Taiwan’s Sustainability Challenge
Time to Eat a Green Apple
Source：Designed by CW
Apple is quietly going green, including making new products out of recycled materials and pushing a 100 percent renewable energy goal for its own stores and suppliers. With Taiwan a critical part of Apple’s supply chain, how will it adapt?
Time to Eat a Green AppleBy Elaine Huang
From CommonWealth Magazine (vol. 629 )
The iPhone will be celebrating its 10th anniversary this year, and the big question in the global tech sector is whether Apple’s new-generation iPhone 8 will hit the market in September as scheduled amid rumors of delays.
Garnering less attention in this year of milestones for Apple but perhaps just as important has been the company’s quiet but relentless campaign to go “green.”
In mid-April, many sharp-eyed Apple fans noticed that the logo appearing in Apple Stores had undergone a makeover: the originally white leaf had turned green. Stores also proclaimed that they were at 100% renewable energy usage and prominently displayed “Liam,” the Apple robotic arm that can disassemble an iPhone. Those activities were consistent with past years when Apple Stores “turned green” around Earth Day on April 22.
Just days before Earth Day this year, Apple released its 2017 Environmental Responsibility Report, in which one major focus was moving its global facilities and supply chain to 100 percent renewable energy.
If Apple Can, So Can Its Supply Chain
“Apple is serious about ‘going green’ and making sustainability a key element of the company’s transformation and innovation,” observes Niven Huang, general manager of KPMG Sustainability Consulting in Taiwan. When the Apple report was released, it was a shock to Taiwanese companies in the supply chain, but Huang notes that “if Apple can, then the supply chain has no excuse not to.”
The report also revealed Apple’s goal to reduce its reliance on mining and the use of virgin metals by creating a “closed-loop” supply chain and increase its use of recycled materials in new products.
The “Liam” robot, which has drawn widespread attention, can quickly dismantle an iPhone and separate out high quality components whose valuable metals can be recycled. At present, two Liam disassembly lines can take apart more than 2 million mobile phones a year.
Behind the push by the world’s top tech brand to get greener is a powerful advocate.
That advocate is Lisa Jackson, Apple’s vice president of environment, policy and social initiatives.
Jackson, who served as administrator of the U.S. Environmental Protection Agency for four years before joining Apple in 2013, was originally hired to head Apple’s environmental programs as a “director.” But within three years, she had been promoted to vice president and now reports directly to Apple CEO Tim Cook and the company’s board of directors.
“Apple may have wanted to simply address its environmental problems but later realized that it was an interdepartmental job and closely related to the company’s strategic transformation. It’s clear from the change in Jackson’s position how seriously Apple is about this,” Huang says.
“We still have a long way to go and a lot to learn. But we’re making tremendous progress,” Jackson said in the introduction to the 2017 Environmental Responsibility Report.
Apple’s stated goal is to use 100 percent renewable energy to combat climate change, and it was not far off in 2016, when 96 percent of the electricity Apple used at its global facilities and 100 percent of the power for its data centers, came from renewable energy.
The company’s ultimate goal is for its supply chain to follow Apple’s lead, and because Taiwan represents an important link in that chain, many Taiwanese companies have begun to get greener. How are they going about it?
When asked by CommonWealth Magazine, managers at many Taiwanese companies in Apple’s supply chain declined to answer because of confidentiality agreements with Apple that prohibits them from disclosing the plan’s details. In principle, however, the key elements will be renewable energy, recycling and zero-waste.
Going ‘Green’ Key No. 1: Zero-waste Practices
Some Taiwanese suppliers are already moving in step with Apple on its commitment to generate zero waste.
Apple’s 2017 Progress Report on Supplier Responsibility cited Quanta Computer subsidiary Tech-Com (Shanghai) Computer Co. as one of the success stories in its supply chain, having received UL Zero Waste to Landfill validation in 2016.
