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From commodity to asset: how conversations about workers are changing in China

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The conversation among Chinese businesses on how they view their workers is slowly shifting from commodity to asset, says Carmel Giblin, CEO of Sedex.

In June 2014 we held our fifth annual Sedex conference in Shanghai. With tickets sold-out weeks before the event it was our biggest China conference yet, filling the room with over 200 delegates from businesses across China and further afield. But what struck me about the conference wasn’t the size of it, but the way conversations about workers are changing.

When I first visited China – only four years ago – businesses were talking about their workers as a commodity. Workers were in plentiful supply and some factories did not blink at a 100% annual staff turnover rate. Now, this mind-set is changing, and quickly. Almost every speaker at the conference talked about worker engagement: about how businesses can help their workers deal with issues that are faced throughout China. Significantly, these aren’t just health and safety issues; they go beyond compliance to look at employees’ emotional wellbeing. Workers are now being regarded as an asset, and companies are recognising that a happy, engaged workforce can have a huge impact on the quality of products and how efficiently orders can be fulfilled.

While there are many complex issues impacting workers in China, I want dive into a couple here to show how seemingly huge problems can be solved – or at least alleviated – relatively easily.

One of the key issues facing China is migrant workers. While many factories are sited in deltas along the coast, much of the population lives inland and travels far for work. In total, nearly 160 million rural Chinese migrated to find work by the end of 2011, making it the largest migration in history, according to the Economist.

While this migration has slowed or even reversed in recent years the number of migrant workers still stands at 20% of the workforce, 80% of whom are parents who must leave their children behind when they move for work. They may only see their children once a year at Spring Break (Chinese New Year), largely building their relationship through phone calls. This long-term division of families can be traumatic and have far-reaching effects. At the conference Sedex member New Look referenced a study of its Chinese workers which found that 80% of parents who had left their children behind felt inadequate as parents and 59% said that the situation lessened their commitment to work, making them distracted and affecting their performance.

The simple solution to this problem is to site factories inland so workers don’t have to migrate, but while this is already an established trend it will take years for enough factories to be built inland. In the meantime, one organisation working to improve the situation for migrant workers is INNO, a hotline which gives workers support and guidance over the phone. INNO set up the Left Behind Children Hotline project to help migrant workers build better relationships with their children, particularly over the phone. The project works with the migrant workers, their children and the local community to share knowledge and help build communication skills, bringing families closer together despite physical distance.

Another challenging issue that companies are addressing is giving workers a voice. Unions set up in the past were often criticised as being little more than government-controlled vehicles, which did not truly aid worker representation. Now, particularly among the younger demographic, social media (QQ, Weibo and WeChat, among others) is enabling workers to collectively organise themselves and speak out for their rights. Research by Professor Kan Wang from the China Institute of Industrial Relations reveals that the number of workers involved in collective disputes surged from 12% in 2005, to 94% in 2013.

One way companies are helping their workers to have a voice – and crucially, listening to that voice – is by supporting them to set up worker committees. Clearly this is an improvement, but it has to be carefully managed to maintain that committee’s independence and ensure that it is providing true representation.

While these are only two examples of the issues and possible solutions, it’s clear that the tone of conversation in China is changing rapidly. The number of 15- to 29-year-olds in the country peaked in 2011, according to UN estimates and the working-age population as a whole has been in decline for the last two years. This means that workers are no longer regarded as a commodity, but as human beings with both physical and emotional needs. This welcome progress has opened up new avenues for innovative solutions, but there is still much that can be done.

Sedex is committed to highlighting these issues, using our rich bank of data to identify the root causes and supporting our members in their efforts to improve working conditions in China. We recognise that although some of the issues facing workers in China are driven by Chinese law or other macro factors, others can be relatively simple, quick and cheap to fix. Working out how, and where, to make these adjustments to deliver changes at scale can be challenging.  This is where collaboration at the brand – and supplier level – can play a vital role in maximising impact.

Carmel Giblin is the CEO of Sedex, a membership organisation which supports responsible supply chains.

Photo: Edwin Lee via Flickr

Further reading:

Sedex launches film series in a bid to improve responsible sourcing

Sedex teams up with World Bank to launch supply chain monitoring platform

China: supply chain progress made, but major problems still exist

Engage with China to build global political trust, says top climate diplomat

We are a long way from achieving stability in supply chains

Editors Choice

2017 Was the Most Expensive Year Ever for U.S. Natural Disaster Damage

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Natural Disaster Damage
Shutterstock / By Droidworker | https://www.shutterstock.com/g/droidworker

Devastating natural disasters dominated last year’s headlines and made many wonder how the affected areas could ever recover. According to data from the U.S. National Oceanic and Atmospheric Administration (NOAA), the storms and other weather events that caused the destruction were extremely costly.

