Chemicals Accelerating our Sustainable Chemicals Management programme

Progressing towards zero discharge of hazardous chemicals

Chemicals surround us in our daily life. Not surprisingly, they are also an integral component in making and washing garments – from helping grow raw materials like cotton, to processes like dyeing or as key ingredients in the laundry products our customers use.

At C&A, we want to make sure chemicals used in making C&A products are safe for people and the planet so we founded, alongside five leading brands, the Zero Discharge of Hazardous Chemicals (ZDHC) Foundation. Today, together with 30 other Signatory Brands, C&A is implementing ZDHC’s Roadmap to Zero framework, where we apply the ‘clean factory’ approach, encouraging the elimination of hazardous chemicals across production for all brands, not just C&A’s production.

Each year we demonstrate our public commitment to the communities where our apparel is produced – and to Greenpeace – by reporting our progress in this detailed report. Along with a full explanation of our chemicals management approach and the progress we make, we also present the challenges we face. Year-on-year performance data is also available on the chemical audits and regular wastewater testing we carry out as part of our SCM programme.

Our approaches to controlling hazardous chemicals

Our approach to Sustainable Chemicals Management

C&A’s holistic approach to chemical management revolves around three areas: input, process, and output management.

Our holistic approach to chemical management

We recognise that our vision of a supply chain with zero discharge of hazardous chemicals cannot be achieved alone. Only with industry efforts, including brands, NGOs, academics, chemical suppliers, and manufacturers, can we drive permanent change. Within each of the above three areas, C&A has focused on developing industry standards, tools, and methodologies, such as our efforts in developing the Sustainable Apparel Coalition’s Higg 3.0 Facility Environmental Module (FEM), the ZDHC Manufacturing Restricted Substances List (MRSL), and the ZDHC Wastewater Guidelines.

We have also created a Minimum Performance Standard as a tool to communicate our expectations in chemical management to our supply chain. All of our facilities under the SCM programme are provided with a rating that encourages them to meet or conduct remediation to ensure the expectations are adhered to. The Standard is updated annually to drive continuous improvement towards ZDHC. And since 2015, all our facilities have been required to disclose their wastewater test reports on the Institute of Environmental Affairs (IPE) website, and required to disclose on the ZDHC Gateway since its beginning.

C&A engages with industry stakeholders such as the Institute of Public and Environmental Affairs (IPE). As part of this engagement, C&A regularly screens our supply chain for environmental violations listed on the IPE website and works jointly to drive remediation across our supply chain in China. This screening extends beyond C&A’s direct suppliers to also cover upstream and downstream suppliers such as chemical formulators, waste disposal operators, and off-site effluent treatment plants. As part of these efforts, C&A has joined the IPE Blue EcoChain tool, which provides automatic notifications to C&A should an environmental violation be detected in the supply chain. This allows C&A to provide an immediate response and work quickly with the facility to remediate the issue.

Input management

Input management is the cornerstone of the SCM programme. The objective of input management is simple: for C&A suppliers to procure chemicals that meet ZDHC requirements. In practice, this means screening and testing chemical products against the requirements of the ZDHC Manufacturing Restricted Substances List (MRSL) and registering the results on the ZDHC Gateway. The Gateway acts as a global database for safer chemistry for C&A suppliers and the industry at large.

To support the identification of safer chemistry, C&A implements a hazard-based Screened Chemistry Programme with several other brands to identify best-in-class and better alternative chemicals. Together, along with the ZDHC Gateway, we provide our suppliers with information on safer chemicals so they can make informed decisions when procuring chemicals.

We are also working globally to engage with key chemical suppliers and formulators to increase the awareness of ZDHC and its requirements, with the aim of increasing knowledge of safer chemistry and driving research and innovation to find suitable alternatives.

Our approach to chemical input management

Process management

Process management is key to ensuring each of our supply chain partners has the necessary personnel, management systems, tools, and expertise to reach ZDHC requirements. In 2015 we developed the SCM Audit where we sent in technical experts to each of our wet production units to assess their current level of performance and create a joint action plan to drive continuous improvement.

In 2019, our auditing approach was replaced with the Higg Index Facility Environmental Module (FEM) 3.0. This assessment builds upon the core aspect of wastewater, chemicals, and environmental management systems we have been addressing since 2015, by expanding into energy, air emissions, water, and environmental permits. To ensure a robust and comprehensive assessment, each production unit is required to conduct third party verification of their assessment at least every two years.

