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Garment factories going green, driven by buyers and competition

Finds CPD study, also notes self-motivation as another major factor

FE REPORT | October 04, 2023 00:00:00

Self-motivation, market-driven factors including buyer requirements, and sustaining competitiveness are the key factors that motivate the greening of garment and textile factories in the country, according to a new Centre for Policy Dialogue (CPD) study.

It also found that government regulations related to environmental standards have a relatively weaker influence in this regard.

According to the study findings shared on Tuesday, four major types of barriers have been identified that factories in the local textile and RMG sector face while embarking on their journey towards green transition.

Policy and institutional barriers included a lack of harmonisation of policies and regulations, regulatory and policy uncertainty, weak regulatory, management and monitoring systems, and enforcement.

The absence of market-driven incentives like premium prices for good products, lack of information, awareness and knowledge about green technologies and best practices and access to finance also restrict firms' capacity to embrace sustainable technologies, according to the study.

The CPD study titled "Securing Green Transition of the Textile and Readymade Garments Sector in Bangladesh" was carried out on owners and managers of 403 factories and 4,541 workers in the country.

CPD Research Fellow Muntaseer Kamal revealed the findings at a dialogue chaired by CPD Executive Director Dr Fahmida Khatun held on Tuesday at a city hotel.

State Minister for Planning Dr Shamsul Alam was the chief guest while EU Ambassador to Bangladesh Charles Whiteley and Sweden Ambassador to Bangladesh Alexandra Berg Von Linde, among others, spoke.

The study found that 69.70 per cent of factories are self-motivated to obtain green certificates.

Besides, 54.55 per cent of the owners have taken green initiatives thanks to their marketing strategy, while 39.39 per cent obtained different green certificates for competitiveness in the market, it showed.

Major areas of green investment by factories included technologies related to energy conservation, renewable energy, building-level energy metre, controlling air and dust pollution, management of solid waste and wastewater and building-level water metre.

Large factories are more likely to be aware of green certification than smaller ones, Mr Kamal said, adding that the main perceptions of workers regarding green practices in factories are that it reduces health hazards and improves productivity.

Showing the average green investment in the last five years per factory, he said large factories have made Tk 78.07 million in investment, which is 36.98 per cent of their total investment.

Despite lower total investments, small and medium-sized, as well as micro-sized factories, allocate a higher percentage of their total investment -- 44.84 per cent and 53.99 per cent respectively -- toward green initiatives, he added.

The study recommended developing a comprehensive strategy that covers all aspects of a green transition for the textile and RMG sector.

This should include short-term and long-term goals, indicators, targets, timelines, roles, budgets and monitoring mechanisms.

Other suggestions included developing a common framework for green standards and certification, providing assistance to obtain green-related certifications, market-driven incentives like tax breaks and subsidies, withdrawing fiscal support to the polluters and offering premium prices for products from green factories.

State Minister for Planning Dr Shamsul Alam said Dhaka is the most polluted city and this issue needs to be addressed.

He asked for recommendations for green transition policy, saying they would incorporate the necessary ones into the Ninth Five-Year Plan.

Explaining the study's context, Dr Fahmida Khatun said the green economic transition is crucial for sustainable economic growth thanks to the increasing demand for environmentally and climate-friendly production and consumption.

RMG is an important sector considering its contribution towards economic growth and employment, as well as women empowerment, she said, adding there are many green certificates ranging from water, waste, to chemical management.

There are also various requirements from brands and buyers for such green certifications, each with their own specific standards, she said, suggesting unified and harmonised standards.

EU Ambassador Charles Whiteley said more regulations are coming, as the EU has a circular economy action plan, textile regulations, recycling initiatives and the latest due diligence that could ultimately impact the Bangladesh industry and how they do business.

Regarding green premiums for the green transition, he said it is important for ensuring decent wages and EU consumers also need to acknowledge this and be willing to pay more, which, according to him, is a "tricky mix".

He also talked about wages in the RMG sector, saying they are not sufficient for a family, particularly one with kids.

"The onus is not only on the government, not just on the industry but also on brands and buyers," he said, suggesting real engagement and partnership to address the challenges.

Deputy Head of Mission, Embassy of the Netherlands in Bangladesh, Thijs Woudstra, said, "There is no alternative to improving working conditions, wages and protecting workers' rights."

Not only RMG but also other sectors should be sustainable and that could be possible if the right policy and framework are taken and properly implemented, he noted.

Explaining the different measures taken by the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), its vice president Md Shahidullah Azim said the RMG industry has already made unparalleled advancements in green transition. They are considered a global model of a green manufacturing hub and want to continue this momentum toward excellence.

"While the factories are making significant efforts to make their production greener and cleaner, the price doesn't reflect it. Because these initiatives come at a higher cost," he said, suggesting research focusing on how they can ensure a reasonable price structure for green transition in this sector.

He requested the CPD to focus on other hazardous industries that pollute the environment.

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