Archives for posts with tag: supply chains

 

clothes

Clothing Facts – Should this be on all clothes?

Triple Pundit put together a great series of articles on the sustainability of the fashion industry. With thoughts of Memorial Day, I took a look at the article asking a simple question: Is made in the USA always the most sustainable choice?

The answer it seems is not so clear cut. When it comes to clothes, a number of social and environmental factors play a role in the sustainability of our purchases. Labor concerns are perhaps the most recognizable struggle of the garment industry, and the environmental impacts are nothing to blink at as Triple Pundit points out:

Among the environmental concerns associated with the clothing and textile industry are:

  • Pesticides used to protect textiles can harm wildlife, contaminate water supplies and get into the air and the food we eat.  Cotton is the most pesticide intensive crop in the world
  • Chemicals that are used to bleach and dye textiles are often toxic.
  • Discarded clothing fills up landfills. Americans generate 12.4 million tons of textile waste annually. That means that, on average, every American throws out roughly the equivalent of their own body weight in clothing every year.
  • Textile machinery causes noise, sound and air pollution.
  • Over-usage of natural resources like plants and water depletes or disturbs ecological balance. Most of this usage is in the agricultural phase, with lesser amounts in the production phase and consumption phase for laundering.

These concerns can occur anywhere, though some countries have stronger environmental regulations than others.

Now, by default garments made in the USA must adhere to EPA and local standards regarding waste water as well as labor laws, but this does not mean they have to go organic or have the smallest carbon footprint of anything available on the shelf. One of the questions we have to ask when buying any clothing is – what is it made of?

Organic boyfriend material?

This is where the Triple Pundit article begins to struggle with what the best choices are for the sustainability minded consumer as it begins to delve into the economic consequences of outsourcing manufacturing due to lowered labor costs and how that in turn reduces the power of american consumers to buy made in the USA products as they have higher labor costs and thus higher prices. A vicious cycle indeed.

While articles made in the USA carry less of a carbon footprint in terms of miles traveled, and support our economy locally by paying higher (not necessarily living) wages, these are just some of the many factors to be considered when shopping with sustainability in mind. This is well demonstrated in the OneGreenPlanet guide for those of us looking to wear green, and it considers many of the ‘other’ factors outside of location of creation.

But how about you readers – how much do you consider sustainability when buying clothes? is it all about looks or does your beauty sense go deeper than what covers your skin?  Know of any other resources on where one can shop for green clothes? Do you have any clothing that you consider green or fair trade?

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Going green often starts with what you eat: fair trade tea, organic apples. We buy these products because they reduce impacts on people and planet. But when we go to the Pharmacy to pick up our needed medicines, we often remain uninformed of these issues. Who ever heard of organic Lipitor?

Though the pharmaceutical industry takes great strides to ensure a reliable and safe supply chain as demanded by FDA safety regulations, a lack of awareness of the environmental impacts of the pharmaceutical supply chain led to an atmosphere which made the Heparin Incident possible. People died as a result.

Business for Social Responsibility(BSR), an international NGO dedicated to promoting ethics and environmental sustainability in multinational corporations, created the Pharmaceutical Supply Chain Initiative (PSCI) to address these essential issues. Recently, I had the opportunity to interview Andrew Matthews, Manager of Advisory Services at BSR and discuss their work in this and other areas:

“BSR [does] a lot of different types of work, we do a lot of strategy…number one: how you set your CSR priorities and then integrate those with the core business strategy and measure those over time. And we also do a lot of work with supply chain sustainability so looking at ethics, labor, environment, health, safety and management systems, help companies put the protocols into place to help manage their suppliers in an effective way and further sustainability. My focus, [in addition to] supply chain, is on industry, on healthcare, we focus on social innovation, focusing on emerging markets…”

Andrew was able to draw on his diverse experience of work both internationally and in the investor community in order to further services at BSR. Having worked in a variety of prior roles including a corporate strategy startup in DC where “we helped fortune 500 companies understand the political and economic environments of BRIC countries” and a year teaching English in Malayasia, Andrew has a unique and distinctive perspective on the challenges facing the pharmaceutical industry. His overall trajectory towards corporate social responsibility (CSR) started in college. While researching business ethics he learned “how the private sector was doing a lot to further Millennium Development Goals and was often making a bigger impact, a more measurable impact than non-profits – which was where I was working at the time.” He finds his work at BSR satisfying and empowering as “its really a great marriage of development and private sector financial sector thinking – applying commercial solutions to social problems.” Currently, his work focuses both on healthcare and medical device industry initiatives in addition to PSCI.

