Environment

The man who changed Apple

Meet the environmental expert who digs into data to make China greener

Ma-Jun-Skoll-1 w

Ma Jun: worked with the likes of Tim Cook to green Chinese supply chains

Long before the Chinese government made sustainability a key plank in its policies, Ma Jun, from Qingdao, was forging a unique path that prompted some of the largest global brands, including Apple, Walmart and H&M, to green their supply chains in China. Through making government and corporate environmental data accessible, Ma also built China’s first national-scale, real-time pollution monitoring system, giving the public a tool in the fight against environmental degradation. To date, the database, known as The Blue Map, covers 31 provinces and 338 cities. His 40-person non-profit organisation, The Institute of Public and Environmental Affairs (IPE), has also collected over 1.5 million records of environmental violations by companies, adding to the push for green policymaking in China. Early this month WiC sat down with Ma in Yunnan at Fortune’s Global Sustainability Forum to discuss his activism over more than two decades, as well as his struggles with local governments.

What prompted you to start an environmental NGO?

I worked in the media industry in the 1990s. At that time I had a lot of chances to travel in different parts of China for different stories. In many trips I was struck by the environmental damage, especially the impact on rivers. I put it into a book, China’s Water Crisis, published in 1999. But its readers kept coming back to me, looking for ways to solve the problem. I was challenged. I felt that to solve these problems, we must address their sources, which are always emissions. In the West, NGOs and citizens go to the courts to drive enforcement. In China, there are laws and regulations modelled on those in the West, but environmental enforcement remains weak, and our judicial system doesn’t function the same way. So we need some alternative ways to drive emission control.

Through my experience working at an environmental consulting firm and at Yale University during my fellowship, I came to realise that we need extensive participation to address this problem. I came back to China and decided to build an organisation focusing on environmental transparency, with access to information. We did that in 2006. We spent nine months preparing and launched it in September. We began compiling environmental quality data and, for the first time, violations by corporations. Of course, that’s not the end goal. The end goal is, as I said, to address the source of the problems, and data has a role to play in it.

How does data come into play?

The methodology is quite simple. The big brands have a list of suppliers, and we have a list of violators. Comparing the two you’ll easily identify the problems. And then we have a process of validation, so the brands will need to drive their suppliers to go through that. Through this process we can quantitatively assess who is doing what.

Our approach is mostly doing investigations, and publishing report after report. Usually we’ll contact the brands under our Green Choice Alliance Initiative, where we call for them to “green” their supply chains. It’s like the ‘Chinese dragon lantern’. The head must turn before the tail wags. It’s very hard to do it the other way around because the suppliers are disadvantaged in many ways and they depend on their contracts. Many of them would tell us, even if they want to change, they can’t if the brands only want to buy from the cheapest suppliers. They are worried that if they put money into solving their environmental problems, they won’t be competitive and will then lose contracts. So we hope to turn it around by having brands disqualify those who don’t want to solve their problems, and reward those who do.

How did the big brands respond initially?

Among the first 100 brands that came to us, about 90% were multinational or Sino-foreign joint ventures. At that time the media started paying attention to us because it was the first time that such information in China could be accessed relatively systematically, and our “blacklist” included some of the world’s largest Fortune 500 companies. It’s this “name and shame” approach that prompted some of the largest brands to approach us for the first time.

The multinationals that came to us were not very happy, but more or less they knew that they’d done something wrong and that it was a matter of how to fix those problems.

Later on some local and regional companies would come to us. Unhappy and threatened, they couldn’t figure out what we were up to – thinking we were only digging up their dirt and putting them on a blacklist to get their money.

After all, there were very few environmental NGOs [in China] at that time and people had very little knowledge about them.

But they were not the most difficult companies. The most difficult ones wouldn’t come to us directly. Instead they would approach us through their contacts within the local and central governments and put pressure on us through them. Those enterprises gave us a really hard time. And there were moments we doubted if we could still carry on: 2007-2009 were tough years.

How did you navigate the challenges?

As an NGO, we’re somewhat vulnerable. But several things helped to sustain our operations.

