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Economy

We are a long way from achieving stability in supply chains

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It is six months since one of the world’s worst factory disasters occurred in Bangladesh, killing nearly 1,200 people and affecting thousands more. But what can be done to address these major supply chain flaws and who is responsible for change?

On the morning of April 24 2013, the Rana Plaza complex in Bangladesh, which housed a bank, several shops and a garment factory, collapsed. It left an astronomical trail of destruction and major retail brands, whose products were manufactured in the factory, were criticised for failing to note serious warning signs that eventually led to the disaster.

Employees had notified building managers on the previous day of cracks that had appeared in the building. Several shops were closed, but many employees were ordered back to work. To make matters worse, some were even threatened with the loss of a month’s pay if they failed to turn up – amounting to £38.

A day later, 1,200 were killed and over 2,500 injured when part of the building collapsed. The tragedy is that it took such a devastating incident for the business flaws and supply chain oversight to come to light.

The legitimacy of the factory itself was brought into question in the immediate aftermath. The head of the Bangladesh fire service claimed in the New York Times that the four highest floors in the building had no permit. In addition to this, architect Massood Reza said the building was initially designed to house offices and shops, and that the structure would therefore not have been able to cope with the weight and vibrations that come from heavy machinery.

Reactions to the disaster came from far and wide. Campaigners, politicians, consumers and the media were quick to stand behind the victims. Pope Francis condemned the conditions created by factory owners as “slave labour“.

However, the Rana Plaza disaster was by no means an isolated incident. Since April, there have been a number of similar events involving fire safety, one of which recently claimed the lives of six workers.

A BBC Panorama investigation brought to light the story of a 13-year-old girl who had been forced to work in a different factory after her mother was left crippled by the Rana Plaza disaster, as well as some workers who were forced to work 19-hour shifts.

But whose responsibility is it to act to address the dozens of issues – the low pay, the poor working conditions, the lack of regard for regulation and safety and the long working hours?

The answer to that is everyone. If you have any involvement whatsoever with the fashion or retail industries, it is your responsibility as a citizen to help enact change.

Consumers, suppliers, buyers and policymakers – to mention a few – have all had some form of benefit from the exploitation of these workers, whether that be low cost clothing, huge profits or tax benefits.

Membership organisation Sedex recently ran a six-part mini-documentary series which was featured on Blue & Green Tomorrow. Throughout the series, industry leaders and professionals from a cross-consortium of retail giants came together to look at the ways in which everyone can benefit from a more sustainable supply chain.

There are often high expectations and strenuous demands placed on suppliers by their buyers. These can sometimes conflict, creating difficulties on the part of the supplier.

Commenting within Sedex’s films series, Peter McAllister, director of the Ethical Trading Initiative, says, “The brand or retailer at the supermarkets is concerned about what the customer thinks, and they often place significant demands therefore on their suppliers to meet their expectations.”

This can lead to confusion, with more and more time spent managing projects, creating products to meet the needs of different buyers and carrying out multiple audits, leaving less time to tackle the issues that really matter – those relating to society and the environment.

In order to tackle the issues within the networks that are so intertwined in the modern supply chain, everyone in any business must be aware of the risks. This includes lawyers, human resources and administrative staff, right up to senior management. Each and every person within the system must be aware of the potential impact that their decisions could have further down the chain, and be aware of the importance of getting to grips with responsible sourcing.

Supply chains are so complex that it is often extremely difficult for suppliers to concentrate on the things that matter most. Multiple audit demands from multiple buyers are often all too big a burden on suppliers. High quality demands by consumers are passed on in this process, and as a result, suppliers find that their time is spent attempting to pitch their goods and services to meet all the specific demands.

Carmel Giblin, CEO of Sedex, suggests one way of addressing this is by “getting multiple companies to agree around a format for that, using common and consistent audit methodologies. These kinds of approaches are really helpful.”

Transparency is another of the key factor which Sedex says can improve standards within the supply chain.

Trude Ertresvåg, head of corporate social responsibility at REMA 1000, identifies the consumer risks of an opaque supply chain: “If there’s no transparency in your supply chain, you wouldn’t know what could go wrong because it makes it much more difficult to identify the quality of the product and also to make sure that the product that you’re actually serving the customers is what’s labelled on the outside of it.”

The horsemeat scandal is just an individual example of this in action, but in some cases, the consequences of opaqueness can be much more severe.

