Proposal by The Delta

THE DELTA ALAYA X NASDAQ CORPORATE SOLUTIONS ESG CASE COMPETITION 2020 PROPOSAL FOR DAKOTA INDUSTRIAL COMPANY LIMITED STRIVE FOR SUSTAINABILITY Team Name: The Delta Chan Cheuk Yin Lee Yuen Tung Wong Ting Yiu Wong Wing Tung (Team Leader) Research by Andrea Chang

Proposal for Dakota Industrial Company Limited Page 2 CONTENTS 03 Introduction 04 The use of energy Background & Challenges Goal Solution: Methane power plants Benefits: Achieve sustainability 07 The promotion of women empowerment Background Challenge 1 : Women's status of work Solution 1a : Fashion design workshops Solution 1b : Leadership development programme Challenge 2 : Difficulties faced by internal migrant women workers Solution 2 : Provision of social services 10 Conclusion 11 Appendices 12 References

Proposal for Dakota Industrial Company Limited Page 3 INTRODUCTION We, The Delta, take part in this competition with sincere anticipations. Delta, in ancient Greece, means change. Our group would like to provide useful suggestions to achieve progressive changes towards sustainability. Moreover, delta, in English, means triangle. We hope that our solutions could strive for a balance between three main pillars of sustainability, which are environmental, social and economic, creating a better future. Dakota Industrial Company Limited (Dakota) has endeavoured to attain sustainability in different aspects. Our proposal aims to assist Dakota to improve its business policies on the use of energy and the promotion of women empowerment in line with the ESG Goals. Figure 1: Relevant ESG Goals Source: https://www.un.org/sustainabledevelopment/ Source: https://pixabay.com/vectors/earth-globe- round-world-europe-160951/

Proposal for Dakota Industrial Company Limited Page 4 THE USE OF ENERGY Background & Challenges Current energy composition: Rising environmental concerns of the According to Dakota’s sustainability report Multinational Corporations (MNCs): The criticisms of fast fashion and the growth 2019, wood energy remained 61% of energy of public environmental awareness have urged the MNCs to re-evaluate their consumption, composing the largest part of production model. Many MNCs including the current customers of Dakota (E.g. H&M and the company’s energy consumption. FILA) would shoulder the responsibility in order to achieve social recognition. It is Although wood energy is renewable, it is believed that by minimizing the use of fossil fuels and adopting eco-friendly energy, inefficient in cutting greenhouse gas (GHG) Dakota would become more competitive. emissions. In fact, wood energy emits 1.5x Competition with neighbouring countries: Owing to the low production cost, the the carbon dioxide (CO2) of coal and 3x the Southeast Asian countries have become the largest manufacturer in the world. Besides COS of natural gas. Other options of Cambodia and Myanmar, where Dakota’s factories are located, neighbouring countries renewable and clean energy should be such as Vietnam and Bangladesh also perform well in the garment industry development. considered. Dakota should cooperate with the government to develop sustainable power generation. Goal In a bid to take up the corporate environmental responsibility and maintain competitiveness in the garment industry, switching to a cleaner energy would be the priority. Meanwhile, for a business, it is also vital to strive a balance between cost efficiency and environmental protection. Given that Dakota is encountering a sustainability dilemma while contemplating a shift to solar energy, we would like to present the company a new option, the biomass power.

Proposal for Dakota Industrial Company Limited Page 5 THE USE OF ENERGY Solution: Methane Power Plants We suggest Dakota to cooperate with the According to the China-funded development government to build methane power plants in project of hydroelectric plants in Cambodia, surrounding landfills by adopting the build– Dakota could negotiate with the government operate–transfer (BOT) model. to adopt the BOT model with a period of 35- year ownership. Usually, a methane power This suggestion is feasible financially and plant would be able to recover the cost after politically for Dakota. Using its factory, 5.6 years without government assistance. A Eastex Garment Co., LTD in Phnom Penh, win-win situation could be reached profitable Cambodia as an example, a methane power for Dakota while assisting the government to plant could be built in Dangkao Landfill, develop a new source of renewable energy. which is only about 15 km away from the factory, reducing the electric transmission Figure 3: Build–operate–transfer (BOT) model cost. In addition, this landfill receives 3000 tons of municipal solid waste (MSW) daily, which is estimated to provide 425 MW of power, nearly 3 times than that produced by the two proposed solar plants. Regarding the construction cost, a methane power plant only costs half the price of a solar power plant, which is just slightly higher than plants using fossil fuels. For the operation cost, it is estimated at US$0.0283/kWh for the generation of methane power, which is cheaper than that of solar power (US$0.03877/kWh) in Cambodia. With reference to the China- funded hydropower project that is previously mentioned, companies in need could gain Figure 2: Distance between Eastex subsidies from Asian Infrastructure Garment Co., LTD and Dangkao Landfill Investment Bank through the the Belt and Source: Google Map Road Initiative.

