Forced Labor in China: A Dark Spot for the Solar Energy Industry 

Climate change and the increasing adoption of sustainable energy have led to the massive growth of the global solar panel industry. And while this is a hugely positive step to combat climate change, it comes at the cost of forced labor and repression for a particular group of people in China. Most of the world’s polysilicon, the main component used to make solar panels, comes from Xinjiang, China. According to Reginald Smith, the production of solar panels in Xinjiang uses forced labor from China’s Uyghur Muslims. He says the mining and production process is achieved under a massive system of coercion and the constant threat of imprisonment. And it gets worse. The government is involved. And the government, through the Chinese Communist Party, pays companies and offers subsidies for companies to take forced labor. Reginald believes the only to stop this blatant human rights violation is to stop buying or investing in companies linked to forced labor. 

Supply Chain Diversification

Supply chain diversification involves making changes aimed at broadening supply and transportation options. For example, if a manufacturing company sorely depends on a single supplier and the supplier goes out of business, it might find itself in a really tight spot. Branching out to more than one supplier cushions a company when circumstances change, allowing the company to adapt with almost no delays. 

The pandemic and the Russia-Ukraine conflict served as a stark wake-up call for companies that lacked supply chain diversification. And while a lot of things can disrupt your supply, Reginald believes having a robust supply chain can mitigate risks by ensuring you have a solid supplier base to cater to your business. It also makes it easy to drop companies that break the law, such as the solar panel forced labor in China. Because if you have options, you don’t have to buy from companies that violate human rights. 

Links and Resources:

Eventideinvestments.com

Reggie’s LinkedIn