Specifically, the natural disasters recorded last year caused so much damage that the associated losses made 2017 the most expensive year on record in the 38-year history of keeping such data. The following are several reasons that 2017 made headlines for this notorious distinction.

Over a Dozen Events With Losses Totalling More Than $1 Billion Each

The NOAA reports that in total, the recorded losses equaled $306 billion, which is $90 billion more than the amount associated with 2005, the previous record holder. One of the primary reasons the dollar amount climbed so high last year is that 16 individual events cost more than $1 billion each.

Global Warming Contributed to Hurricane Harvey

Hurricane Harvey, one of two Category-4 hurricanes that made landfall in 2017, was a particularly expensive natural disaster. Nearly 800,000 people needed assistance after the storm. Hurricane Harvey alone cost $125 billion, with some estimates even higher than that. So far, the only hurricane more expensive than Harvey was Katrina.

Before Hurricane Harvey hit, scientists speculated climate change could make it worse. They discussed how rising ocean temperatures make hurricanes more intense, and warmer atmospheres have higher amounts of water vapor, causing larger rainfall totals.

Since then, a new study published in “Environmental Research Letters” confirmed climate change was indeed a factor that gave Hurricane Harvey more power. It found environmental conditions associated with global warming made the storm more severe and increase the likelihood of similar events.

That same study also compared today’s storms with ones from 1900. It found that compared to those earlier weather phenomena, Hurricane Harvey’s rainfall was 15 percent more intense and three times as likely to happen now versus in 1900.

Warming oceans are one of the contributing factors. Specifically, the ocean’s surface temperature associated with the region where Hurricane Harvey quickly transformed from a tropical storm into a Category 4 hurricane has become about 1 degree Fahrenheit warmer over the past few decades.

Michael Mann, a climatologist from Penn State University, believes that due to a relationship known as the Clausius-Clapeyron equation, there was about 3-5 percent more moisture in the air, which caused more rain. To complicate matters even more, global warming made sea levels rise by more than 6 inches in the Houston area over the past few decades. Mann also believes global warming caused the stationery summer weather patterns that made Hurricane Harvey stop moving and saturate the area with rain. Mann clarifies although global warming didn’t cause Hurricane Harvey as a whole, it exacerbated several factors of the storm.

Also, statistics collected by the Environmental Protection Agency (EPA) from 1901-2015 found the precipitation levels in the contiguous 48 states had gone up by 0.17 inches per decade. The EPA notes the increase is expected because rainfall totals tend to go up as the Earth’s surface temperatures rise and additional evaporation occurs.

The EPA’s measurements about surface temperature indicate for the same timespan mentioned above for precipitation, the temperatures have gotten 0.14 Fahrenheit hotter per decade. Also, although the global surface temperature went up by 0.15 Fahrenheit during the same period, the temperature rise has been faster in the United States compared to the rest of the world since the 1970s.

Severe Storms Cause a Loss of Productivity

Many people don’t immediately think of one important factor when discussing the aftermath of natural disasters: the adverse impact on productivity. Businesses and members of the workforce in Houston, Miami and other cities hit by Hurricanes Harvey and Irma suffered losses that may total between $150-200 billion when both damage and sacrificed productivity are accounted for, according to estimates from Moody’s Analytics.

Some workers who decide to leave their homes before storms arrive delay returning after the immediate danger has passed. As a result of their absences, a labor-force shortage may occur. News sources posted stories highlighting that the Houston area might not have enough construction workers to handle necessary rebuilding efforts after Hurricane Harvey.

It’s not hard to imagine the impact heavy storms could have on business operations. However, companies that offer goods to help people prepare for hurricanes and similar disasters often find the market wants what they provide. While watching the paths of current storms, people tend to recall storms that took place years ago and see them as reminders to get prepared for what could happen.

Longer and More Disastrous Wildfires Require More Resources to Fight

The wildfires that ripped through millions of acres in the western region of the United States this year also made substantial contributions to the 2017 disaster-related expenses. The U.S. Forest Service, which is within the U.S. Department of Agriculture, reported 2017 as its costliest year ever and saw total expenditures exceeding $2 billion.

The agency anticipates the costs will grow, especially when they take past data into account. In 1995, the U.S. Forest Service spent 16 percent of its annual budget for wildfire-fighting costs, but in 2015, the amount ballooned to 52 percent. The sheer number of wildfires last year didn’t help matters either. Between January 1 and November 24 last year, 54,858 fires broke out.

2017: Among the Three Hottest Years Recorded

People cause the majority of wildfires, but climate change acts as another notable contributor. In addition to affecting hurricane intensity, rising temperatures help fires spread and make them harder to extinguish.