Proposal for Dakota Industrial Company Limited Page 6 THE USE OF ENERGY Benefits: Achieving sustainability cleaning company, would be motivated to launch a better waste treatment, as they could Environmentally, using methane power is generate profit by selling MSW to the power more effective in mitigating GHG emissions plant. As a result, less MSW would be than using solar power. Methane is a GHG disposed improperly and the hygienic which is produced during the decomposition condition could be improved. of MSW. The greenhouse effect would be intensified if it releases directly. By Economically, developing the methane power constructing a methane power plant, the plant could fulfill the increasing electricity methane in the landfill could be captured, demand of the public and provide more job burnt and decomposed, which could in turn opportunities. reduce GHG emissions by a maximum of 75%. Furthermore, its CO2 emission per The plans and benefits mentioned above are kWh electricity is only 45% of coal, which is also applicable to another factory of Dakota, environmentally friendly. Pak Chun Industrial LTD. in Yangon, Myanmar, which is located about 5 km away Socially, the solid waste management of from Htein Bin Dumpsite. Phnom Penh could be improved. It is estimated that 17,000,000 tons of MSW are untreated every year, which has devastated the hygienic condition in the downtown area. With a methane power plant, potential stakeholders, such as the government or Figure 4: Distance between Pak Chun Industrial LTD. and Htein Bin Dumpsite Source: Google Map

Proposal for Dakota Industrial Company Limited Page 7 THE PROMOTION OF WOMEN EMPOWERMENT Background worker population holds a line leader or office staff role. Dakota, as one of the In Dakota, with a majority of employees world’s leading garment manufacturers, could lead other companies to raise the status being female, promoting women of women in the industry by providing skills training and career progression opportunities. empowerment is undoubtedly important. It is Solution 1a: Fashion Design Workshops suggested that every company can not only Dakota could make good use of the resources act to benefit women in owned operations, they possess to provide opportunities for female workers to explore their interests and but also enable and influence women abilities in other aspects of the industry such as organizing fashion design workshops. Staff empowerment across the market by from the fashion design department could be invited to teach female workers how to collaborating with external partners. In view design and make career-appropriate apparel using the leftover fabric scraps in the of the current worker health projects and factories. Their works would be donated to Dress for Success, a global non-profit maternity measures that Dakota has organization that empowers women to achieve economic independence by providing implemented, we believe the company is a network of support and professional attire while their services have not expanded to willing to take bigger steps forward by Cambodia and Myanmar. The workshops could not only empower the women in increasing the status of work of women and Dakota, but also in turn support other women who share the desire to participate in the relieving their financial burden. workforce. Challenge 1: Women's status of work According to the report of CARE Australia, in Cambodia, although women occupy 85% of the garment sector’s total workforce, women are over-represented in lower status and lower skill roles. Under 4% of the female

