Improving physical working conditions on the factory floor can go a long way in increasing worker productivity, and profitability for the firm. The Lab has measured the impact of light, heat, and pollution on the factory floor, on worker productivity, and firm profitability. Our research speaks to the need for firms to recognize the extent to which these environmental factors negatively affect productivity, and regulate them for an optimal, and comfortable work environment for front-line employees.
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 2.40 C. 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.
Garment factories in India rarely control for temperature or pollution. Our research unequivocally confirms that environmentally friendly technology upgrades to mitigate them have first order benefits of environmental impacts, and can improve both worker welfare, and productivity. We can further offset the apprehended trade-off between adoption of environment friendly technologies and firm profits as demonstrated by the cost-effectiveness of these technologies and our ROI measures. Welfare, and productivity benefits can be as large if not larger than the environmental benefits that so often solely motivate the investment decision.