers and cut-and-sew factories.

In 2015, it will be launched with suppliers in India, Bangladesh and Vietnam.
Sean Cady, VF’s vice president of product stewardship and sustainability, who is based in Bangkok, describes it as a continuous improvement program, one that keeps evolving as it has ramped up across nearly 2,000 suppliers VF sources from in 60 countries.

Like other apparel companies, VF uses the restricted substances list or RSL, but given the widespread concerns about effluents and chemical use in the industry, it felt the need to go beyond that and find a better solution.

Switch to proactive mode
“We wanted to use our size and scale in the industry to eliminate potentially harmful chemicals before they enter our manufacturing processes, while making the process easier for our suppliers,” Cady says. “We thought about how simple a pH strip is when used in chemistry class and used this as a model to innovate a more actionable chemical management system.”

Cleaving with the industry tradition of closing the barn door after the horse escapes — or in this case, after the chemicals enter the manufacturing stream — VF wants CHEM-IQ to become a proactive process.

“At first we screened the chemicals being used; now we’re working on screening chemicals before they enter our supply chain stream,” Cady says.

In the one year since the program was launched, more than 1,000 chemicals have been screened at 100 factories and about 100 tons of red-rated chemicals have been removed.

Suppliers welcomed clear directive
In the countries where VF has tested it, Cady says suppliers actually welcomed the clarity it brought to the somewhat murky chemical management process.

When the results of the screening are shared, suppliers have often been surprised to discover the presence of certain chemicals, either because they were not chemical experts or because it was present in such minute quantities that it did not make the minimum parts per million when it would have been reported.

VF is conducting training sessions to ease the transition to the new process and Cady says change has been minimal and manageable.

“Overall, the feedback has been very positive from our suppliers, and they are finding it’s more straightforward, actionable and cost-effective than previous approaches,” he reports.

Given VF’s size and heft, suppliers have been cooperative in dealing with the changes and getting on board with screening and switching to safer alternatives. It will also weigh in eventually on how the company judges suppliers on their scorecard, says Letitia Webster, senior director of corporate sustainability at VF.

Webster should know. She started out at North Face in 2000 and eventually headed its well-known sustainability program before she was tapped to spearhead VF Corp.’s corporate-wide sustainability efforts in 2011.

“Back then, we needed something beyond RSL for North Face’s outdoor products that dealt with water resistance and sweat-wicking features, so we found bluesign and we’ve been with them ever since,” Webster recalls.

Chemicals management: a big part of operations
bluesign, the Swiss program that reviews mills’ environmental management systems, ranks chemicals as blue, gray and black. Black-listed chemicals must be substituted, gray chemicals require mills to put in place safeguards for the workers and environment, while blue chemicals are safe to use.

But Webster says it’s an expensive process to bring in experts and get the mill and fabrics bluesign certified, so it wasn’t feasible for VF to try to scale it across its huge supply chain, although North Face is continuing with this process and has about 40 percent of its materials certified.

“For VF, we needed something scalable and simple that could give very clear indication to the mills on what chemicals they could use,” Webster explains. “So that’s how we arrived at CHEM-IQ. We look at things we can control, where we can add value to our partners and we move quickly to scale up the good.”

Along with LEED certified buildings, LED lighting and sourcing sustainable materials, the chemical screening program fit in very well with VF’s overall sustainability strategy and the 3Ps of people, planet and product.

Given that it produces about 30 percent of its products in company-owned factories, VF has had to deal with its own water-quality issues and wastewater treatment plants, so chemical management is a big part of its operations.

“So we kept coming back to chemicals, and once we got CHEM-IQ to work in our facilities, we took it to supplier owned factories,” Webster says.

History of industry-leading initiatives
VF is working on getting the word out to partners and the industry, in the hopes of sharing the chemical screening process, improving on it and helping make it an industry standard eventually.