If consumers and retailers knew of the working conditions at Rana Plaza prior to the disaster, would they have demanded change? The system needs to be transparent so that these risks can be addressed, before it is too late.

Many companies, however, feel that by keeping their cards close to their chests, they are protecting their financial interests. It is feared that by disclosing certain pieces of information, buyers can go directly to manufacturers, cutting out the middle man and making them redundant. The fact of the matter is that no single company can tackle these problems alone, which is why a collaborative approach is vital.

There are really accessible ways which companies can collaborate”, says Giblin, adding that one thing to avoid is “reinventing the wheel or asking your suppliers to do something different when there is no real need to it.”

By sharing resources, best practices and knowledge, global industries can together achieve more. This must be built on a mutual trust and relies heavily on the integrity of all the parties concerned, but most of all, involves a genuine desire to minimise corporate and social risks.

Only when companies start working together to build on this trust, can they begin to benefit from mitigating the risks that exist within the supply chain. This isn’t about espionage, or about undercutting business. This is about making sure that the profiteering of corporations does not come at the cost of the basic human rights and liberties of those driving the businesses by producing the goods. This is about ensuring that the whole retail system is sustainable and fit for purpose.

Looking to the future, the global population is expected to rise to 10 billion by the turn of the century. As such, resource demands will dramatically increase and if the world ignores the flaws within its supply systems, not only will it fail to meet demands, but we will continue to see tragedies such as the Rana Plaza collapse, with the possibility of them becoming more common. It is our job as consumers and as global citizens to demand a change.

Sedex’s Responsible Sourcing Insights series:

Episode one: Getting to grips with responsible sourcing

Episode two: Tackling complexity in multi-tier supply chains

Epiosode three: Driving transparency to improve standards

Episode four: The power of collaboration

Episode five: Big data

Episode six: Supply chain 2.0 – Where’s it all heading?

Economy

New Zealand to Switch to Fully Renewable Energy by 2035

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renewable energy policy
Shutterstock Licensed Photo - By Eviart / https://www.shutterstock.com/g/adrian825

New Zealand’s prime minister-elect Jacinda Ardern is already taking steps towards reducing the country’s carbon footprint. She signed a coalition deal with NZ First in October, aiming to generate 100% of the country’s energy from renewable sources by 2035.

New Zealand is already one of the greenest countries in the world, sourcing over 80% of its energy for its 4.7 million people from renewable resources like hydroelectric, geothermal and wind. The majority of its electricity comes from hydro-power, which generated 60% of the country’s energy in 2016. Last winter, renewable generation peaked at 93%.

Now, Ardern is taking on the challenge of eliminating New Zealand’s remaining use of fossil fuels. One of the biggest obstacles will be filling in the gap left by hydropower sources during dry conditions. When lake levels drop, the country relies on gas and coal to provide energy. Eliminating fossil fuels will require finding an alternative source to avoid spikes in energy costs during droughts.

Business NZ’s executive director John Carnegie told Bloomberg he believes Ardern needs to balance her goals with affordability, stating, “It’s completely appropriate to have a focus on reducing carbon emissions, but there needs to be an open and transparent public conversation about the policies and how they are delivered.”

The coalition deal outlined a few steps towards achieving this, including investing more in solar, which currently only provides 0.1% of the country’s energy. Ardern’s plans also include switching the electricity grid to renewable energy, investing more funds into rail transport, and switching all government vehicles to green fuel within a decade.

Zero net emissions by 2050

Beyond powering the country’s electricity grid with 100% green energy, Ardern also wants to reach zero net emissions by 2050. This ambitious goal is very much in line with her focus on climate change throughout the course of her campaign. Environmental issues were one of her top priorities from the start, which increased her appeal with young voters and helped her become one of the youngest world leaders at only 37.

Reaching zero net emissions would require overcoming challenging issues like eliminating fossil fuels in vehicles. Ardern hasn’t outlined a plan for reaching this goal, but has suggested creating an independent commission to aid in the transition to a lower carbon economy.

She also set a goal of doubling the number of trees the country plants per year to 100 million, a goal she says is “absolutely achievable” using land that is marginal for farming animals.

Greenpeace New Zealand climate and energy campaigner Amanda Larsson believes that phasing out fossil fuels should be a priority for the new prime minister. She says that in order to reach zero net emissions, Ardern “must prioritize closing down coal, putting a moratorium on new fossil fuel plants, building more wind infrastructure, and opening the playing field for household and community solar.”

