Garment factories in India rarely control for temperature or pollution. How important is it in driving productivity and improving the work environment?
Improving physical working conditions on the factory floor can go a long way in increasing worker productivity, and profitability for the firm.
Two studies by the Lab, measuring heat stress and pollution levels on Shahi factory floors over three years provide the basis for the ‘No Sweat’ Shop project. We rigorously tested the use of energy efficient, and environment friendly technologies on garment factory production floors to improve physical working conditions, and calculate the return on investment (ROI) for the firm.
In one study, GBL estimated that adoption of LED lights in place of fluorescent lighting not only reduced energy consumption by roughly 85% but also dissipated 1/7th of the heat, reducing average indoor temperature by roughly 2.4 degree Celsius. The lighting upgrade reduced prevailing temperature on factory floors to below the heat stress threshold of the human body, vastly improving comfort levels of workers. This was reflected in the additional profit from increased worker productivity which proved to be 5X larger than energy cost savings, dramatically shifting the break-even point of the investment for the firm from three years to seven months. In a second related study, we found that exposure to high levels of air pollution significantly reduced worker productivity, reflecting both welfare reductions for the workers, and lost profit for the firm. Hence, our research adds conclusive, rigorous evidence of the business gains to improving ambient air quality in the workplace to a large body of existing evidence on the health and welfare gains to workers.
A Michigan University study of 25 garment factories in Bangalore has shown that green technology saves energy, boosts profits and productivity in industrial units.
Innovations in energy efficiency have been cited as a primary means to curb the acceleration of climate change. Despite this promise, energy-efficient technologies are consistently adopted at low rates.
Given the repercussions of rising global temperatures due to climate change, and the startling rate of growth of global energy demand, achieving high adoption rates of technologies that mitigate climate change is a key policy priority.
The investigation of 25 garment factories in Bangalore, India between 2010 and 2013 found that, because LEDs create less heat than traditional lights, they help keep the factory floor cooler, boosting worker productivity and reducing absenteeism.
Michigan Ross Professor Achyuta Adhvaryu shows that looking only at energy savings doesn’t give the full picture. One of the less-studied effects of global warming is the effect on industrial workers. There’s a direct correlation between high temperatures and lower productivity.
In a nice, recent paper Achyuta Adhvaryu, Namrata Kala, and Anant Nyshadham take a look at how air pollution hurts productivity and what effect, if any, managers can have in mitigating these effects.
"Our goal with starting a foundation is to study interventions that have the potential to impact worker welfare while also promoting the growth of firms," Adhvaryu said in a statement. "We incubate new ideas and serve as a platform to disseminate findings from our research."
In an exclusive interview with BW Businessworld, the three co-founders of Good Business Lab, Achyuta Adhvaryu: Assistant Professor of Business Economics and Public Policy, University of Michigan, Anant Nyshadham: Assistant Professor of Economics, Boston College and Anant Ahuja: Head of Organizational Development, Shahi Exports discuss the research of Good Business Lab and why it is wise for firms to invest in its workers’ welfare.
The researchers found that at those 26 factories, the mercury spiked above the heat stress threshold (roughly 85 degrees inside the factory) one quarter of the time. And once the temperature passed that tipping point, for every extra degree it got hotter, productivity went down by 3 percent and profits went down by 2.2 percent.