Sustainable Versus Ethical Manufacturing

November 18, 2020 by John Hamlin | Categories: Uncategorized No Comments ↓

The Issue

Companies, consumers and communities all have a share in behaving responsibly if humankind is to minimize the effects of the COVID pandemic. They need to examine and, where possible, accept standards that can help guide responsible behaviours in the workplace. This blog addresses three questions:

What are similarities and differences between sustainable and ethical manufacturing?
Which industries are affected by one or both of these principles?
What are fair trade principles?

Understanding Ethical and Sustainable Standards

Sustainable manufacturing involves the creation and development of products through economical processes that conserve natural resources and energy. This kind of production is geared towards and guided by principles like environmental protection, cultural validity, economic fairness, and social justice. This includes the reduced use of chemicals to more plant-based solutions to get the production process complete.

Ethical manufacturing is a business approach where the focus is good health and safety for all stakeholders involved with the process. This includes consideration for customers, supply chain actors, delivery personnel, host communities, and the workers in the factory. It ensures that products have been manufactured safely.

Ethical manufacturing is people mindfully, encouraging fairness like:

(a) ensuring workers have reasonable work schedules and opportunity for work-home life balance,
(b) ensuring a living wage is paid, and
(c) giving workers an incentive to participate in the well-being of the enterprise. If one person in the production process is sick due to COVID, they are as a team allowed comparable time off to tend to ailments and come back to work when they all are feeling better.

Business Applying Responsibility Standards

Because sustainability and ethics are difficult principles to apply, companies and sectors will require a level of innovation to ensure effectiveness and oversight during implementation. They are informed by various fair-labour and green-movement initiatives.

A growing number of consumers in these COVID times are demanding more ‘healthy’ and ‘responsible’ products that support both movements. This is usually focused upon the social, economic, and environmental impacts brought about by the product purchased. This has led to different buying habits. Sustainability consumers can be said to be more environmentally based while ethical consumers are more workers based.

Principal industries that have been affected are:

• Agri-food industry – where the work environments of the farmers or supply-chain workers now have to be considered. The state of the farms, the workers from both factories and fields have to be considered. Of course, every private and cooperatively-owned company needs a profit to survive and will try to cut down costs.

• Textile industry – being a very human-based industry, most of the manufacturers usually require a lot of work orders to meet demands and also make profits quicker. This does lead to unethical practice challenges where companies can underpay the workers and make them work longer and/or for undocumented hours to improve profit margins.

• The fashion industry – while facing challenges similar to the textile industry, its products are more finished than materials in the textile business. However a single pair of jeans can pass through five to seven contractors before completion. This sector is high on human involvement and faces similar challenges to the textile industry.

• The mining industry – this one has a lot of serious problems as the companies involved with exploring for, finding and processing ores or raw materials. Most of the world’s mine work is commonly done by underprivileged children and minority family adults often without adequate tools or safety provisions. Children, in particular, are better equipped with smaller hands to better reach the precious metals, often in waste dumps. Many are often not paid or are given barely adequate food. If companies can get involved, they can help reduce such vices, either through charitable donations or training programs.

• Chemical industries – these are a variety of companies that make chemical-based products and usually their short term balance sheets do not address the effects that their wastes do to the environment when channeled into waterways, the air, or water-bearing aquifers. Because chemical-based industries are usually highly automated and deal with complex ingredients not normally put into contact with one another in nature, more of the concerns come from the environmental impact.

What is Fair Trade and what are its principles?

Fair Trade is an ethical approach in the manufacturing of products in a way that ensures the building of a social and environmentally sustainable trade system. It is a deliberate approach where the manufacturers pick locations and hire a neighbouring workforce in ways that can alleviate local and regional standards of living. Fair Trade empowers both marginalized and secure workers to improve their living standards to support the whole trade system.

Fair Trade principles and practices include the following:

• Creation of opportunities for the economically disadvantaged – this is the general focus of poverty alleviation. If you can get people to work and earn money, they can have improved purchasing power, pay taxes to the government, and support more and better services. This can be done through micro-loans, ethical trading, the provision of raw materials, essential re-training, promoting new marketing or design ideas, and committing to purchase of products at fair prices

• Accountability and transparency – companies need to be aware of and open about the practices and living standards of all workers, suppliers, sub-trades and agents. They should keep records of all the transactions and activities involved to make it easier in tracing any problems in its work process.

• Fair wages and raw materials prices – This will also help with transport, ordering, warehousing and distribution planning and costs.

• Ensuring there is no child/forced labor – this is done through the hiring of willing and of-age workers that have proper credentials as dictated by the national labour laws and international human rights conventions. Child labour, most times is forced labour, which hampers a child’s growth and development.

• Commitment to non-discrimination – this should encompass all religions and races, allowing for the freedom of association to benefit workers as well as their families, communities, and employers.

• Ensuring proper working conditions – these are warranties addressing workplace safety and protection. This will also include proper housing, education and working conditions.

Is One Principle – Sustainable vs Ethical – Superior to Another?

Companies aspiring to commit to an external standard in making goods or offering services have to reach an understanding about whether their responsible practices should either favour the environment (including climate change, environmental impact and sustainability) or consider the safety of all the stakeholders (corporate responsibility) involved in production or providing a service. This answer will depend on many factors such as the specific management team, the country of operations, and whether or not there is a relevant code of conduct, as well as the specific business challenges in the industry in question. Most sectors have different supply chains and processes and the number of people involved may affect the principle best employed.

Assembly-based manufacturers where robots do most of the work are more likely to support a sustainable manufacturing ethic. Being an autonomous company involves avoiding non-renewable or fossil fuels and switching fully to electricity coupled with solar energy systems as backup systems.

Fashion-based industries, by contrast, are heavily reliant on human workers as products do require a level of creativity, something that cannot be programmed into robots. A responsible manufacturer of this type would more likely favour ethical manufacturing. The human workers need time to go home, have shifts, and be ensured of safety and protection.

The shared benefits for businesses or companies that use either principle are many:

• Increased efficiency – most of the work process runs smoothly without disruption when companies are fully automated. This means the work process can go on 24/7 even when most of the human workers have left for home.

• Reduction in costs – when supporting sustainability goals, expenditures are reduced where robots do dangerous tasks in fields and factories. The same holds true when choosing to avoid exploiting or acting in high risk or dangerous, disaster-prone or unstable environments.

• Greater orders for products – regulators and conscientious consumers are more likely to accept, approve and buy your products if you use one or more certification schemes. This improves such things as:

(a) profitability,
(b) a company’s social licence to operate,
(c) more favourable insurance rates, and
(d) share price valuation.

• Tax incentives – many countries will offer tax reliefs to properties and factories that have been certified as sustainable. These manufacturers, in turn, pay fewer taxes and increase their profit margins.

• Supplier innovation – suppliers and contractors of certified products are likely to be more willing and interested, innovative and supportive partners

There are also a number of benefits to consumers in supporting businesses practicing one or both sets of principles:

• Better social responsibility image and marketplace reputation for company. Certification does create awareness about your business, getting you more customers and prospective new hires who have like-minded ideologies.

• More word-of-mouth support, more friends and families of customers will prefer or recommend your sustainable and ethical products for their use. The younger generation of customers in particular are keener to engage on social media about products and services they believe in.

• Identifying likely sources of donation of products, services or charitable donations– residents supporting neighbourhood or global causes are more likely to turn to principled companies for donations and support, thus enhancing shared values.

Conclusion

The threats we all share in the face of the pandemic turn our attention to living responsibly in harmony with Mother Nature. Companies, consumers and communities all benefit from commitments that adopt and support responsible business practices.