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Puma Ups Commitment to Decarbonize Bangladeshi Supply Chain

As the prospect of catastrophic global warming continues to loom large, the Embassy of Denmark in Bangladesh, the Embassy of the Kingdom of the Netherlands in Bangladesh and Puma are renewing their commitment to a program that seeks to decarbonize Bangladesh’s garment sector, the world’s second-largest after China.

The brainchild of the International Finance Corporation (IFC), the Advisory Partnership for Cleaner Textiles, otherwise known as PaCT, works with brands, suppliers, industry groups, financial institutions and governments to help mills and factories identify, finance and implement water, energy and chemical-saving improvements.

The government of Denmark, through the Danish International Development Agency, has pledged additional funds of $3.19 million to “enhance RMG sector-wide activities” in the South Asian country, which is still recovering from the fallout of the Covid-19 pandemic.

“The latest UN IPCC report on climate change has reminded us once again to take climate action now to keep the global average temperature to well below 2 degrees Celsius,” Winnie Estrup Petersen, Danish ambassador to Bangladesh, said in a statement. “The fashion industry alone contributes around 10 percent of global emissions. PaCT is supporting cleaner production and green growth in the RMG sector toward a sustainable Bangladesh.”

Veronique Rochet, senior head of sustainability at Puma, said that the German sportswear brand will be tapping PaCT’s advisory services to accelerate its efforts to cut fossil-fuel-derived carbon emissions in its Bangladeshi supply chain. Puma, which recently warned of market headwinds in China, has promised to slash its direct Scope 1 and 2 emissions by 35 percent and its indirect Scope 3 emissions by 60 percent, relative to sales, by 2030.

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“At Puma, we are committed to climate action in alignment with the UN’s Sustainable Development Goals and Science Based Target Initiative,” Rochet said. “We are not only reducing the carbon footprint from our own operations but more importantly also from our supply chain. As Bangladesh is an important sourcing market for us, the PaCT program helps our supplier factories to optimize their resource consumption and minimize their environmental impact.”

PaCT will also be expanding its scope through a grant agreement with the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), the country’s leading trade group, with an eye on boosting the sector’s backward linkages and bolstering exports through product diversification. A March McKinsey report noted that Bangladesh needs to start pivoting from basics such as T-shirts, trousers and sweatshirts, which face the biggest discount pressures, to more complex products like outerwear, tailored items and lingerie in order to remain competitive.

“The Bangladesh RMG industry needs to find new ways to conduct business to become more resilient and adapt to shifting global demands,” said BGMEA president Faruque Hassan. “Fiber diversification, online marketplace and a post-Covid sustainable roadmap for Bangladesh’s RMG industry are very pertinent topics for research at this juncture. We are grateful to IFC for their support in conducting this research which will help the industry to formulate its strategy.”

Launched in 2013, PaCT works with more than 380 facilities in Bangladesh to improve their resource efficiency and fine-tune protocols around pollution and wastewater treatment. To date, it has helped avoid an annual 18,779 metric tons per year of greenhouse gas, the​​ equivalent of removing 134,572 passenger vehicles from the road, and save an annual 27,637,931 cubic meters of water, the equivalent of meeting the water needs of 1.5 million Bangladeshis, the IFC said.

Puma aside, the program’s brand and retail partners include Gap Inc., Levi Strauss, Tesco and VF Corp., which owns Timberland, The North Face and Vans, while Jeanologia, Omera Solar and Emkay serve as technology providers. Further decarbonization in the garment sector, the IFC said, can promote a greener recovery from Covid-19, generate new jobs and help Bangladesh build back better.

“A big lesson from Covid-19 is the need to re-orient the global economy onto a more sustainable path,” said Nuzhat Anwar, IFC’s acting country Manager for Bangladesh, Bhutan and Nepal. “These agreements will help factories become more climate conscious and brands to decarbonize their supply chains effectively, contributing to economic recovery and resiliency of the sector.”