But Webster points out that it won’t be the first initiative the company has shared with the industry. Timberland created the sustainability green index, which was eventually adopted by the Sustainable Apparel Coalition’s HIGG index assessment tool. And when there was a need to create a sourcing standard for down, North Face put its own resources into creating it because so many of its products used down — and that standard was gifted to the industry and is used by a couple dozen companies that source down.

“We produce more than 500 million products a year, so that’s about 1.5 million that are shipped each day or so. We have about 2,000 tier 1 suppliers, but when you think of the spider web that cascades down from the mills — chemicals and other components — we needed something manageable and CHEM-IQ fit the bill,” Webster explains.

“We’re trying to embed this into the culture of VF, our vendors and our supply chain, so it starts to move the needle in terms of better chemicals,” she adds. “It will start creating demand in terms of ‘how do you create better chemicals’ — and when we do it on our scale, it could be a game changer for the industry.”

Challenges in designing the screening process
It takes two months for the whole process, from sample collection and shipping to lab testing. Chemicals are rated red, yellow or green, suppliers get feedback and are given two months to find an alternative for any red chemicals they use. If they have difficulty finding an acceptable substitute, VF steps in to help.

The process doesn't vary much from country to country, but VF did find more red rated chemicals in China (16 percent), compared to Mexico (10 percent).

Chemicals rated green contain non-detectable or trace amounts of unwanted substances, while red-rated chemicals contain unwanted substances over a specified concentration threshold.

To design the program, VF worked with third-party experts such as the non-profit Natural Resources Defense Council (NRDC) and green chemistry programs at the University of Massachusetts, Lowell and the University of Leeds in the U.K. The outside experts helped develop the list of chemicals, determine what were allowable limits and which chemicals were to be completely eliminated from the supply chain, based on their toxicity and impact on the environment.

“Finding an approach that can work internationally, for suppliers with very different levels of understanding about chemicals and chemical hazards was a challenge,” says Joel Tickner, director of community health and sustainability at the Lowell Center for Sustainable Production, with the University of Massachusetts, Lowell. “Also, VF wanted to test for several hundred chemicals at a very low cost to suppliers, which is quite difficult analytically.”

VF checked in with Tickner and other advisors frequently during the design process, to strengthen it and make it valid and legitimate, and to fill any gaps.

As the company scales it up, Tickner says some challenges it can expect are in terms of finding which chemicals are problematic, the surprises in terms of where they show up, how successful the substitutions are and whether the program reduces the presence of hazardous chemicals overall.

Right now, there are only three labs where the samples can be screened — one each in Germany, Hong Kong and Shanghai.  So samples are often shipped internationally, which Webster admits is a major challenge. But as the process scales up, and more companies adopt it, Cady expects it will be easier to get testing done in local labs that have been approved.

Pointers for others interested
Tickner suggests that any company interested in developing a similar program with measurable results should not try to do everything but adapt to what it can control. And be sure to give suppliers “the training and education necessary to ingrain thinking about safer chemistry at the facility level.”

Cady concurs and adds that companies need to learn to think outside the box in terms of the data needed to take action, seek outside counsel on how to create key changes, and put in the constant effort required to implement it across a complex supply chain.

“It will be really transformational,” Webster says. “It can change how mills approach chemicals management. But it will take a few years to roll it across the industry.”

She emphasizes that chemical management is just one piece of the overall puzzle in moving the whole apparel and textile industry forward, in terms of how leather, apparel, dyes and conflict minerals are sourced.

VF has been meeting with key stakeholders and advisors as it now focuses on ramping up this program internally and engaging other brands and groups, to facilitate wider adoption across the industry. The company is also looking for partners who can manage it for the industry.

“If you are interested, we are happy to share our insights with you, so you don't have to keep reinventing the wheel,” Webster says. “If we can start working together, we can get things streamlined and move quickly, see results sooner. It’s not a perfect program yet, but we have eliminated a lot of chemicals from our supply chain. So that’s the key here, join us on the journey and learn with us.” 

Padma Nagappan is a free-lance writer based in San Diego, Calif.
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