Greening a business from the inside out

It’s not often that businesses get asked by their competitors for help, but Fuji Xerox’s CSR leader Miki Watanabe is finding herself in such a situation where sustainable manufacturing is concerned. Rival firms have been seeking her out, for instance, to get advice on how to create a more sustainable, environmentally friendly supply chain.

The reason Fuji Xerox is in this enviable position - they have much to share.

When in Singapore for a conference on sustainability recently, Japan-based Ms Watanabe told Eco-Business what Fuji Xerox is doing to improve the sustainability of its products, from the materials that go into them and the CSR efforts of suppliers to the disposal of unwanted equipment.

Recently, the company announced it had reached its ‘zero-waste’ target for its own offices and factories, and for the used equipment it collects from customers for recycling. The firm has also made notable inroads on energy management and the efficient use of natural resources.

Ms Watanabe’s specialty - the expertise she flew here from Japan to share - is making sure the materials and services used for manufacturing and distributing Fuji Xerox products are responsibly sourced, a practice known as ethical procurement.

As a starting point, all Fuji Xerox suppliers are asked to complete an extensive corporate social responsibility (CSR) self-check list that assesses the environmental and social impacts of their operations. Those evaluations are followed up with periodic site visits from Fuji Xerox staff, who help suppliers set targets for improvements and identify areas of risk.

The help that Fuji Xerox provides its suppliers on CSR and sustainability issues pays off in the long run by creating a more stable supply chain with fewer risks of disruption.

Ms Watanabe said Fuji Xerox’s president sent a clear message to the presidents of the 300 supply companies that the ethical procurement programme was a necessary step to developing a stable, long term business relationship: “We want to develop our sustainability, so you also need to develop your sustainability.”

If suppliers are having trouble reaching targets, Fuji Xerox will send in a team of experts with a variety of backgrounds, such as human resources, environment, legal and general management, to visit the factories and give advice on site. Site visits are followed by periodic requests for feedback.

The firm also holds CSR seminars for its new suppliers.

Ms Watanabe said that while other companies offer CSR training to their suppliers, they don’t necessarily customise the training to suit their specific needs. Fuji Xerox does.

“We analyse which areas are problem areas, and in China, it is labour issues,” she noted.

Labour conditions a ‘huge business risk’

Labour and human rights issues are on the rise in China, where 80 per cent of Fuji Xerox products are assembled.

Fuji Xerox management has been carefully watching the labour situation in the southern part of China, where high-tech factories are edging out more labour intensive industries such as clothing and toy manufacturing. The company has a supplier located near a factory owned by Foxconn, a Taiwanese-owned electronics firm well-known as an Apple supplier and as the subject of much negative media coverage due to alleged poor working conditions and incidences of worker suicides.

“We hear of a rising trend in suicides in the factories nearby our suppliers, and we worry that it might spread,” noted Ms Watanabe.

She added that the potential instability of suppliers was an unacceptable risk for Fuji Xerox. “Once we have any strikes [affecting] our suppliers, our manufacturing line is going to stop. This is a huge business risk,” she said.

Fuji Xerox is doing what it can to guard against that. Since 2006, the firm has worked with a local NGO called the Institute of Contemporary Observation (ICO) to identify and resolve potential problems. ICO provides advice about the root causes of the labour issues, which include rapid changes in the make-up of the local communities, the shift in skills required by workers for high-tech companies and changing expectations for workers’ rights.

Teams of experts from Fuji Xerox share insight on labour issues from other companies and ICO in small seminars held for top executives from supplier companies.

How have suppliers in China reacted to such efforts?

“We get very positive feedback from our suppliers. One executive, who had previously had a labour issue asked us why we didn’t do this a year earlier,” Ms Watanabe noted.

Compliance from suppliers on labour and other issues is rising steadily. Fuji Xerox’s 2010 sustainability report noted that suppliers, who are all expected to meet priority CSR targets - defined for them by a self-check list that rates 57 items as essential for compliance - had performed significantly better than in the previous year.

Well on its way to meeting its initial target for suppliers, Fuji Xerox has already started moving towards its next set of goals. Once a supplier attains all of the high priority targets outlined on the checklist, Fuji Xerox expects them to address the next 75 items on the list. Recently the company has expanded its targets beyond direct suppliers for production to logistics services.

Ethical procurement is only one aspect of the CSR targets the company has set for itself. The most difficult goal of all, said Ms Watanabe, is the commitment Fuji Xerox has made to reduce carbon dioxide emissions from its entire product life-cycle by 30 per cent from 2005 levels by 2020 – a goal that involves not just decreasing emissions from its own operations and that of its suppliers, but also those of its customers.