Output management

C&A is committed to report publicly on its progress towards ZDHC. We conduct regular wastewater testing at our production units against the ZDHC Wastewater Guidelines to validate the elimination of hazardous chemicals. By testing raw wastewater for chemicals listed on the ZDHC MRSL, we validate the elimination of hazardous chemicals at individual facilities. If a detection is found, a phase-out plan is created with the production unit to replace the chemical with a safer alternative within the shortest possible timeline.

Additionally, all C&A suppliers communicate their wastewater testing results publicly on the IPE website as well as the ZDHC Gateway. This ensures all relevant stakeholders have access to the progress we are making year-on-year.

Safe products are also an output of a holistic and effective chemical management system. Read our approach to Product Quality and Safety here. In addition, C&A continues to work with ZDHC to create a comprehensive framework for the monitoring of air emissions — going beyond the legal limits C&A currently monitors — with the intent to start implementation in 2021.

Capacity building

We train our suppliers to understand why chemical management matters and what it involves, and to develop the infrastructure they need to reduce their impact. This capacity building covers many different areas, but includes training about which chemicals to use, how to select better alternatives, and how to safely manage chemicals in their operations.

On-the-ground experts conduct frequent site visits to provide any support required and to assess remediation progress and timelines as part of our corrective action plan (CAP) process. C&A also hosts regular meetings at an operational level in our local offices to discuss common issues in the supply chain and develop solutions, and also at a top management and owner level to raise awareness of our requirements.

The SCM programme was built on a foundation of collaboration. From the very beginning, we realised that no brand can achieve zero discharge of hazardous chemicals alone. To that end, we were a founding member of the Zero Discharge of Hazardous Chemicals (ZDHC) Foundation, established in 2012 with the goal of eliminating the use of priority chemicals by:

•    Developing and updating the Manufacturing Restricted Substances List (MRSL) and accompanying guidance on conformity.
•    Identifying safer alternatives for chemicals that are included on the MRSL.
•    Developing a robust chemical assessment process.
•    Monitoring the quality of wastewater from production units and reporting publicly on results.
•    Working towards full transparency of chemical discharge in our supply chain.
•    Empowering our suppliers to move towards zero discharge of hazardous chemicals through capacity building and training.

By using our global size and scale to deliver results in these six areas, our company is going beyond compliance. Ultimately, we are seeking to normalise good practice at C&A suppliers’ factories and across the rest of the industry.

C&A engages with industry stakeholders such as IPE. As part of this engagement, C&A regularly screens our supply chain for environmental violations listed on the IPE website and works jointly to drive remediation across our supply chain in China.

Working with partners to drive improvement
Laudes Foundation^[1] has been working extensively with ZDHC to accelerate, further scale, and drive impact on eliminating the use of hazardous chemicals across global apparel and footwear supply chains.

Continuing the previous ZDHC support provided, Laudes Foundation^[2] had several grants with ZDHC in 2019:

• Five-year strategic growth plan. This plan is enabling ZDHC to prioritise actions and document important milestones, supporting its vision of ‘widespread implementation of sustainable chemistry and best practices in the textile, leather and footwear industries to protect consumers, workers, and the environment’.The Foundation also provided a grant to accelerate plan implementation. This includes demonstrating the enabling role of chemistry, strengthening ZDHC organisational capacity, deepening support in target regions/countries, and promoting continuous improvement in the industry.

Other grants support the development and application of two important tools that have been adopted by C&A for our supply chain:

• ZDHC Gateway – Wastewater Module. One of the barriers to better chemical management is a lack of data to inform and drive wastewater improvement. The Wastewater Module is a disclosure platform for wastewater discharge information that helps factories to disclose timely and accurate information, allows brands to monitor progress throughout the supply chain, and demonstrates accountability to industry stakeholders.
• ZDHC InCheck Tool. Suppliers do not always know how to access alternative chemicals for their production processes. This tool allows manufacturers to create and update a chemical inventory, complete a self-assessment, and source better chemicals.

Read more about Laudes Foundation’s support of ZDHC

^[1]  This work was started by C&A Foundation and continues under Laudes Foundation.

^[2]  This work was started by C&A Foundation and continues under Laudes Foundation.

Zero discharge of hazardous chemicals remains an ambitious target — a target which is regularly updated as we constantly identify additional chemicals to be phased out and replaced by safer alternatives. In 2019, C&A set out to identify a supply chain partner where we could work in collaboration to achieve full ZDHC conformance — a first in the C&A supply chain, and one of the first in the industry.