On the origins and overall goals of the PSCI, Andrew explained:

“There is an initiative in industry called the Electronic Industry Citizenship Coalition (EICC) and they came together as an industry to understand how they could improve their supply chain, both from procurement and selecting suppliers, and evaluating them in audits, to improving them through supplier capacity building initiatives and monitoring them over time. We saw an opportunity to do that in the pharmaceutical industry. So, in 2006, four companies came together and put together a set of principles that govern responsible supply chain management.  After those principles were released, between ‘07 and ‘09, there was an explosion of interest and now we are up to 17 companies.”

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EICC – Model for BSR’s PSCI

BSR was not satisfied with having simply another declaration that companies could put in their marketing material. BSR wanted to take this out of the boardroom and into the field. Andrew elaborated on this point:

“From the time we set the principles into place, we thought how do we put them into practice. So we launched an audit program, that sends in site auditors preferably with pharmaceutical experience, to look at these suppliers and how they match PSCI principles whether they are living up to them and then they create an audit report that is shared amongst all the members. They evaluate the suppliers against criteria our members have established, which include ethics labor environment, health, safety and management systems. Then we also provide resources for these suppliers to learn more about what they can do related to sustainability, so we have an online library for suppliers, in 2014 we are having teleconferences and a workshop in China actually in 2013 we held a conference in Europe on industrial hygiene and a lot of suppliers in Europe attended that and enjoyed it. We have seen rising interest from suppliers and it’s poised to grow.”

The field of responsible supply chain management is growing, and no sector exemplifies the challenges and possibilities more than that of pharmaceuticals. Understanding the implications of factories on the health of their workers and environment, as well as the multiple different chemical components needed to manufacture a single drug, are the key issues that need addressing in this sector. As the heparin incident exemplifies, these issues can rapidly deteriorate into one where patients are harmed if supply chains are not properly managed. And companies are listening and beginning to engage:

“One of the biggest reasons PSCI members get involved is because they see supply chain as a business risk, because if the supplier explodes, to put it bluntly, will affect the ability to get millions of dollars of product to the market. They see it as a significant risk and take it seriously. They see sustainability more and more as a valid set of issues to take into their analyses.”

As the PSCI eloquently shows, sustainability and collaboration can go hand in hand. Through sharing information, the industry is able to move forward together. While PSCI shares some information publicly, it is hoped that through further transparency and embracing the principles of open source, the entire field of pharmaceutical manufacturing can benefit from the breakthroughs of these leading companies.

Chico and his family

Today marks the 25th anniversary of death of Chico Mendes, a union leader and environmental activist who fought for the protection of the Amazon and pioneered the use of extractive reserves. In a tale that is familiar today, Mendez fought for sustainable use of the forest while cattle ranchers sought to clear the land. As The Guardian reports:

Mendes was an obvious target. As well as lobbying successfully to end international financing for Amazon clearance, he organised the rubber tappers in non-violent resistance. Men, women and children would form human barricades known as “empates” to prevent the bulldozers from tearing down trees. His success made him many enemies and he knew he was a marked man.

His killer was from a family of cattle ranchers, whose efforts to expand their pastures was held up by the empates. Darcy Alves, 22, and his father Darly were convicted in 1990 and jailed for 19 years. Although they are now free, former associates of Mendes said the assassination backfired. “Those who killed Chico got it wrong. They thought by killing him, the tappers’ movement would be demobilised, but they made him immortal. His ideas still have a huge influence,” said Gomercindo Rodriquez, who came to Xapuri as a young agronomist in 1986, and later became Mendes’s trusted adviser.

Mendes wanted the forest to be used sustainably rather than cut off from economic activity (as some environmentalists wanted) or cut down (as the farmers wanted). He proposed the establishment of extractive reserves for tappers, Brazil nut collectors and others who harvested nature in a balanced way. After his death the first of many such reserves in Brazil, the Chico Mendes Extractive Reserve, was created, covering 1m hectares of forest around Xapuri.

After years of decline, the demand for latex from a local condom factory has boosted the price of rubber, and many tappers, who had turned to raising cattle, have returned to the forest. “This is Chico’s legacy,” said Gomercindo. “The extractive reserves have meant the preservation of the forest – all around it has been destroyed for cattle pasture. They have become an example, they now exist in other areas of Brazil.”

A day to remember and reflect on those who fight for the voiceless forest and her downtrodden people. Read more at The Guardian.

