A New Network for Chinese Suppliers to Collaborate on Energy Management

May 29, 2014
  • Fengyuan Wang

    Former Manager, BSR

Fengyuan Wang, Manager, Advisory Services, BSR

Chinese factories, like China itself, face challenges and opportunities in accelerating the transition to a low-carbon economy through energy-efficiency improvements, which offer the most promising immediate opportunities for reducing greenhouse gas (GHG) emissions.

The opportunities are growing: In recent years, more energy-service providers, especially in southeast China, including state-owned utility companies like China Southern Power Grid, have established their own commercial energy-service subsidiaries. Last year alone, the government launched seven regional carbon-emissions trading pilots that are aimed at growing the local market for energy-efficiency services and technologies.

However, recent BSR research, as well as our work with member companies through our Supplier Carbon Performance initiative, have revealed two factors limiting large, long-term emissions reductions in supply chains in China: First, the market for energy-efficiency services and technologies is immature in some regions and, second, many factories, even those with relatively more resources available, lack access to information about the latest policy incentives, technologies, and reliable service providers.

As my colleague Nate Springer outlined in his recent blog, there are three main opportunities for global companies to help their suppliers in China manage GHG emissions. There are also opportunities for suppliers to collaborate and help build the market for low-carbon services and technologies and share knowledge and resources. For example, many companies have annual supplier summits to help their suppliers learn and share, and some project-based platforms allow buyers and their suppliers to tackle immediate challenges related to energy and carbon management on a regular but short-term basis.

However, this doesn’t meet suppliers’ needs to acquire and share information on a more regular basis. To that end, BSR surveyed 37 people from 24 Chinese suppliers who registered for a recent workshop we held on energy and carbon management. Our aim was to understand whether suppliers are interested in building a platform for collaboration, how they would like to be engaged over the long term, and what kind of information they would like to receive and/or share through such a platform.

The results were promising: All suppliers surveyed said they like the idea of collaboration, and on a voluntary basis. Survey respondents said they would be most interested in learning more about energy-efficiency case studies and best practices, policy incentives, energy-efficiency technologies, and international standards on energy and carbon management. Respondents also said they would be comfortable using QQ, China’s popular instant-messaging software and social network service, as a communications platform for this group.

Based on the survey results, earlier this month, BSR and the World Resources Institute launched a free, online platform, the Energy Efficiency Peer Support Network, to provide Chinese suppliers with resources on energy-efficient technology, as well as current information on policies and government incentives for carbon-emissions reduction.

The network now has 16 supplier members, and we plan to expand the group by asking BSR member companies to invite their China-based suppliers to join. We are also encouraging current members to invite their peer companies, and we will be inviting energy-service providers to help solve technical challenges that suppliers face and help them seize opportunities for reducing GHG emissions.

For more information about joining the Energy-Efficiency Peer Support Network, contact Fengyuan Wang at fwang@bsr.org.

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