The company has spent years working to reduce CO2 emissions from its operations and offices, and the current number is only a small part of the overall figure, she said. “We said we would reduce emissions from our customers by seven million tonnes per year [by 2020]. But we are still establishing a roadmap,” she added.

Accomplishing that requires more than the numerous technology innovations Fuji Xerox provides to manage energy use, according to Ms Watanabe. It requires drastic innovations in work styles such as wide-spread programmes to encourage working from home, she said.

It also requires promoting sustainability to its customers around Asia Pacific.

Greener customers

The key to convincing customers to green their businesses may be Willie Lim, senior manager of the Value and Innovation Business Group for Fuji Xerox Singapore.

Although his job is to create sales leads, he has taken it upon himself to help businesses - customers and non-customers alike - green their offices through a series of free monthly sustainability workshops. The scope of the workshops is not limited to using office equipment efficiently – it includes solutions to common CSR challenges such as power consumption and waste minimisation -  and how to transform into a more efficient workplace.

Mr Lim told Eco-Business he started the workshops in 2009 after observing that many customers needed help going green.

He discovered the main problems were people and their perceptions of green business. “Going green to them was only about the 3R’s – reducing, reusing and recycling,” he said.

People find his workshops useful – and he knows this because he asks every participant – due to the fact that he takes the focus off of reduction and puts it on adding value to the business. “While you reduce the ‘bad’, you also want to increase the good, such as productivity, efficiency and innovation…That’s why the workshop has been well-received,” he said.

Another thing Mr Lim wants to increase is cooperation. He noted that the professionals attending his workshops, who become part of what he calls a company’s ‘green team’, don’t usually work with other departments such as IT, human resources or even CSR. “They work in silos. We teach them how to work together and collaborate,” he said.

Far from being a one-time event, the Go Green workshops are an entry into an informal network for sharing ideas and best practices. Mr Lim said it is common for workshop participants to request a workshop in their own offices for group training that addresses their specific needs.

Mr Lim keeps a database of his trainees – he requests that each of them provide specific goals for their companies – and returns to them for updates on their progress. They, in turn, often come back to him with new challenges and new ideas.

This informal network, which he hopes to turn into an organised forum for green teams to share best practices, is an opportunity for Fuji Xerox to demonstrate the added value it brings to clients – or potential clients, said Mr Lim. “We see a lot of non-customers and even competitors coming to us. This is where they begin to see the difference and the value from Fuji Xerox,” he said.

The Go Green workshops are only held in Singapore at the moment, but Mr Lim has been collaborating with the regional office about replicating the workshops in other parts of Asia Pacific.

Mok Chee Hong, sustainability ambassador for Fuji Xerox Singapore, agrees that the workshops are an effective way of engaging customers. “I personally have come across customers who thought we were just a copier company. They wondered why we were talking about saving paper. After going through that engagement process, they begin to realise that we are doing much more,” he said.

Raising industry standards

Customers are not the only group unaware of the company’s progress on sustainability. Mr Mok was hired as an advocate and networker for Fuji Xerox on sustainability issues, with the aim of helping to drive the company and industry towards higher standards of CSR.  “We found that Fuji Xerox has been doing a lot of things the industry may not know about. Nobody knows that we are achieving 99.8 per cent of recycling of our machines,” he said.

Globally, Fuji Xerox participates in several initiatives to enhance sustainability within the industry. Since 2002, it has been a member of the United Nations Global Compact, a programme aimed at aligning the business practices of corporations around 10 CSR principles. It is also a member of the Electronic Industry Citizenship Coalition (EICC), a group of 40 companies trying to improve the working conditions and environmental performance within the global ICT supply chain.

Mr Mok wants to promote that type of cooperation at the national level by engaging other companies within the industry as well as NGOs within Singapore. He has been working with the Singapore IT Federation (SiTF) to provide a Green IT certification course for professionals. He told Eco-Business he hopes it will lead to the creation of a common lingo and standard among the IT professionals in the industry. There isn’t really an agreed definition for green office equipment globally, and we’re trying it out in Singapore, he said.

The success of these efforts depends on having business leaders who prioritise sustainability, noted Ms Watanabe. “Fuji Xerox is a very open organisation. We have passionate people like Willie and Mok in every region, and we know we need to use their knowledge and their networks,” she said.

She stressed that there were no set rules for how to be a sustainable organisation, and that the company had to establish its own criteria - step by step - and share best practices as it goes along so it could go further. “That’s how we want to be as a company…Our executives really buy into that,” she added.

Mr Lim tries to promote the same leadership within client companies. “Make sure the boss attends. You must set an example from the top,” he tells companies who ask for his workshops.

“In Singapore we are very fortunate. Our managing director, Burt Wong, has a vision for sustainability. Everything we suggest along those [green business] lines gets the green light.”

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