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By Sharon Kimathi, Energy and ESG Editor, Reuters Digital

Hello,

The focus in today’s newsletter is on the ‘social’ in environment, social and governance (ESG)  issues as garment workers in Bangladesh are set to receive a wage increase after a week of protests that resulted in three fatalities.

Bangladesh will raise the minimum wage for garment workers by 56.25%, the first hike since 2019, the junior labor minister said.

One woman was killed as police in Bangladesh used teargas and rubber bullets to disperse stone-throwing protesters as a demonstration by garment workers for more pay turned violent on Wednesday.

The latest death was the third since protests erupted in the past week. The minimum wage for workers will be increased from 8,000 taka to 12,500 taka ($114) per month from Dec. 1, State Minister for Labour and Employment Monnujan Sufian said. There will also be a 5% annual increment.

Here are a few more things on my radar today:

• UN chief says Gaza deaths show something ‘wrong’ with Israel tactics
• Darfur refugees report new spate of ethnically driven killings
• Lloyd’s of London to invest roughly $65 million following slavery report

Garment workers come out of a factory during lunch hours at the Ashulia area, outskirts of Dhaka, Bangladesh. REUTERS/Mohammad Ponir Hossain

The protests pushed the government to form a panel of factory owners, union leaders and officials to consider the demand for higher pay.

Bangladesh is the world’s largest garment exporter after China. Low wages have helped build its garment industry, with some 4,000 factories employing 4 million workers, supplying brands such as H&M, Zara-owner Inditex, Gap, Hugo Boss and Lululemon. Ready-made garments are a mainstay of the economy, accounting for almost 16% of GDP. 

All the parties involved in the talks agreed to the rise, said Siddiqur Rahman, the owners’ representative on the wage board.

“(Government welfare) cards will be provided to the workers, later the ration cards will be given to them so they can buy essential commodities at cheaper rates,” Rahman, also a former president of the Bangladesh Garment Manufacturers and Exporters Association, told Reuters.

Some workers, however, are not happy with the rise at a time when inflation is running at 9.5%.

“The increase is not enough when prices of all items and rent have gone up sharply. We work to survive but we can’t even cover our basic needs,” Munna Khan, a garment worker, said.

Soaring fuel and power prices have added to the spiraling cost of living in the South Asian nation.

Several clothing factory owners in global fashion manufacturing hub Bangladesh are asking clients that include H&M to help them pay for the government-mandated hike in wages.

“The industry is already struggling, order flow is slow, energy supply is not adequate, and the overall economic situation is not good. In such a time, a big hike in wages certainly will be tough… but for workers, I agree it is a legitimate demand,” said Fazlul Hoque, managing director of Plummy Fashions and former president of the Knitwear Manufacturers & Exporters Association.

Hoque said the increase would add 5-6% to overall costs, a rise he and other factory owners have asked their clients to help shoulder by agreeing to higher rates. Labour accounts for 10% to 13% of their total costs.

He is not optimistic, however.

“In the past, we have seen that they increase only a bit, not enough to pay the extra cost,” Hoque said.

Last month, several fashion brands including Abercrombie & Fitch, Adidas, Gap, Hugo Boss, Levi Strauss, Lululemon, Puma, PVH and Under Armour told Prime Minister Sheikh Hasina in a letter they were “committed to implementing responsible purchasing practices” to enable higher wages.

But Abdus Salam Murshedy, managing director of the Envoy Group that sells to Walmart, Zara and American Eagle Outfitter among others, said buyers were unwilling to pay the “right price, the fair price”.

“Words from buyers are fine but when they place orders, they say there are many other competing suppliers, so you better do this, do that,” said Murshedy, who is also a lawmaker from Hasina’s Awami League party.

Keri Safran next to union team captain Romel De Silva after the SAG-AFTRA Committee approved a tentative agreement, a brewery in LA, California,. U.S. REUTERS/Mario Anzuoni

Jason Judd, executive director at Cornell University’s Global Labor Institute and Angus Bauer, head of sustainable investment research at Schroders, share their analysis on extreme weather and poor workers’ rights threatening key apparel production hubs: 

“The apparel industry has focused its sustainability efforts on mitigating the impacts of climate change by reducing greenhouse gas emissions, textile waste and water usage.

“The industry produces apparel and footwear in some of the world’s most climate-vulnerable countries where extreme heat and intense floods are cutting into worker health, output and earnings.

“These climate adaptation risks are not accounted for by brands or investors. Fashion’s business model sees these issues as externalities for brands and retailers. In short, they’re someone else’s problem. 

“But our analysis shows that extreme heat and flooding pose material risks for brands and investors.

“For four countries we analyzed – Vietnam, Bangladesh, Cambodia and Pakistan – this slower growth translates to $65 billion in export earnings and nearly 1 million jobs foregone between now and 2030. 

“Looking at one sample brand, our analysis finds that the productivity headwind of heat and flood impacts in Cambodia and Vietnam could equate to five percent of net operating profits after tax per year.

“Our analysis also showed a positive return on investment for adaptation investments.

“If that’s not persuasive for brands and manufacturers, new regulations in Europe are coming that could make failure to prevent harms to workers from climate breakdown a legal liability for brands. So, these investments make sense whatever your perspective: protecting workers, protecting earnings, or managing risk for employers and governments, brands and investors.”

Reeling under hazardous air quality levels, India’s capital New Delhi shut down all schools for an extended period on Wednesday, the latest in a series of measures to protect residents from growing air pollution. 

Farmers in Punjab and Haryana usually burn crop stubble left behind after rice is harvested in late October or early November to quickly clear their fields before planting wheat crops. The practice has been followed for years and the resultant smoke has typically accounted for 30% to 40% of Delhi’s October-November pollution, according to federal government’s air-quality monitoring agency SAFAR.

Gunther Vanbleu, a Belgian shrimps fisherman, rides his carthorse named Martha to catch shrimps in the Belgian coastal town of Oostduinkerke, Belgium. REUTERS/Yves Herman

Today’s spotlight shines a light on environmental swings and renewable energy shifts, as the last horseback shrimp catchers in Belgium bear witness to climate change’s impact on the North Sea’s ecosystem, while Namibia constructs Africa’s first decarbonized iron plant fueled solely by green hydrogen.

Belgium’s far-western coastal village of Oostduinkerke is the last place in the world where horseback shrimp fishing is still practiced, a UNESCO-recognised centuries-old tradition rather than a commercial enterprise.

The fishermen and women’s proximity to the coastal waters has made them front-line witnesses of how climate change is altering the ecosystem of the North Sea.

“We have less shrimp catch than we used to. But we also have more weevers and animal species that you didn’t see here before, which come from the Atlantic as the water warms up,” Vanbleu told Reuters. Weevers are small, venomous fish that tend to burrow into the sand with just their eyes visible.

A general view of the city and Christ Church in Windhoek, Namibia. REUTERS/Siphiwe Sibeko

Over in Namibia, the nation began construction of Africa’s first decarbonized iron plant, to be powered exclusively by green hydrogen, the country’s investment promotion body said.

Steelmaking is one of the most polluting industries in the world and the sector is seeking to shift away from coal-fired plants and towards the use of decarbonized iron.

The Oshivela project in western Namibia is backed by the German federal government, which has injected 13 million euros, and will use renewable energy to generate 15,000 tonnes of iron per year with no carbon emissions, the Namibia Investment Promotion and Development Board (NIPDB) said in a statement.

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