One: our decision to use government data. This is very important. In China, environmental data can be sensitive. But the polluters or their government contacts cannot find ways to challenge us if they realise that it is not us but government sources that put them on the blacklist. Secondly, we provide a path to a solution. The violators don’t just get stuck there; they will be given a chance to explain their grounds and how they are trying to solve their problems through what we call a procedural validation process.

They can say whatever they want to say as long as they put a signature or stamp on a document that will be published side-by-side with some government documents.

We have a document list that they can go through to validate how they have addressed the issue. Or if they have a corrective action plan they want to disclose, we will help. I have also developed a process to deal with validations that come unrealistically soon. I let the violators know that their reports – usually issued by grassroots environmental agencies – will be reviewed by all the Green Choice Alliance signatory NGOs (there are 56 of them now), and if no one objects within seven working days, those factories then can be removed from the list.

Normally people don’t want to deal with so many NGOs, and most choose to go back to our procedural validation process.

How would you describe your relationships with various local governments at the beginning?

Some of them were not very happy. Some gave us pressure, and some gave us a hard time. I still remember the most awkward moment, when some local government officials came to us and demanded we take a factory off the list, citing that we were using their data to fault the factory, when our only aim was to make the information more available.

When was the turning point?

In the early 2010s Beijing suffered from a long stretch of smoggy days and people made their voices heard on the internet, prompting the government to change their environmental policies.

The amount of PM2.5 [one of the most harmful air pollutants] was disclosed, monitored and studied for the first time in 2013. China recorded a concentration of 160 micrograms of PM2.5 in its atmosphere, while the national standard was 35, and the World Health Organisation’s was 10. However, we felt the need to have the sources of PM2.5 disclosed as well. Together with 38 other NGOs we called for the real-time disclosure of this data from emission monitors installed at major factories. To our surprise, the central government produced a by-law requiring this to happen in 2014. We then built a mobile app called The Blue Map, which allows the general public to spot the polluting factories [in red dots] and report them on Weibo. That attracted the attention of the Shandong government, which decided to follow up on all these public complaints. It marked a novel means of interaction between the government and the people on environmental issues. Towards the end of that year the local Environmental Protection Bureau required three shaft furnaces, which could not meet environmental standards, be shut down. That translated to an estimated reduction of 2,600 tonnes of sulphur dioxide and 405 trillion micrograms of PM2.5.

We’ve always had quite good relationship with the central government, but this was the moment when we started getting the local governments to work with us willingly. Following Shandong, Beijing and Zhejiang were the most active ones to fight pollution. And now there are more following suit.

Apple was among the many global brands that you engaged with. How was that experience?

It took a year and a half to convince Apple to motivate its suppliers to take action. At the beginning they replied to us straightforwardly that they had a long-term policy of not disclosing their suppliers. And they wouldn’t even respond to the most basic questions. So we conducted research with our partners and published two reports. After we published the second report documenting another 20 suppliers with some very severe problems, we got a message from Apple saying that they would like to have a conversation. Toward the end of a five-hour meeting at Apple’s head office in Cupertino, we got a statement from its senior management saying that Apple believed it needed a certain level of transparency in its supply chain management.

It was a turning point. Since then Apple has been working diligently, motivating hundreds of their suppliers – not just electronics factories, but also all the metal processing factories, and the PCB (printed circuit board) manufacturers, metal and aluminium manufacturers – to resolve their violation problems. Some of them even dealt with legacy issues by dredging lakes to get rid of metals and cleaning up the rivers. It’s quite an amazing achievement.

What about other brands?

Apple serves as a benchmark for many other brands, so it was helpful when it turned around. Marks & Spencer, likewise, took action after a report we published. Through our investigation they realised that they actually had more than a thousand suppliers. They then started comparing their lists with ours, coordinated their regional sourcing teams and eventually cutting down their number of suppliers in China quite significantly – using environmental quality as a criterion.

We also have other leadership brands like Nike, which finds our data helpful and is happy to confront the problems.

But there are actually very few firms that really want to do that. We are assessing some 370 brands, both local and global, but only 70 of them are really active, while the rest of them take very few actions. Things have improved, but we know that we have had more failures than successes so far.