Across the rest of our supply chain, our primary focus was to accelerate our input management with the aim to map all the chemicals used in our supply chain. This included working closely with ZDHC to populate the gateway, and with our suppliers to upload and register their chemicals to the gateway. When hazardous chemicals are discovered through this process, we are supporting our suppliers in replacing them with safer chemicals where possible, using hazard-based Screen Chemistry to assess chemical products.

Together, these are central components of the C&A SCM Programme, which covers 350 production units from our wet processing units in tier-1 and tier-2 facilities to all nominated fabric mills. Our SCM minimum performance standard, introduced at the end of 2017, is a holistic scoring mechanism that transparently aggregates a facility’s performance across the three pillars of the programme: Input, Process, and Output. The standard also covers remediation, to ensure facilities are continuously working to improve their performance. Requirements are categorised into three groups—Zero Tolerance, Critical, and Major—and each facility is scored based on the number of requirements met.

In 2017, we determined that 71% of our supply chain was not meeting our Minimum Performance Standard, so in 2018 and throughout 2019, we focused on creating impact. This involved special efforts to build knowledge, strengthen skills, and drive remediation in the supply chain. By 2019, the number of facilities not meeting our minimum performance standard was reduced to 15%. The facilities not meeting our requirements were primarily new facilities that were added into the SCM Programme during 2019 and were conducting their first audit and wastewater testing.

Throughout 2019, we conducted:

• 296 self-assessed Higg Index Facility Environmental Modules
• 205 third-party verifications for FEM
• 579 wastewater tests to identify hazardous chemicals in our supply chain
• 296 corrective action plan visits to evaluate efforts towards meeting our SCM programme requirements
• 10 two-day seminars on chemical and wastewater management, training 249 factory staff

2017 represented the first year our facilities were given a SCM performance score based on a standard, and 29% of facilities were found to be meeting our requirements, with the remaining facilities given a clear timeframe for raising their performance to ensure they can continue to work with C&A. During 2017 we determined that significant work was needed to support our supply chain in meeting C&A’s requirements in chemical and environmental management.

Therefore, our focus in 2019 was on enhancing our internal and external support programmes. As a result, 97% of facilities were meeting our requirements by the end of the year. The SCM Minimum Performance Standard becomes more exacting each year, so facilities will continue to be held accountable for any new requirements as well as any required remediation against the 2017 and 2018 standard.

In 2019, the standard underwent an overhaul as we transitioned from our internal chemical audit to the industry-accepted Higg Index FEM. As a result, the methodology of monitoring remediation was updated and becomes incomparable to previous years.

The above results show the SCM remediation programme is working, with further efforts still required to increase the level of performance in line with C&A expectations. As the minimum performance standard rises each year, C&A drives continuous improvement.

Input management

We made significant progress in 2019 in better understanding the challenges of input management as well as advancing industry solutions.

During 2019, C&A globally implemented a Chemical Inventory Management System across 350 production units. This allows us to better understand what chemicals our suppliers purchase and where they come from, and then—by mapping against the ZDHC Gateway—identify their MRSL conformance. This information allows us to then prioritise our engagement with the chemical industry and discuss the industry’s requirements with the goal to increase the number of safer chemicals available on the marketplace.

C&A utilises the ZDHC InCheck tool, a standardised industry approach to monitoring input chemistry. By collecting a facility’s chemical inventory list and screening it against safer chemicals listed in the ZDHC Gateway, the tool identifies the facility’s level of conformance to the MRSL. Each facility is given an InCheck report, which we used to identify and manage progress towards the elimination of hazardous chemicals.

It is vital that the industry have one source of information for conformant chemistry. To address this, in 2017 ZDHC launched the Gateway, a global database of safer chemistry that enables chemical formulators to securely share chemical information with brands and textile, footwear, and leather suppliers, in line with the ZDHC standards. ZDHC brings together a global database of conformant chemistry by recognising 27 existing certifications and testing bodies.

As of the end of 2019, 280 facilities sourced from 3,395 chemical formulators and purchased 18,110 unique chemical products. Using a combination of data from ZDHC Gateway and other public portals, C&A has identified that 28% of these chemical products are MRSL conformant. Not all of these remaining chemicals are necessarily non-conformant, but simply have yet to be certified. From the chemical products used by these facilities, the coverage of ZDHC Gateway was 17%. This demonstrates that the platform is still maturing, but made significant progress in 2019 with the alignment with the industry standard BlueSign.