Proposal for Dakota Industrial Company Limited Page 8 THE PROMOTION OF WOMEN EMPOWERMENT Solution 1b: Leadership Development Programme In a bid to achieve women empowerment in other female workers to work hard, causing a decrease in the absenteeism rate [2] and an the workplace, it is significant to let women, increase in the production efficiency [3]. By offering career progression opportunities and especially those from low-income improving the upward mobility of female workers, Dakota could further promote backgrounds, consider their job as a career. women empowerment. Through launching a leadership development [1] Salaries are as high as 108% more than their previous positions. programme, Dakota could offer [2] Absenteeism has been reduced from 8% to 3.6%. comprehensive training to experienced [3] Sewing lines led by females were 3% more efficient than the male-led lines, which female workers at grass-root level and translates to an added production worth up to US$624,000 every year. promote them to middle management positions. With reference to the Female Supervisors Leadership Programme of DBL Group, this Bangladeshi garment company holds a 165-hour training session that helps female workers develop both soft skills and technical skills essential for leadership positions. The programme has benefited both the employees and the company’s business. On one hand, the promoted workers have substantially raised their earnings to relieve their family burden [1]. On the other hand, their success and leadership have motivated Figure 5: Leadership Development Programme

Proposal for Dakota Industrial Company Limited Page 9 THE PROMOTION OF WOMEN EMPOWERMENT Challenge 2: Difficulties faced by internal offering factory dormitories with fee-waiving migrant women workers or half fee-waiving subsidies near the factories for the internal migrant women workers is Internal migration is prevalent in Cambodia suggested. Not only does it ease the women and Myanmar. For example, in Phnom Penh, workers’ financial burden from the rent, but it where two of the Dakota’s factories are located, also saves the transportation cost for daily a majority of female garment workers are commute to work. Besides the current day care internal migrants. However, a single person's allowance that Dakota is offering to women monthly cost (without rent) in Phnom Penh is workers, a childcare centre would be a more USD 587, which is about 6 times their effective solution since the cost of recruiting minimum wages. Added to that, women childcare givers is relatively high in cities. workers send home an average of 40% of their Affordable and qualified childcare services salary. Both the high living cost in urban areas could also be provided to them in order to and the family financial burden have imposed lower their expenses. In addition to relieving negative impacts on their quality of life. The their economic stress, a qualified childcare migrant women workers can barely access service could address the barriers which public services and meet their daily necessities. obstruct women workers from effective and For the sake of enhancing their financial long-term participation at work. For basic daily autonomy, we suggest Dakota provide more needs, Dakota could establish a self-financing social services to the female workers. grocery store, which would be run by the company in the factory sites. Necessities are Solution 2: Provision of social services sold below market price for the staff. The basic needs of women workers are ensured. The provision of social services is proposed to include three parts: the residence, the childcare, The ultimate goal of this idea is to create a and basic daily needs. First, for the residence, company town, where a wide range of amenities and social services are provided to women workers and their families, such as schools and education, recreational facilities, and different types of stores. The purpose of it is to further empower women workers by eliminating barriers that impede their personal development regarding the economic and social aspects.

Proposal for Dakota Industrial Company Limited Page 10 THE PROMOTION OF WOMEN EMPOWERMENT Presently, there are several companies running Figure 6: Company town of Eastex Garment Co., LTD company towns around the world. For instance, Grasim Industries & Aditya Birla Group, a Source: Google Map textile, fibre, and chemical manufacturing industry in India. It has created two company towns in Kumarapatnam, Karnataka, and Nagda, Madhya Pradesh. A middle school and a healthcare center are built near the textile factories, qualified staff hostels are also provided for workers. Dakota could take the aforementioned example as a reference. With strong material support to migrant women workers, it is believed that Dakota could esculate women empowerment to the next level. CONCLUSION With a new option for energy generation and several innovative measures for promoting women empowerment, we hope that we could provide fresh insights for Dakota to proceed on its journey of sustainability. It would certainly be our honour if the company would consider the above suggestions and put them into practice. We look forward to seeing Dakota's progressions in sustainable development.