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Holes in the heparin supply chain lead to deaths across the US

Dr. Margaret Hamburg, FDA Commissioner, details the FDA’s growing partnership with organizations, health authorities and governments in the Mekong Region to ensure safe food and medicine delivery to the US, while also improving medication reliability in the Mekong. Another highlight of how global supply chains are making national borders less relevant in this post-Westphalian globalized world we live in. The FDA’s cooperation represents a step in the right direction to derive  a benefit both for the US (whose taxpayers fund all this activity) as well as the citizens of the Mekong Region. As Commissioner Hamburg explains:

Though Americans may not often think about it, the U.S. is increasingly and inextricably linked to the Mekong Region through global supply chains. For instance, about 15% of the seafood we consume in the United States comes from Mekong region countries, arriving on our shores and in our stores after a long and circuitous journey. Consider tuna, which may be caught in the South Pacific, transported to New Zealand for pre-canning, and shipped to Southeast Asia for canning before it finally makes its way to the East Coast of the United States for distribution in this country.

Why does this matter to FDA? There is a greater likelihood that food will be exposed to pathogens, contaminants or chemical hazards during a journey of this complexity. That’s why we work closely with our regional counterparts in these countries through such organizations as the Association of Southeast Asian Nations (ASEAN) and the Asia Pacific Economic Cooperation (APEC), sharing with them our own regulatory requirements, our knowledge of good manufacturing practices and our laboratory and inspection techniques. Through such information sharing we believe we can prevent tainted or otherwise unsafe foods from reaching our borders.

But the risk of potentially unsafe food from this area is not our only concern. A significant threat to human safety today involves substandard, falsified and counterfeit medical products that are part of the global supply chain. These products may contain toxic ingredients, or too much or too little of a drug’s active ingredient, and as a result patients could be poisoned or unwittingly receive inadequate treatment for their disease or even no treatment at all. In addition, if too many patients receive only partial treatment, it might foster the development of drug-resistant disease strains. And there’s this too: a high prevalence of substandard and falsified medicines ultimately will erode public trust in the health care system.

See more at: http://blogs.fda.gov/fdavoice/index.php/tag/asia-pacific-economic-cooperation-apec/

With the recent change in guidelines from the AHA and ACC, as many as 70 million Americans may end up taking Statins to reduce their chance of heart attack and stroke. Already, Lipitor (atorvastatin) was the greatest selling medication of modern times with over 40 million Americans taking the drug at its peak. At an average of 20 mg per pill, this resulted in over 292 metric tons of lipitor produced per year*.

At 250 Tons, Hong Kong’s Tian Tan Buddha weighs less than the lipitor consumed every year in the US

Despite this large scale, few outside of the Green Chemistry field are aware of the myriad of environmental impacts from the supply chains used to produce Lipitor.  Creating Lipitor requires a complex series of chemical reactions. Along the way, various different solvents, raw materials and catalysts are needed to finally create the active pharmacological ingredient that can reduce cholesterol in humans.

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Synthesis of Atorvastatin(Lipitor), courtesy of newdrugapprovals.wordpress.com

Acetonitrile is one solvent used in the synthesis of Lipitor. Acetontirile is produced from the catalytic ammoxidation of propylene. Propylene (aka propene) is itself derived from fossil fuels, namely natural gas and coal.  The industrially produced ammonia used in the process comes from Natural Gas. Aside from the odd fact that your cholesterol is lowered at least in part thanks to fossil fuels, there is also the case of the Beijing Olympics.

Beijing’s Air – The Olympics were a temporary respite

Beijing’s notorious air pollution was under the microscope prior to the 2008 Olympic Games. The Chinese authorities instituted a number of measures, such as shutting down factories near the city and reducing car use, to clean up the air. Some of these factories were producers of Acetonitrile. Those closures, combined with the shutdown of Texan facilities impacted by Hurricane Ike, resulted in a global shortage of Acetonitrile.  The shortage of Acetonitrile resulted in a price spike, directly impacting the bottom line of all those that use the solvent, including pharmaceutical companies.

This small lesson highlights how understanding the supply chain of your products could have potentially resulted in avoiding a commodity price spike…and the embarrassing, or potentially liable, connection to worsening health outcomes in heavily polluted developing countries…

On the flip side of these petrochemical derived substances is a potential opening for renewable supplies and green chemistry. Ammonia, which accounts for over 1% of total global energy use, is possible to derive from renewable electricity when using Hydrogen derived by hydrolysis (see Iceland). Propylene is also a target of green chemistry with some companies using microbes to synthesize the needed compound rather than relying on natural gas or coal.