Do you have any tangible measurements of your progress?

We have several indexes co-developed with the Natural Resources Defence Council, a US-based NGO. The first one is the Pollution Information Transparency Index, launched in 2009. It charts the historic progress made in China in terms of pollution source supervision information disclosure. In the first year there were only 2,000 such records. That number rose to 69,000 in 2016, 160,000 in 2017, and 330,000 last year. To date we have 1.5 million and it will continue to grow this year. Through this process we help to identify the issues and share best practices. Gradually, we are seeing an increase in transparency.

Secondly, we have the Green Supply Chain Corporate Information Transparency Index, which assesses brands’ supply chains by their environmental compliance levels, corrective actions, responsiveness, energy conservation and emission reduction performances, as well as other relevant disclosures. Through this process, we managed to get 100 brands to motivate their suppliers to solve their environmental problems. The cumulative number of suppliers pushed by Chinese and international brands has reached 8,500. Everyday they’re driving their suppliers to us. I think it’s very unusual for an NGO to be able to interact with so many factories. We don’t have any administrative power, but through leveraging the power of data and big brands, these suppliers just keep coming to us.

Are China’s rivers getting cleaner?

The surface water quality is getting better, drinking water sources are under tighter control, and some of the problems we have documented – more than 7,000 – were identified by the central government for inspection. More than 2,000 of the dirtiest rivers and canals in urban districts are being cleaned up at this moment.

Having said that, the progress is less remarkable compared to the fight against air pollution. Our aquifers and groundwater quality are still deteriorating. Up to 85% of the monitoring points show that they are in bad or very bad shape. And the rivers in the north such as the Hai River, Huai River and Liao River are more polluted than the Yellow River. Some of them are almost like open sewers. The Yangtze River is one of the better ones given that it has so much more water [to dilute the toxins]. That said, it’s receiving 40% of the discharge in China.

What are the ways to tackle farming-related water pollution?

Unlike what many people think, pesticides and fertilisers are not the only sources of pollution when it comes to agriculture. The biggest source is actually livestock farming, which makes up 90% of the discharge in the countryside. But as China is moving towards larger livestock farms, which have little difference from factories, we can take them as point sources and monitor and supervise them. As for resolving the issue of pesticides and chemical fertilisers, we need to move to sustainable consumption. We need to raise awareness among consumers that pesticides contaminate the food chain. The problem is that in China there’s no credible labelling of food products. Following some scandals, people are cynical about green labels in China. It’s important to build that trust again and let market forces drive down the use of chemical fertilisers.

What are your goals in the next few years?

Tackling factory farms is on our list. We’d also like to work more on consumer action, calling for people to use their buying power to influence companies. It’s part of the mission of our Green Choice Alliance, launched in 2007. But we haven’t been very successful in this area so far. With e-commerce platforms, I think, finally, there’s a possibility for us to reach hundreds of millions and engage them. Ultimately, the driving force needs to come from the people.

Another exciting development is green finance. Our data is shared on the platform of China’s Green Finance Committee, of which we are a member. All three domestic green bond auditors have tapped it already. And some major banks are using it for their banking services or investments. We’re talking about companies who want to borrow money, and the banks then use our data as part of their due diligence. Some of them even drive their potential borrowers to go through our validation process.

How optimistic are you on sustainability in China?

Enforcement used to be the biggest bottleneck in environmental protection. I think that has very much been relieved. The government has moved forward with inspections and a new environmental protection law has been in place since 2015. All of this is very helpful. But I have to say the costs of violation are still lower than compliance. I believe that we need other stakeholders to join in to help raise those costs – through green supply chain, green sourcing, green consumption, and green finance – and in rewarding those who want to be responsible, so that we can level the playing field and change the dynamic.

In the second half of last year we also saw a relaxation of some of the enforcement of controls in some areas, due to the economic downturn and the potential consequences of the trade war. So, I think that now there’s a bigger need for the industry to join their efforts. We don’t want to see things going back to the old way. That is not in the interests of anyone.


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