Readymade garment industries going green

Dhaka,  Sat,  23 September 2017
Published : 06 Aug 2017, 19:03:35
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Readymade garment industries going green

Md. Sajib Hossain and Enamul Hafiz Latifee
In recent times, the structure of global manufacturing businesses has been taking the new shape of eco-friendliness on a sustainable basis. Such a change can be attributed to global warming, climate change, loss of natural resources and biodiversity and various types of pollution resulting from manufacturing activities. It has been a dilemma for decades: the choice between  'massive industrialisation' and  'protecting environment' with utmost priority. 

On September 25, 2015, the UN member states adopted a set of goals, widely known as 'Sustainable Development Goals (SDGs)' to end poverty, protect the planet, and ensure prosperity for all. These can be viewed as a middle way between protecting environment and industrialisation, aiming at initiating specialised and sophisticated means of industrialisation that would not hurt environment or would minimise the negative externalities.

A write-up of the World Economic Forum (WEF) titled 'Nine things you absolutely have to know about global warming' has pointed out that "human activities such as burning oil, coal and natural gas and deforestation have increased the amount of carbon dioxide by more than a third since the Industrial Revolution."

Against this backdrop, green industrialisation has made a paradigm shift towards a low carbon, resource and energy-efficient, climate-friendly industrial activities. This is the pathway for retaining eco-friendly and sustainable businesses. And this eco-friendly manufacturing process will surely make great contribution to turning of the planet into a better and livable place for the current generation and generations to come. It is encouraging to note that China, known as the largest emitter of carbon dioxide in the world, is increasingly embracing a low carbon, cleaner and climate-resilient economic development path. China's green industrialisation footprint of renewable energy-based development is becoming stronger as the country has pledged to spend at least US$360 billion on renewable energy by 2020 in contrast to traditional coal-based ones. This will make China the world leader in renewable energy (solar and wind power). 

In a similar fashion, India, the third largest carbon dioxide emitter, is also focusing on green industrial policy with a view to reducing energy consumption in energy-intensive industries through development of renewable energy.

BANGLADESH'S RMG INDUSTRY: When it comes to Bangladesh, the major industrial sector of the country -- the readymade garments (RMG) -- is increasingly  adopting the green industrial approach. It is to be noted that the RMG indusry has impacted the Gross Domestic Product (GDP) of Bangladesh positively by 12.36 per cent of share, engrossing export earnings of US$28.14 billion (i.e., 80.7 per cent of the total export earnings) in the Fiscal Year (FY) 2016-17 becoming the biggest strategic sector of the country.The apparel sector is currently championing green industrialisation in conformity with the changes in the recent global manufacturing business. 

An article in the Economist in 2017 titled 'Looking good can be bad for the planet', said that 'massive amounts of energy, water, and other resources are needed to make clothes'. Therefore, it is clear that considering the betterment of the planet and its limited resources, 'greenisation' must be implemented in end-to-end value chain of the world RMG industry that also requires rational pricing from buyers' side to offer to its vendors that would enable not only Bangladeshi apparel investors but also manufacturers from all other countries to make additional investments into their businesses.

The current scenario of Bangladesh's RMG industry in building green establishments is a welcome development. The green establishment is a vital part of green industrialisation that is usually designed to minimise negative environmental impacts while bringing efficiency in water, energy and usage of other resources and protecting occupants' health. According to US Green Building Council (USGBC) project in Bangladesh, there are 20 Gold, 13 Platinum, and 5 (five) Silver-certified RMG factories while around 78 factories are in the certification process as of July 2017. Bangladesh has the top Leadership in Energy and Environmental Design (LEED)-certified factories in the world, namely Envoy Textiles, Remi Holdings, and Plummy Fashions which have taken the image of garment and textile factories of Bangladesh to new heights. The way that the apparel sector has pursued in Bangladesh could be a game-changing one for the country if other industrial sectors do replicate it.

THE WAY FORWARD: Although Bangladesh's RMG industry is trying to adjust to this trend, some challenges exist in implementing green industrialisation that could be overcome by pursuing the following:

n First and foremost, the government should make a regulatory framework for green industry development. No integrated policy has so far been formulated to be followed by manufacturing industries willing to 'Go Green';

n Sufficient technical capacity and expertise are not there for fostering green industrialisation and maintaining the standard as the performance of the factories requires continuous evaluation;

n So far there is no significant financial incentive in terms of tax relief, policy supports, subsidy on green technologies (though there is an initiative called Green Transformation Fund, but it has inadequate fund). 'Greenisation' of Bangladesh's RMG industry has been solely financed by factory owners themselves. However, Finance Minister Abul Maal Abdul Muhith came up with a proposal while presenting the budget for FY2017-18 that green RMG factory owners will enjoy 1.0 per cent cut in corporate tax from this year. This corporate tax cut for green industrialists, according to many, should go up to 5.0 per cent at least.

n Currently, Bangladesh Bank provides a loan under its green banking policy sice 2010 for financing green industrialisation but the final interest rate under this window reaches 9.0 per cent (Bangladesh Bank 5.0 per cent + commercial bank 4.0 per cent). Therefore, urgent initiatives should be taken to make sufficient loan available with low-interest rate, preferably at 5.0 per cent;

n The cost of adopting green or eco-friendly industry or production technique has not been reflected in the price of products which is somewhat acting as a discouragement for the others to go green. In a 'shared responsibility' model, buyers should participate in 'greenisation' practices, reflected at prices of apparels that come from green RMG factories.

For a better future, a better world, and a sustainable value chain of apparel making, it is a must to implement green industrialisation complying with the objectives of the Seventh Five Year Plan that are in compliance with the UN's SDGs.

Md. Sajib Hossain is Senior Assistant Secretary, R&D Cell, BKMEA and Enamul Hafiz Latifee is Programme Manager, Market Development, BASIS.

enamul.hafiz.sust@gmail.com

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