When Apple first audited Quanta’s Shanghai factory for waste in 2015, it found that more than 20 percent of the waste being generated was being incinerated or going to landfills.
The factory responded by cooperating with a local recycling facility to sort and recycle the waste generated by the plant’s manufacturing processes. The company also developed an internal process for managing food waste, enabling it to be sent to a local composter rather than a landfill. The process was extended to Quanta’s suppliers to help them collect and reuse packaging materials. In the year since the program has been in place, “Tech-Com has diverted more than 10,000 metric tons of waste from landfills,” the report said.
Going ‘Green’ Key No. 2: Renewable Energy
An Apple analysis found that the electricity used to process raw materials, produce components and assemble finished products was the biggest source of carbon emissions in its supply chain. Consequently, Apple launched a campaign in 2015 to reduce power consumption in the supply chain, helping vendors develop renewable energy options, the most common of them being solar power.
Apple confirmed in its April environmental report that it will invest heavily in solar power in China.
“As part of our clean energy, Apple and our suppliers will generate and procure more than 4 gigawatts of new clean power worldwide by 2020, including 2 gigawatts in China alone, and use it to reduce emissions associated with manufacturing,” the report said.
Hon Hai Precision Industry, known internationally as Foxconn, is Apple’s most important product assembler, and speculation exists that solar power has become one of its top priorities.
In the next few years, Hon Hai intends to build a 200 MW solar power plant to supply electricity to its iPhone assembly plant in Zhengzhou.
“In the past few years, we have worked with our major customers on putting in solar power facilities in Zhengzhou, but we cannot disclose details about specific customers,” says Martin Hsing, the executive director of Foxconn’s Global Social and Environmental Responsibility Committee, in an interview with CommonWealth. To comply with the Chinese government’s emissions reduction regulations, Hon Hai has set a goal of reducing emissions at its facilities in China by 22 percent from 2016 to 2020.
Citing Hon Hai’s massive complex in Longhua in Shenzhen, Hsing says the Longhua plant has begun to recycle the waste oils and fats generated by its cafeteria there.
“We take them to produce biodiesel; we’re able to make five metric tons a day, which gets sent to our company gas stations and used in company cars and shuttle buses inside our complex,” Hsing says.
Hon Hai has also set up a supply management office responsible for helping suppliers with emissions reduction technology and energy solutions, and it even visits suppliers to gauge energy-saving possibilities.
Other Taiwanese suppliers are already moving in step with Apple. Taiwan-based casing maker Catcher Technology and product assembler Compal Electronics were cited in Apple’s 2017 Environmental Responsibility Report as being committed to 100 percent renewable energy for Apple production by 2018.
Going ‘Green’ Key No. 3: Recycling
Also critical to reduction emissions is increasing the use of recycled materials in new products.
“To be honest, the recycling of metals in Taiwanese factories has been a common practice for many years,” says the vice president of a Taiwanese company in Apple’s supply chain. Metal casing manufacturers, he said for example, recycle all of the scrap metal generated in their production processes and reuse it in new finished products.
Hon Hai has long had recyclers take away trim scraps from metal casing production; for aluminum-magnesium alloy casings, the metal has to be first separated from the cutting fluid. The fluid is recycled and reused, while the metal is melted by a recycler and returned to the production line.
For plastic casings, the waste plastic from the edge trim is collected and recycled into pellets in Hon Hai’s plastics application center that are then cast into parts.
“Of course, all of these measures incur costs, but if you want to be a supplier to a company like Apple, you have to do this,” admits a manager at a local Apple supplier, who describes the situation as a challenge but not necessarily a bad thing.
“Seeing Apple engaged in the entire process makes you realize that it is not just about the environment but about the company’s transformation and the change in its business model,” adds KPMG’s Huang.
Taiwanese companies now have no choice but to take the initiative in getting involved because the stakes for them are now higher than ever. How far they go in embracing “green” practices could very well determine whether they survive in the future.
Translated from the Chinese by Luke Sabatier