WASHINGTON, DC — A major initiative to help Chinese auto industry suppliers reduce their environmental impacts successfully improved productivity and generated annual savings worth millions of dollars.

Shanghai General Motors (SGM) partnered with the World Environment Center (WEC) for a "Greening the Supply Chain Initiative" targeting 125 suppliers. The 50/50 joint venture between General Motors and Shanghai Automotive Industry Corp. is one of China's largest vehicle producers; it also imports and sells Buick, Cadillac, Chevrolet and Saab products.

The program focused on reducing water, waste and energy use, while also boosting competitive advantage. It demonstrated a strong business case for efficiency: The 125 suppliers invested about US$21 million in 498 projects, generating annual cost savings of roughly US$19 million. Many projects had ROIs of less than a year.

The improvements in environmental performance were also impressive. These suppliers avoided more than 55,400 tons of greenhouse gas emissions in 2009, which is equivalent to the annual emissions produced by more than 35,000 passenger vehicles, according to the U.S. Environmental Protection Agency.

The projects also reduced solid waste by more than 9,300 tons annually, liquid waste by more than 137,000 kiloliters (36 million gallons), and water use by 1,070,700 tons, or more than 282 million gallons.

"By managing sustainable development initiatives through a business process, SGM has improved the energy and environmental performance across its supply chain, built stronger customer-supplier relationships and increased its ability to adapt to evolving governmental requirements," said WEC President and CEO Terry F. Yosie in a statement.

In a report (PDF) releasing the findings, the partners said the program had the benefit of strengthening the supplier relationships and making the participants more adaptive to evolving government requirements. The participation by the majority of suppliers was described as "excellent."