Proposal for Dakota Industrial Company Limited Page 11 APPENDICES The provision of social services is threefold, including residential, childcare, and basic daily needs. First, for residence, offering factory dormitories with fee-waiving or half fee-waiving subsidies near the factories Afpopr ethnediixnt1er:nCalampaigcriatynt-wweoimghetnedwoarvkeerras gise scuogngsetsrtuedct. iNonotcoonsltyodf odeisffietreeanste ttyhpeews oomf penowweorrkpelrasn’ tfsin(ainnc$iaUl S) burden from the rent, but it also saves the transportation cost for daily commute to work. Besides Dakota’s day care allowance to women workers, a childcare centre will be a more effective solution since the cost of recruiting daycare child givers is relatively high in cities. Quality and affordable childcare services could also be provided to them in order to lower their living costs in child caring. In addition to relieving their economic stress, a qualified childcare service can address the barriers which obstruct women workers from effective and long-term participation at work. For basic daily needs, Dakota could establisha self-financing business -- grocery stores run by the company in the factory sites. Necessities are sold below market price for the staff. The basic needs of women workers are ensured. Appendix 2: Data regarding the women Dress for Success has served (2018)

Proposal for Dakota Industrial Company Limited Page 12 REFERENCES Actionaid. (2019). Cambodia’s women garment. workers fight for decent work conditions from big brands. Retrieved from https://actionaid.org.au/cambodias-women-garment-workers/ Aditya Birla Group & Grasim Industries Limited. (2020). Annual report 2019-2020. Retrieved from https://www.bsr.org/reports/BSR_Empowering_Female_Workers_in_the_Apparel_Industry.pdf Bruum, J., Kvist, T., & Iskov, H. (2019, December 20). Biogas, Biomethane and Electro-methane cost comparison. Retrieved from https://www.dgc.dk/sites/default/files/filer/publikationer/Electrolyser%20and%20methanisation %20economics_final%20(1).pdf Business Call to Action Official Website. Empowering women in the workplace: Female employees fast tracked from line workers to supervisors. Retrieved from https://www.businesscalltoaction.org/resources/empowering-women-workplace-female- employees-fast-tracked-line-workers-supervisors CARE Australia. (Mar 2017). Women in Cambodia’s Garment Industry: Their Work, Their Safety. Retrieved from https://www.care.org.au/wp-content/uploads/2017/04/SHCS_Brief-Women- Cambodia-Garment-Industry-March-2017_CA.pdf Dakota Industrial Co. Ltd. (2020). 2019 Sustainability Report. Retrieved from http://www.dakota.com.hk/wp-content/uploads/2020/06/2020-Report_final-for-download.pdf Dakota Industrial Co. Ltd. Official Website. Production Units. Retrieved from http://www.dakota.com.hk/about-us/production-units/ Dress for Success. (2019). Annual Report 2018. Retrieved from https://dressforsuccess.org/wpcontent/uploads/2019/11/Dress-for-Success-2018-Annual- Report.pdf

Proposal for Dakota Industrial Company Limited Page 13 REFERENCES Dress for Success Official Website. Affiliate List. Retrieved from https://dressforsuccess.org/affiliate-list/ Eaton. G., & Jutras, J.L. (2005). Turning Methane into Money: Cost-Effective Methane Co- Generation Using Microturbines at a Small, Rural Wastewater Plant. Retrieved from https://www.aceee.org/files/proceedings/2005/data/papers/SS05_Panel02_Paper02.pdf Google. (2020). Map of Yangon, Myanmar. Retrieved from https://www.google.com.hk/maps/@16.8850374,96.033005,6886m/data=!3m1!1e3? hl=en&authuser=0 Google. (2020). Map of Phnom Penh, Cambodia. Retrieved from https://www.google.com.hk/maps/@11.5404229,104.8129636,881m/data=!3m1!1e3? hl=en&authuser=0 Hall, M. (2019, September 6). Cambodia tender secures lowest solar power price in Southeast Asia. PV Magazine. Retrieved from https://www.pv-magazine.com/2019/09/06/cambodia-tender- secures-lowest-solar-power-price-in-southeast-asia/ Käkönen, M., & Thuon, T. (2019). Overlapping zones of exclusion: carbon markets,corporate hydropower enclaves and timber extraction in Cambodia. The Journal of Peasant Studies, 46(6), 1192-1218. Retrieved from https://www.tandfonline.com/doi/pdf/10.1080/03066150.2018.1474875 Kimmarita, L. (2019, May 8). Dangkor district residents demand dumpsite moved. The Phnom Penh Post. Retrieved from https://www.phnompenhpost.com/national/dangkor-district-residents- demand-dumpsite-moved Lee, U., Han, J., & Wang, M. (2017). Evaluation of landfill gas emissions from municipal solid waste landfills for the life-cycle analysis of waste-to-energy pathways. Journal of Cleaner Projection, 166, 335-342. Retrieved from https://www.sciencedirect.com/science/article/pii/S0959652617317316