This experience demonstrates the need to have global alignment on input chemistry in order to engage the long, complex chemical supply chains used by the apparel and textile industry. To this end, C&A continues to engage with our key chemical suppliers, both international and domestic, to introduce the ZDHC requirements, with the aim of publishing their conformant chemistry in the ZDHC Gateway.

Process management
For last few years, we have relied on a comprehensive system of SCM audits to assess a facility’s on-site chemical management system and performance. In 2019, our internal audit system was phased out in favour of the Higg Index FEM industry assessment, which links manufacturers, brands, and retailers together in measuring environmental impacts and provides various training and improvement resources. This module offers a holistic approach beyond chemicals and wastewater—our previous primary focus areas—to include environmental management systems, permits, water, air, wastewater, chemicals, and waste.

Through the Higg Index, we assessed the performance of 296 facilities and found that the top five non-conformances identified in 2019 were:

1. Having a documented process to systematically identify, monitor, and verify compliance with all product Restricted Substances List (RSL)
2. Having a documented process to systematically identify, monitor, and verify compliance with all Manufacturing Restricted Substances List (MRSL)
3. Having well marked, designated chemical storage and temporary storage areas
4. Having the ability to trace all production chemicals from the manufacturing process back to the chemical inventory
5. Training employees responsible for the chemical management system on RSL and MRSL

Once all the non-conformances are identified, the SCM team works with the facilities to implement a corrective action plan and provide technical support wherever needed. To date, the C&A SCM Programme has created 350 corrective action plans that all contribute to the elimination of hazardous chemicals. First, we recognise that production units need to strengthen their management systems and training programmes, which relate to four of the top five issues identified. Second, we need to work with our supply chain to better manage their temporary chemical storage areas.

Overcoming challenges
C&A recognises a knowledge gap in the supply chain needed to overcome many of the issues we had identified through our assessments. Most of the mills, laundries, and printers we work with only have a basic understanding of chemicals issues, and lack the skills and information to make necessary changes.

To meet this challenge, C&A continues to implement a series of global trainings with an expert chemical management consultancy. Over 2 days, we trained more than 249 factory workers on Chemical and Wastewater Management, tackling issues such as how to manage chemicals and hazardous waste throughout the facility, properly handle and dispose of chemicals, conduct chemical risk assessments, create chemical policies and management systems, and address other important knowledge gaps identified during our assessments.

Another challenge is third-party resources. Although some good progress is being made—particularly with the Higg Index 3.0 module — third-party resources in certain countries for chemical assessments and wastewater testing are still in their infancy. High costs and a lack of resources and collaboration are slowing down the kind of progress we need to meet our targets as an industry.

Output management

In 2019, C&A conducted 579 wastewater tests across 18 countries using the methodology listed in the ZDHC Wastewater Guidelines. C&A monitors the raw wastewater within the facility for the detection of any hazardous chemicals present. Since 2018, all our facilities have been required to disclose their wastewater test reports on both the IPE website and ZDHC Gateway.

Overall, C&A analysed nearly 55,000 chemical analytes within the wastewater of our supply chain. C&A had a pass rate of 99.6%, meaning that the majority of the analytes tested were not detected in the wastewater.

Rates of MRSL compliance in raw wastewater by chemical group

2018

358 Facilities

2019

296 Facilities

The 2019 graph reflects the latest raw wastewater test reports from 296 facilities globally using the clean factory approach, meaning results include all production on-site from all brands. Production units that only tested discharge wastewater (e.g. a ZDHC accepted report for another brand) have been excluded in order to create comparable results. Results indicate a positive trend in facilities continuing to identify hazardous chemicals used in their production facilities and phase them out. Ten of the 14 chemical groups now have a failure rate of 5% or less, demonstrating that the majority of facilities have now phased out these chemicals. In 2018, we identified challenges with the phase-out of AP & APEOs and phthalates. Through our remediation efforts, AP & APEOs has decreased from 99 detection in 2018 to 36 detection in 2019 and Phthalates from 90 detections to 32.  

C&A will continue to work with our supply chain, and the chemical industry, to strive towards zero detections of hazardous chemicals in wastewater. C&A’s advances in chemical input management will support this work as it directly tackles the issue at source and works to ensure that facilities know which chemicals are compliant before they are purchased and used.