A worldwide shift to renewable energy

Addressing climate change is becoming more of a priority around the world and many governments are assessing how they can reduce their reliance on fossil fuels and switch to environmentally-friendly energy sources. Sustainable energy is becoming an increasingly profitable industry, giving companies more of an incentive to invest.

Ardern isn’t alone in her climate concerns, as other prominent world leaders like Justin Trudeau and Emmanuel Macron have made renewable energy a focus of their campaigns. She isn’t the first to set ambitious goals, either. Sweden and Norway share New Zealand’s goal of net zero emissions by 2045 and 2030, respectively.

Scotland already sources more than half of its electricity from renewable sources and aims to fully transition by 2020, while France announced plans in September to stop fossil fuel production by 2040. This would make it the first country to do so, and the first to end the sale of gasoline and diesel vehicles.

Many parts of the world still rely heavily on coal, but if these countries are successful in phasing out fossil fuels and transitioning to renewable resources, it could serve as a turning point. As other world leaders see that switching to sustainable energy is possible – and profitable – it could be the start of a worldwide shift towards environmentally-friendly energy.

Sources: https://www.bloomberg.com/news/articles/2017-11-06/green-dream-risks-energy-security-as-kiwis-aim-for-zero-carbon

https://www.reuters.com/article/us-france-hydrocarbons/france-plans-to-end-oil-and-gas-production-by-2040-idUSKCN1BH1AQ

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Economy

How Going Green Can Save A Company Money

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going green can save company money
Shutterstock Licensed Photot - By GOLFX

What is going green?

Going green means to live life in a way that is environmentally friendly for an entire population. It is the conservation of energy, water, and air. Going green means using products and resources that will not contaminate or pollute the air. It means being educated and well informed about the surroundings, and how to best protect them. It means recycling products that may not be biodegradable. Companies, as well as people, that adhere to going green can help to ensure a safer life for humanity.

The first step in going green

There are actually no step by step instructions for going green. The only requirement needed is making the decision to become environmentally conscious. It takes a caring attitude, and a willingness to make the change. It has been found that companies have improved their profit margins by going green. They have saved money on many of the frivolous things they they thought were a necessity. Besides saving money, companies are operating more efficiently than before going green. Companies have become aware of their ecological responsibility by pursuing the knowledge needed to make decisions that would change lifestyles and help sustain the earth’s natural resources for present and future generations.

Making needed changes within the company

After making the decision to go green, there are several things that can be changed in the workplace. A good place to start would be conserving energy used by electrical appliances. First, turning off the computer will save over the long run. Just letting it sleep still uses energy overnight. Turn off all other appliances like coffee maker, or anything that plugs in. Pull the socket from the outlet to stop unnecessary energy loss. Appliances continue to use electricity although they are switched off, and not unplugged. Get in the habit of turning off the lights whenever you leave a room. Change to fluorescent light bulbs, and lighting throughout the building. Have any leaks sealed on the premises to avoid the escape of heat or air.

Reducing the common paper waste

paper waste

Shutterstock Licensed Photo – By Yury Zap

Modern technologies and state of the art equipment, and tools have almost eliminated the use of paper in the office. Instead of sending out newsletters, brochures, written memos and reminders, you can now do all of these and more by technology while saving on the use of paper. Send out digital documents and emails to communicate with staff and other employees. By using this virtual bookkeeping technique, you will save a bundle on paper. When it is necessary to use paper for printing purposes or other services, choose the already recycled paper. It is smartly labeled and easy to find in any office supply store. It is called the Post Consumer Waste paper, or PCW paper. This will show that your company is dedicated to the preservation of natural resources. By using PCW paper, everyone helps to save the trees which provides and emits many important nutrients into the atmosphere.

Make money by spreading the word

Companies realize that consumers like to buy, or invest in whatever the latest trend may be. They also cater to companies that are doing great things for the quality of life of all people. People want to know that the companies that they cater to are doing their part for the environment and ecology. By going green, you can tell consumers of your experiences with helping them and communities be eco-friendly. This is a sound public relations technique to bring revenue to your brand. Boost the impact that your company makes on the environment. Go green, save and make money while essentially preserving what is normally taken for granted. The benefits of having a green company are enormous for consumers as well as the companies that engage in the process.

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