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Following a visit to apparel factories in Sri Lanka, Vivian Frost notices some of the innovation and commitment to sustainability going on there and wonders whether the action is recognised appropriately by buyers in Western countries.
All too often when you think about global supply chains, it’s about purchasers pushing suppliers to do more. But as my recent visit to Sri Lanka brought to life, there is a community of leading manufacturers committed to sustainability themselves: from apparel, printing and tea exports, through to advertising and business services. I saw fantastic examples of companies going above and beyond, integrating sustainability across their business and delivering impactful environmental solutions. Many of these companies have achieved CarbonNeutral® certification through our partner, Carbon Consulting Company. But many also say they continue to compete on price and quality. Are their actions getting lost in the multitude of suppliers and focus on price or do international buyers really value higher environmental standards?
Take the apparel sector as an example. Today, Sri Lanka’s textile and apparel export industry is the most significant contributor to the economy, accounting for 40% of the total exports and providing direct employment opportunities to over 300,000 people and 600,000 indirectly (Sri Lanka Export Development Board). Within minutes of my first factory visit, I rapidly realised that any pre-conceptions about apparel manufacturing should be cast aside.
Hirdaramani Group, whose customers include M&S, Tesco, Nike and Levi's, opened its Mihila factory in 2008. Mihila means Earth and the group’s first custom-built ‘eco-friendly’ factory symbolises its sustainability strategy to build a better world by restoring the environment.
Certified LEED Gold and CarbonNeutral®, the factory has been carefully planned to fit within the natural environment and reduce the use of natural resources- particularly water (70% less use), waste (zero waste to landfill) and energy (48% less use). As well as infrastructure developments like solar panels, rainwater harvesting, skylights and LED tasklights, a range of employee engagement initiatives are used to create a culture of sustainability across the operations. Each day, for example, food waste is measured and reported back to employees in a simple chart next to the rubbish bins - encouraging those that eat the free breakfast or heavily subsidised lunch to not take more than they can eat. As a family-owned business, Hirdaramani views sustainability as part of its company responsibility - ensuring respect for Mother Nature is at the forefront of the industry.
On a much larger scale, MAS holdings, a conglomerate of over 42 different manufacturing sites in 15 countries, specialising in lingerie and active wear, employs around 45,000 people in Sri Lanka (and 72,000 globally). While visiting three of their factories I learnt more about the broader sustainability programme from Sarinda Unamboowe, now head of sustainability for the group. While MAS has a decentralised approach to CSR activities, giving each factory responsibility at the local level, it is taking on a more centralised approach to sustainability with Sarinda at the helm. A passionate wildlife photographer, Sarinda is clearly proud of his country and the natural resources they have at their fingertips, but very aware of the impact the industry can have on the environment. He had just returned from visiting a new plant in Vietnam which they plan to be the leanest and greenest apparel factory in the region. Visiting the factories and talking with senior managers, there is clearly a deep-rooted sense of doing the right thing by making sustainable choices, but not because customers demand it; rather because many of these initiatives make business sense and because they show a natural respect for their surrounding communities.
In addition to a cultural respect for the environment and community, these businesses are also driven by the increasing cost of energy in Sri Lanka, a nation heavily dependent on fossil fuels, with 51% of electricity generated from coal and a further 20% from diesel. Hidaramani, like many other companies I met, are increasingly looking to invest in sustainable and renewable energy sources. However the upfront costs can still be off-putting if companies can’t be sure that their customers have the same focus and will work with them on initiatives through collaboration on renewable investments, long-term purchase agreements, and fair pricing.
Around the world there is currently a lot of focus on how retailers need to push climate resilience and sustainability initiatives into their supply chain. From what I saw in Sri Lanka there are plenty of examples of eco-built factories like Mihila and Thulhiriya which are leading the way on their own and could become the blueprint for the global garment industry. However, maybe the tables need to be turned to ensure that all purchasers place an appropriate value on these initiatives and other factories are therefore incentivised to follow suit.