Industry-wide, apparel suppliers continue to face challenges in substituting safer chemicals. Factors such as the limited availability of viable and cost-effective alternatives, the need for thorough assessment of chemicals thought to be safer, the lack of support from governments, and a need for greater transparency in chemical formulations all present difficulties to the supply chain. At C&A, we are using a variety of approaches—including training, capacity building, and infrastructure changes—to help suppliers address these challenges, while also recognising the broader issues that extend beyond their control.

Input management

Looking ahead to 2020 and beyond, we will continue to work with ZDHC to identify additional chemicals that should be phased-out in the industry. ZDHC has operationalized a robust multi-stakeholder mechanism to update the MRSL which C&A will continue to adopt. We will also continue increasing traceability in our chemical supply chain. C&A will continue mapping our chemical supply chain to better understand what chemical products are being used, where they are coming from, and how they are disposed. This will include focused engagement with our chemical supply chain as we work to identify and phase out hazardous chemicals and to certify safer chemicals to be used in the supply chain, via ZDHC. This is a long process likely to take several years, but can be accelerated with industry action. 

Our efforts to enhance transparency in our chemical supply chain allow us to prioritise our collaborations to create the biggest impact. In 2020 and beyond, we will keep working with key chemical suppliers to drive further adoption of the ZDHC Gateway. We will also continue setting requirements on the usage of chemicals registered in the Gateway for our supply chain. In addition, Screen Chemistry has now been adopted under the ZDHC Framework and is currently under a multi-stakeholder review. Screened Chemistry, which uses a hazards-based approach to chemistry, will continue to play an important role in our future programme as it is critical to ensuring that human health and environmental impacts are fully evaluated before adopting alternative chemistries. This is imperative to avoid regrettable substitutions.

Process management

C&A will continue to drive positive impacts in process management. C&A’s adoption of Higg Index FEM in 2019 provided a holistic assessment of our supply chain’s environmental and chemical performance. C&A will work in partnership with our supply chain on raising their performance in critical areas and continue to benchmark our supply chain’s performance against the industry. Benchmarking by facility type will allow facility managers to compare their performance against that of their peers. The modules will also give manufacturers guidance for improvement and current best practices, while creating opportunities for conversation among supply chain partners so businesses can collectively perform better. In addition, C&A will ensure a robust mechanism to ensure that FEM assessment are complete and accurate. As such, we will continue to require all our production units to conduct regular third-party verification.

C&A identifies the need to have a more robust training platform for chemical management and replace individual brand training, which has been C&A’s previous approach. We will work with our partners, like the ZDHC, to establish a robust training programme that meets the needs of our supply chain and supports in closing the knowledge gap. In addition, facilities will continue to receive on-site expert support via C&A’s SCM team located in all major production countries.

Output management
Alongside a strengthened input management programme, wastewater testing continues to validate that the elimination of hazardous chemicals has been achieved in specific facilities, or reveals their progress towards reaching ZDHC. The major focus in 2020 will continue to be on root-cause analysis – identifying the failing chemical detection back to its original source and looking for alternatives. C&A continues creating phase-out plans for each facility where a failing chemical detection occurs and supporting them in finding alternatives via the ZDHC Gateway.  

Likewise, we remain committed to publicly disclosing wastewater test results using the ZDHC Gateway Wastewater Module and IPE. The Gateway Wastewater Module, funded by Laudes Foundation,^[1] serves as a global portal for verified wastewater results tested against the ZDHC Wastewater Guidelines. It provides suppliers (manufacturing facilities) with an easy way to disclose secured and verified wastewater and sludge data to their clients (brands/retailers), reduce unnecessary testing, and focus on improving the quality of discharge.

Designing products with zero discharge of hazardous chemicals
Our vision is for the global apparel industry to become a circular system, where clothes are designed with their next use in mind. Our Gold level Cradle to Cradle Certified™ T-shirts and jeans, as well as our newer Platinum level Cradle to Cradle Certified™ denim, play a vital role in the certification of safe chemistry. These products are designed and made with fewer, safer chemicals, and complement our overall approach to better chemical management by demonstrating that zero discharge of hazardous chemicals is possible. Our leadership in sustainable chemicals management involves working with suppliers to reduce all hazardous chemicals in their factories, not just the chemicals used for C&A production. In this way and others, we are striving to create a paradigm shift not only in our own supply chain, but across the entire apparel industry.

Read more about our Cradle-to-Cradle Certified™ products

^[1] This work was started by C&A Foundation and continues under Laudes Foundation.