Environmental Compliance

- Aug 23, 2018-

Even though overall ethical scores recorded by TOPWIN auditors in Q3 2018 remain higher than the average 2017 values, it is obvious that manufacturers have failed to maintain the previous quarter's improvement pace. Over a third of factories received "Amber" rankings, indicating that improvements are required in the medium term to prevent further deterioration.

Notably, TOPWIN's latest data highlights a strong correlation between a factory's size and its sustainability profile, echoing the discussion around this topic at the TOPWIN Sustainability Conference held in May 2018 in Hong Kong. For instance, so far in 2018, small factories in Asia consistently fell behind during onsite audits compared to larger factories, scoring some 6.5% lower on social compliance criteria, and 15% lower on environmental issues. In China in particular, smaller factories (employing 150 workers or less), while comprising less than half of all facilities audited for environmental compliance, accounted for more than two-thirds of major non-compliances in H1 2018, with waste management and pollution prevention being the most common issues by far.

That said, Chinese factories of all sizes lag behind the rest of Asia in terms of environmental compliance. During H1 2018, Chinese manufacturers received some of the lowest scores on waste management and pollution prevention among the countries serviced by TOPWIN, scoring on average 21% lower than their counterparts in the rest of Asia. This data indicates that businesses rushing to clean up their supply chains in China before the new round of government inspections should be prepared for an uphill battle.

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