Data collected by the National Interagency Fire Center and published by the EPA highlighted a correlation between the largest wildfires and the warmest years on record. The extent of damage caused by wildfires has gotten worse since the 1980s, but became particularly severe starting in 2000 during a period characterized by some of the warmest years the U.S. ever recorded.

Things haven’t changed for the better, either. In mid-December of 2017, the World Meteorological Organization released a statement announcing the year would likely end as one of the three warmest years ever recorded. A notable finding since the group looks at global land and ocean temperature, not just statistics associated with the United States.

Not all the most financially impactful weather events in 2017 were hurricanes and wildfires. Some of the other issues that cost over $1 billion included a hailstorm in Colorado, tornados in several regions of the U.S. and substantial flooding throughout Missouri and Arkansas.

Although numerous factors gave these natural disasters momentum, scientists know climate change was a defining force — a reality that should worry just about everyone.

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Environment

How to be More eco-Responsible in 2018

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eco-responsible
Shutterstock / By KENG MERRY Paper Art | https://www.shutterstock.com/g/kengmerrymikeymelody

Nowadays, more and more people are talking about being more eco-responsible. There is a constant growth of information regarding the importance of being aware of ecological issues and the methods of using eco-friendly necessities on daily basis.

Have you been considering becoming more eco-responsible after the New Year? If so, here are some useful tips that could help you make the difference in the following year:

1. Energy – produce it, save it

If you’re building a house or planning to expand your living space, think before deciding on the final square footage. Maybe you don’t really need that much space. Unnecessary square footage will force you to spend more building materials, but it will also result in having to use extra heating, air-conditioning, and electricity in it.

It’s even better if you seek professional help to reduce energy consumption. An energy audit can provide you some great piece of advice on how to save on your energy bills.

While buying appliances such as a refrigerator or a dishwasher, make sure they have “Energy Star” label on, as it means they are energy-efficient.

energy efficient

Shutterstock Licensed Photo – By My Life Graphic

Regarding the production of energy, you can power your home with renewable energy. The most common way is to install rooftop solar panels. They can be used for producing electricity, as well as heat for the house. If powering the whole home is a big step for you, try with solar oven then – they trap the sunlight in order to heat food! Solar air conditioning is another interesting thing to try out – instead of providing you with heat, it cools your house!

2. Don’t be just another tourist

Think about the environment, as well your own enjoyment – try not to travel too far, as most forms of transport contribute to the climate change. Choose the most environmentally friendly means of transport that you can, as well as environmentally friendly accommodation. If you can go to a destination that is being recommended as an eco-travel destination – even better! Interesting countries such as Zambia, Vietnam or Nicaragua are among these destinations that are famous for its sustainability efforts.

3. Let your beauty be also eco-friendly

eco-friendly

Shutterstock / By Khakimullin Aleksandr

We all want to look beautiful. Unfortunately, sometimes (or very often) it comes with a price. Cruelty-free cosmetics are making its way on the world market but be careful with the labels – just because it says a product hasn’t been tested on animals, it doesn’t  mean that some of the product’s ingredients haven’t been tested on some poor animal.

To be sure which companies definitely stay away from the cruel testing on animals, check PETA Bunny list of cosmetic companies just to make sure which ones are truly and completely cruelty-free.

It’s also important if a brand uses toxic ingredients. Brands such as Tata Harper Skincare or Dr Bronner’s use only organic ingredients and biodegradable packaging, as well as being cruelty-free. Of course, this list is longer, so you’ll have to do some online research.

4. Know thy recycling

People often make mistakes while wanting to do something good for the environment. For example, plastic grocery bags, take-out containers, paper coffee cups and shredded paper cannot be recycled in your curb for many reasons, so don’t throw them into recycling bins. The same applies to pizza boxes, household glass, ceramics, and pottery – whether they are contaminated by grease or difficult to recycle, they just can’t go through the usual recycling process.

People usually forget to do is to rinse plastic and metal containers – they always have some residue, so be thorough. Also, bottle caps are allowed, too, so don’t separate them from the bottles. However, yard waste isn’t recyclable, so any yard waste or junk you are unsure of – just contact rubbish removal services instead of piling it up in public containers or in your own yard.

5. Fashion can be both eco-friendly and cool

Believe it or not, there are actually places where you can buy clothes that are eco-friendly, sustainable, as well as ethical. And they look cool, too! Companies like Everlane are very transparent about where their clothes are manufactured and how the price is set. PACT is another great company that uses non-GMO, organic cotton and non-toxic dyes for their clothing, while simultaneously using renewable energy factories. Soko is a company that uses natural and recycled materials in making their clothes and jewelry.

All in all

The truth is – being eco-responsible can be done in many ways. There are tons of small things we could change when it comes to our habits that would make a positive influence on the environment. The point is to start doing research on things that can be done by every person and it can start with the only thing that person has the control of – their own household.

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