Ho

WWF’s Low Carbon Manufacturing Programme — which targets plastics, electronics and textile firms — aims to entice companies to clean up voluntarily by showing how they can use energy efficiency and pollution reduction to save money and improve operations.

It also holds out another sweetener: the possibility of the plastic firms getting more “green credibility” with consumers and multinational firms looking for suppliers who can prove they have solid environmental track records.

A pilot version with three Hong Kong-based firms, including one plastic injection molder, saw the companies realize average emissions cuts of 12 to 24 percent, with a return on investment of three years or less, said Karen Ho, WWF’s business engagement leader in its Hong Kong office, in an Oct. 29 interview at the Eco Expo Asia trade show in Hong Kong.

WWF, which is a worldwide organization, developed the program in its Hong Kong office.

WWF has only just started the effort, and it’s not clear how many companies in the PRD region, which is centered around Hong Kong and Guangzhou, will ultimately participate.

But the environmental group estimates that if most of the roughly 55,000 Hong Kong-owned factories in the PRD adopt it, the region could cut 74 million metric tons of carbon dioxide emissions each year, or roughly equal to the total greenhouse gas emissions of the Philippines or Austria.

“It is not unachievable,” Ho said. “It represents only 19 percent of the factories’ emissions, so we are not talking about a major reduction of 50 percent.”

Such voluntary programs seem to be gaining favor in South China. Last year, Hong Kong’s government launched a HK$93 million (81.9 million yuan) Cleaner Production Partnership Programme with Guangdong province authorities to provide financial support to factories that voluntarily adopt cleaner production technologies.

One Hong Kong manufacturing official said such voluntary programs have a role to play because Chinese authorities don’t have the resources to effectively monitor the huge manufacturing zones across the border from Hong Kong.

“The laws have been there for some time, [but] mainly it is the enforcement,” said Sunny Chai, chairman of the Hong Kong Green Manufacturers Alliance, in an interview at the Eco Expo Fair. “You need manpower. It is difficult to enforce in all the factories.”

Ho said WWF started the program when it was approached by several Hong Kong manufacturers looking for help in calculating their carbon footprints and making emissions cuts.

The group then secured US$350,000 (2.4 million yuan) from the Green Dragon Fund, part of Hong Kong-based investment advisory firm Bowen Capital Management, and developed the toolkit, including carbon accounting software and handbooks, with help from technical partners, including the Hong Kong Productivity Council.

“Our program is the first in the world to measure carbon emissions on a per-factory basis,” Ho said.

As a result, she said it’s tough to compare the PRD factories to factories in other places for carbon intensity, but she said that the companies that adapt to the low-carbon economy faster will be more competitive in the long run.

Multinational firms are increasingly pressuring their supply chains to reduce carbon footprints.

Wal-Mart, for example, said last year that it wanted its top 200 Chinese suppliers to increase their energy efficiency by 20 percent by 2012. And United Kingdom-based retailer Tesco is beginning the expensive proposition of putting carbon labels on products in its stores.

Ho said WWF’s pilot phase identified some common areas where factories could easily make improvements, such as with improved piping systems, more efficient heaters, or energy-sipping lighting.

The plastics firm that participated in the pilot, Hong Kong-based Item Industries Ltd., found it could save 895,000 yuan a year by implementing 16 measures, with a payback time of three years, WWF said. Item officials did not respond to a request for comment.

The electronics and garment firms that participated in the trial had savings of more than 2 million yuan, with payback times of less than 1.5 years, WWF said.

Ho said the plastics industry is part of the program because it is one of the four most polluting industries in South China.

Initial costs to join the program are about HK$12,000 (10,500 yuan), to cover software and other materials, with additional costs of up to HK$45,000 (39,600 yuan) for factory assessments, followed by costs to implement recommended measures.

Ho said WWF is talking with government agencies and industry associations in Hong Kong and mainland China about how to implement the program more broadly. The city of Shunde, in Guangdong province, is interested in the program to help build a low-carbon economy, she said.

She said it would help if governments could pay some of the costs for companies. The Hong Kong government has decided that companies can use money from its Cleaner Production Partnership Programme to help cover costs of the WWF program, she said.

“If the government can help factories to participate, that will help a lot,” she said.