The leather material supply chain is complex creating multiple challenges for leather product importers as it is traditionally horizontal with many middleman and transformation steps where issues can occur. Everything from climate change to dangerous working conditions for staff can affect the supply chain, and cause importers problems.
If your brand is importing leather material products, this post will highlight some of the main issues that you should be aware of, and provide guidance as to how these can be mitigated or overcome to get production and quality under control.
Image above: Moroccan leather piled up in the sun.
Why is leather’s supply chain prone to sustainability issues?
Leather’s supply chain is complex, and exposed to a range of diverse factors which can have consequences on the quality of the leather. These factors are ranging from human treatment of animals to the country of origin and its level of regulation on animal by-products, regulation enforcement for animal welfare and pollution, to cultural practices, through to out of control environmental factors such as climate change.
Adding to the opacity of the production chain is the fact that leather production is mostly a horizontal process across several countries depending on the transformation step. Looking at rawhide sourcing, the ability to identify the animal’s origin (cattle, wild, “semi-wild”) can be extremely difficult. For example, cowhides are collected by the middleman in India touring their network of local butchers who are processing cattle, or “wild” city cows. Then, the middleman sells his rawhide to a tannery for blue processing or finished hide processing.
Fundamentally, as an importer, you are probably not in control of many of the stages of leather production unless you own the entire supply chain (which is unlikely, although we’ll come on to how this is possible and its benefits and drawbacks later on).
There are three stages of producing leather products: Obtaining raw materials, leather production (using tanning, crusting, and finishing processes), and producing the finished goods, for instance, shoes. However, this entire process is made up of seven distinct parts:
- Rearing livestock, catching wild animal (often done for meat with leather as the co-product)
- Preparing the hides/skins
- Finishing the leather
- Making the product
As with many materials, the more complex the supply chain, the higher the chance of problems, and the production of leather requires the material to go through a lot of steps before your products can be made, most of which beyond the reach of control.
Let’s explore some of the common sustainability issues encountered at the two stages leather material passes through before you take delivery of it, and proceed to make your goods, in order to be able to anticipate common issues that may negatively affect leather importers before they occur:
1. Issues Encountered When Obtaining the raw materials
The availability of the skins or hides for leather material that you require is affected by environmental factors common to the main producing countries and regions, such as:
- Climate change
- Water scarcity
- Environmental pollution
- Nutrition of the animals (the faster the growth, less scarring)
- Living conditions of the animals (will their skins or hides be marked with scars or age-related damage?)
In addition, these human factors also play a part in affecting the leather supply chain:
- Human rights
- Effects on local populations – noise, pollution, buying up of land
- Safety of workers
With such a large number of possible external issues that can affect your supply chain, it’s no wonder that leather is a raw material which causes importers such problems to source, in particular in an ethical way.
The Developing World Is Great For Low Prices, But Provides Many CSR Challenges
Leather materials are global products, and where you source from will have an effect on your leather supply chain robustness and sustainability. For instance, the supply chain in Italy, a large producer of leather in Europe, might not suffer from the same issues regarding worker welfare and human rights as are more common in, say, Brazil. An example of this would be the use of child labour in the leather supply chain.
Given that the developing world offers the benefits of lower prices due to their lower production and labour costs, it is understandable that the largest leather suppliers are in countries of these regions, for instance, the top 5 producers are China, Brazil, Italy, Russia, and India (Italy being the only ‘Western’ country there).
While claims that animal welfare rules are unenforced or non-existent in countries like these are somewhat alarmist, it would certainly pay to conduct thorough CSR, as production may fall below your code of ethics meaning that the supply is unreliable.
The developing world is also perhaps the area most at risk from climate change and adverse environmental factors. Given that livestock rearing depends on land, water, and resource intensive it’s no surprise that as the environment becomes less suitable, the leather supply here will be affected.
At the moment, many Western brands and companies are sourcing leather from the large exporting nations in the developing world (such as India, China, Bangladesh, etc.) due to their relatively low prices, but importers should be aware to thoroughly audit the supply chain for environmental and social pitfalls before proceeding; the savings you will be making could be partly due to lower ‘social costs’ in these areas.
A very pertinent question you should be asking is, “Will our customers want leather goods whose production may have caused adverse social and environmental consequences?” Today, that’s highly unlikely, as the top 5 CSR concerns for clothing consumers which are all very relevant to the leather industry bears out.
2. Issues Encountered In Leather Production (Tanning, Crusting, and Finishing)
While leather production using natural methods like smoking, salting, and tanning using vegetable extracts (the tannin from tree bark for instance) dates back to the dawn of humanity, today’s intensive factory production is very different and relies on harsh chemicals and large-scale industrial processes to create leather. As such, it is recognized for its high pollution output and low standards of safety at times.
The acuter the negative environmental effects of your leather supply chain’s production process in the tannery, the more likely it is to cause your brand issues in future.
These are the main negative issues associated with the tanning process:
- High energy and water use
- Water, soil, and air pollution
- Poor health and safety for workers
- Child labour
- Odour and pollution of the surrounding communities
Consumers today are becoming more environmentally conscious and have a much lower tolerance for polluting and unsustainable textile manufacturing practices, a result of which puts many leather tanneries directly in the firing line.
The discharge of pollution is generally tightly regulated in the West, but in the developing world where most tanneries operate, this is often not the case. Now that China has declared war on pollution matters may be improving there, but diligent CSR is still required when dealing with producers in these regions. Following the SA8000 social compliance requirements is a great start when assessing your leather suppliers.
Since the leather supply chain is affected by outside environmental problems, as well as common CSR issues, such as the use of child labour in certain countries, it can be said to be at best risky for importers, and at worst, fairly unsustainable. While social issues can slowly be improved with funding, education, and governmental wherewithal, regrettably the environment is showing little sign of improvement and has a direct negative impact on the livestock and leather industries.
Where to from here for Importers?
There is no avoiding the fact that leather is resource-intensive to make and has a supply chain which is fraught with environmental and social difficulties for importers.
In short, the largest suppliers of leather don’t offer very sustainable supplies.
Can we ‘have our cake and eat it,’ by overcoming these sustainability issues and still be able to obtain raw leather materials and finished leather at reasonable prices? The jury is still out on that one.
Hide and skin supply doesn't seem an issue as global demand for meat continues to rise, so the biggest question is whether we can take action to assure that our leather supply chain is more ethical and sustainable? More assertive auditing should go a long way to helping importers handle sustainability issues by weeding out them out at the sourcing and production stages, but if issues affecting, say, CSR, are endemic to your suppliers, then you have some tough decisions to make (such as switching supplier) which may adversely affect the bottom line.
Even so, will today’s customers tolerate products which are unethical or environmentally suspect for much longer? Possibly not, and this could cause raw material costs to fluctuate accordingly as consumers who can access information about your products and their supply chain more readily become increasingly fickle with their purchasing choices.
Where does your organisation stand on building a sustainable and ethical supply chain? What has commonly stood in your path? Have your consumers ever voiced their concerns about apparel and textile sustainability?
Please leave your questions, tips, and experiences as a comment below and we will be pleased to answer them.