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J. Craig Venter is collaborating with Exxon to create biofuels from algae

But back to Big Pharma. Supply chain accountability starts at the bench: each solvent, catlalyst and substrate has its own set of sources and associated impacts. Following the principles of Green Chemistry keeps the focus in the right direction, but a broader view is needed in the industry to ensure that price spikes such as the Acetonitrile incident don’t happen again. If Acentonitrile came from sustainable sources, or if a green alternative was found, Pharma companies could have used their engagement with the manufacturers to not only show their commitment to the environment but also ensure a reliable source of solvent  with less potential liability from the downstream health effects of their suppliers. And that’s a strategy that works for the triple bottom line.

*Unofficial back of the envelope calculations figuring 20mg avg statin pill API * 1 dose per day * 40,000,000 patients * 365 days/yr = 292,000,000,0000 mg or 292 metric tonnes.

Recently while I was shopping on Amazon for a sustainable source of coffee to satisfy my morning buzz, I came across a coffee shop that was selling unique coffee grown in the Cerrado region of South America. After all I learned of the Cerrado through my XMNR courses, the largest and most ancient grassland savanna that mankind has a privilege to experience, it was upsetting to see someone describing it as “native” because I knew the region needed tremendous industrial transformation of its acidic soil in order to be suitable for growing any products at all. When I asked the seller if it was sustainable, he answered “I would think so, coffee is native to Brazil!!”

Across the web and the grocery aisle, terms like sustainable, natural, and organic have been reduced to marketing phrases. The promulgation of a myriad of labels and standards, together with a lack of transparency on what actually makes a product sustainable, has made it nearly impossible to shop for ethically sourced consumer goods without a masters in sustainability! This is not something we should expect from the average consumer.

Can we seriously know the veracity, sourcing, standards and impacts of every one of these labels?

 

A similar situation existed with medicines in the 1800s. Charlatans of all types sold medicines with wild claims and even those destined for doctors offices could not be assured that what was in them was the actual pharmaceutical. On top of that, a variety of regulations from different states within the US created a dizzying set of standards that essentially made companies selling in multiple states have to create a different type of product for each market, even if it was the same thing they were selling! The situation was dangerous to the public, bad for business, and stymied the progress of medical science. It was not until a coalition of a crusading chemist, women’s activists clubs, and multi-state businesses came together to push the federal government into creating the FDA that the safe foods and effective medications we come to rely upon today were standardized. It was an early example of a cross-sectorial collaboration between the public, business, academia and government – Collective Impact if you will.

A cartoon showing an elephant with a label, Hamlin's Wizard Oil,

Best Pain Remedy on Earth – Yup, sure.

Fast forward to 2013, and we have the multiple sets of organic, rainforest friendly, energy efficient and green labels that confronts and confuse us when we try to make ethically based purchases. It would seem obvious that what we need is an “eFDA”, or at least a set of agreed upon standards that can simply guide us when making purchasing decisions. We need a Nutrition Facts label for sustainability. And just as the Nutrition Facts uses agreed upon scientific standards to show us what is in our food, we need similar standards to show us where our products come from, as well as the environmental, social and economic impacts created in the process of production. Think of how much water to produce a can of beans, or how much energy to manufacture a laptop, or how many trees to create the toilet paper.

Mark Bittman recently wrote in the NYT about his dream food label which would encompass nutrition, “foodness” and welfare in a simplified, standardized label:

EcoLabel

simple and to the point

The most difficult part, and the one with the most opportunity for sustainability professionals is that of “welfare”, which he writes would encompass the following:

“The third is the broadest (and trickiest); we’re calling it “Welfare.” This would include the treatment of workers, animals and the earth. Are workers treated like animals? Are animals produced like widgets? Is environmental damage significant? If the answer to those three questions is “yes” — as it might be, for example, with industrially produced chickens — then the score would be zero, or close to it. If the labor force is treated fairly and animals well, and waste is insignificant or recycled, the score would be higher.”

As Bittman notes, his proposal is not an end but a beginning of the conversation about how to create sustainability food labels. And for sustainability professionals, the subject of unified, simple and effective labeling is one that will require a Collective Impact approach. There is too much competition for grants and market position among for and non-profits alike in the green label field, for the sake of the planet we need to begin to come together around a label we can all agree upon, and read!