Proposal for Dakota Industrial Company Limited Page 14 REFERENCES The provision of social services is threefold, including residential, childcare, and basic daily needs. First, for residence, offering factory dormitories with fee-waiving or half fee-waiving subsidies near the factories NfaotriotnhealinRteernneawl ambilgeraEnnt ewrogmy eLnawboorakteorsryi.s (s2u0g1g2es, tNedo. vNeomt boenrl)y. dLoiefes iCt yecaslee GthreewenohmoeunsewGoraksers’ financial burEdmenisfsroiomnsthferoremntS, boulat ritPahlsootosvavoeltsatihces.trRaentsrpioervtaetdiofnrocmost for daily commute to work. Besides Dakota’s dayhtctaprse:/a/lwlowwwan.cneretlo.gwoovm/deoncws/ofryk1e3rso,satic/5h6il4dc8a7r.epdcefntre will be a more effective solution since the cost of recruiting daycare child givers is relatively high in cities. Quality and affordable childcare services could Naoljseodbeehip, rPo.v,idHeedidtoartih, eMm.,inAotardeei,r Ato.,loNweedratehie, iMr l.i,vi&ngKcuorsdtsesintacnhi,ilEd .c(a2ri0n1g6. )I.nEandvdiirtoionnmtoenrteallieving their ecoansosmesiscmsternestso, fa eqnuearligfyiedprcohdiludcctairoensferrovmicelacnandfaidlldrgeasss pthlaenbtasrrbiyersuswinhgichLobnsgt-rruacnt gweoEmneenrwgyorkers from effeAclttievrenaantdivleonPgla-tnenrmingpa(rLticEiApaPti)oannadt wIPoCrkC. Fmoer tbhaasnice deasitliymnaeteiodsn, mDaekthootadcso: uAldceassteabsltiushday soeflfT-feinharnacni.ng busSinuesstsai-n-agbrloeceErnyesrtgoyreTs erucnhnboylothgeiecsomanpdanAysisnesthsemfeanctso,ry16si,te3s3. -N42ec. eRsseittrieiesvaerde sfrooldmbelow market price forhtthtepss:ta//fwf. wTwhe.sbcaiseinc cneedeidrsecotf.cwoomm/esnciwenorckee/rasrtaircelee/nasbusr/epdi.i/S2213138816300121? casa_token=UtYa_SliRPgAAAAA:K24dgZOCMu744nx2qggSnGiqKSXbZ88jI9mY64DvKv1dQ szdP3Jj3HtXWtOf2s-ee4Ttfw Numbeo. (2020). Cost of living in Phnom Penh. Retrieved from https://www.numbeo.com/cost-of- living/in/Phnom-Penh Numbeo. (2020). Cost of Living Comparison Between Denmark and Cambodia. Retrieved from https://www.numbeo.com/cost-of-living/compare_countries_result.jsp? country1=Denmark&country2=Cambodia Searchinger, T.D., Beringer, T., Holtsmark, B. et al. Europe’s renewable energy directive poised to harm global forests. Nat Commun 9, 3741 (2018). https://doi.org/10.1038/s41467-018-06175-4 Sufian, M.A., & Bala, B.K. (2007). Modeling of urban solid waste management system: The case of Dhaka city. Waste Management, 27(7), 858-868. Retrieved from https://www.sciencedirect.com/science/article/abs/pii/S0956053X06001395? casa_token=bX52fx-G_zIAAAAA:mvjWldZ21TYnavF5wf-rL599- Rke6uzPfMy23DSpKxV9FhYI-sRZVbmPEZwZM-JCTIyqtQ U.S. Energy Information Administration. (2017, July 5). Construction costs for most power plant types have fallen in recent years. Retrieved from https://www.eia.gov/todayinenergy/detail.php? id=31912