Cargill Expands “Responsible Soy” Project To Protect Rainforest

When The Nature Conservancy (TNC) approached Cargill to reduce the impact of Soy farming on deforestation in Brazil, their intent was pure: we need to stop this habitat destruction. Bolstered by Greenpeace’s successful campaign to convince McDonald’s to pressure their beef suppliers, namely Cargill, to reduce the impacts of their cattle feed on deforestion, TNC approached an economically pressured Cargill about how to manage the supply chain of their Brazilian soy production in a way that could reduce the negative impacts to biodiversity in the region.

This well intended partnership, which gave birth to the Responsible Soy program , appeared to be a win-win: Cargill uses its weight in the region to reduce deforestation by buying soy from land that was previously cleared, such as cattle ranches, rather than farms on newly deforested land. And TNC can build on the partnership to expand and partner with other companies, all the while having a positive impact on the Cerrado and Amazon.

But the economics of Soy, driven in large part by a Chinese market demand that values price stability over sustainability, resulted in unintended consquences, as detailed by researchers from McGill:

Soybean cultivation carries the political weight necessary to induce infrastructure improvements, which in turn stimulates crop expansion. Further, Nepstad et al (2006) suggest that growth of the Brazilian soy industry may have indirectly led to the expansion of the cattle herd. According to Nepstad et al (2006), soy has driven up land prices in the Amazon (5–10 fold in many areas of Mato Grosso), allowing many cattle ranchers to sell valuable holdings at enormous capital gains and purchase new land further north and expand their herd further. This hypothesis is consistent with our spatial analysis showing northward displacement of pasture, with declining pasture in parts of Mato Grosso, and increasing pasture further north (figures 1and 4), and also supported by findings from other recent studies (Dros 2004Cattaneo 2008). Our statistical analysis of the relationship between soy/cattle price and deforestation lends further credence to this hypothesis (figure 6). It shows that while the relationship between cattle price and deforestation has been more or less stable, soy has become increasingly related to deforestation over time. In summary, even if the proximate cause of deforestation was mainly ranching, it is likely that soy cultivation is a major underlying cause (http://iopscience.iop.org/1748-9326/5/2/024002/fulltext/)

The lesson is not to get together for a partnership between large corporations and non-profits, if anything the relationship between Cargill and TNC has likely increased environmental awareness within Cargill, a key cultural shift essential to moving us towards a more sustainable planet. The problem lies in creating these partnerships without a consideration of how a change in a major economic player will impact the other parts of the local economy. The economy works much like an ecosystem, you can’t impact one section without changing many others.

Future projects would be wise to consider the downstream envrio-economic impacts that could result from a change in policy among a corporate behemoth in developing economies, and the lessons learned in the Cerrado could then be used to model future plans elsewhere.

Organic. Farm Fresh. Locally grown. These are the hot topics of sustainability. We think about these issues when it comes to our food and our health – but what about our medicines?

Global supply chains produce the cures that sustain us, with multinational pharmaceutical companies drawing on a vast web of manufacturers, raw suppliers, and compounding facilities across the globe. Safety and verification has been the name of the game for those involved in manufacturing drugs, ensuring that what we put in our bodies are the actual pharmacologically active ingredients, following (for the most part) Good Manufacturing Practices. After the infamous Heparin supply incident, where Chinese manufacturers substituted a cheaper alternative to the active ingredient in the ubiquitous blood thinner leading to multiple deaths across the world, the pharmaceutical giants have been especially attentive to guaranteeing that the correct drug is in the pill. When Auret van Heerden discussed the controversy, he traced the supply chain down to the pig farmers in China that provide the raw heparin material from porcine intestines.

Making heparin from pig intestines

When I learned about the ultimate source of the blood thinner millions of patients use every day, I immediately thought – how sustainable are the pig farmers? If this were food, there would certainly be organic alternatives, rainforest friendly heparin, or even bird-friendly blood thinners. Yet the issues of environmental impacts of the Pharmaceutical supply chain remains largely under addressed. Pioneering programs such as Business for Social Responsibility’s Pharmaceutical Supply Chain Initiative seek to address these shortcomings, however hard data and awareness of the Carbon Footprint or conservation impacts of our medicines remains scarce. Does your monthly supply of Lipitor require more energy to manufacture than to power your home?  What do you think?

In the next post, I’ll dive deeper into a single drug case study and illuminate more on just how deep the rabbit hole goes…and why the pharmaceutical industry has so much to gain by addressing these issues.