No sustainability, no Bangladesh.
That’s the opinion of Ranjan Mahtani, founder and executive chairman of Epic Group, a Hong Kong-based garment manufacturer whose sprawling operations span Bangladesh, Ethiopia and Vietnam.
Speaking at the Sustainable Apparel Forum at the Radisson Blu Dhaka Water Garden in the South Asian nation’s capital of Dhaka earlier this month, Mahtani recalled his personal evolution with the concept, something he now calls “very close to my heart.”
“I remember 10 or 12 years ago, my sustainability experts came to me and said, ‘We want solar power.’ I said, ‘Who’s going to make these big investments?’” he said. “And today we look at this very, very differently. As an entrepreneur, obviously, you’re running a business to be profitable. But what else is our responsibility? From our company standpoint, our two foremost responsibilities are people and the environment.”
Those investments, prudently made, can deliver rich returns, Mahtani said. Happier workers, for one thing, are also more efficient workers. Epic Group’s photovoltaic panels, for another, have helped the company better grapple with gas hikes and shortages rippling across Bangladesh, a consequence of runaway inflation and Russia’s war on Ukraine. But the country, which is home to nearly 200 LEED-certified factories—the most anywhere—can do better.
“I think Bangladesh should always look toward the next step,” he said. “Because yesterday’s best is not good enough today.”
As the world’s second-largest clothing exporter—China is the first—Bangladesh is tremendously important to the fashion industry. In 2022, its nearly 4,000 export-oriented factories shipped out garments worth $42.6 billion. This year, the government is anticipating deliveries worth $46.8 billion. Put another way, one out of 10 garments sold in the United States hails from Bangladesh. In the European Union, it’s nearly one in five.
But casting a shadow over Bangladesh’s signifiant progress is the cost of that success. The Energy Policy Institute at the University of Chicago has rated Bangladesh the country with the world’s worst air quality every year since 2018. The average Dhaka resident, one study from the school found, loses roughly eight years of his or her life as a result of the traffic, construction and industrial pollution.
In addition, the country continues to rank among the International Trade Union Confederation’s 10 worst countries for working people due to what it describes as regressive laws, opposition to union formation and crackdowns on strikes involving disproportionate brutality by the police. The International Labour Organization and the Bangladeshi government have also locked horns on the progress of the latter’s alleged non-observance of conventions relating to labor inspections, freedom of association and collective bargaining. Meanwhile, the office of the U.S. trade representative has maintained its suspension of Bangladesh’s trade privileges, which were put on ice following the Rana Plaza collapse in 2013. Its most recent review cited “concerns in the areas of freedom of association, collective bargaining, child labor and forced labor.”
“We applaud all of the efforts Bangladesh has made over the past decade,” said Peter D. Haas, U.S. ambassador to Bangladesh, at the same event. “But we still remain concerned that too many workers across Bangladesh cannot exercise basic rights to freedom of association and collective bargaining. We’re also concerned that workers in export processing zones have no access to these rights at all. So we remain committed to supporting workers’ rights worldwide. Because we believe that an empowered workforce is also directly linked to sustainability.”
To sustain its garment sector, Bangladesh needs to “move up the value chain” by exporting higher-value-added products, which earn better prices, Haas said. He added that “strong labor protections can help achieve these goals.”
There’s a broad consensus, after all, that Bangladesh’s 4.1 million garment workers have never been safer. Since the implementation of the Accord on Fire and Building Safety in Bangladesh, now the International Accord for Health and Safety in the Textile and Garment Industry, more than 120,000 fire, building and electrical hazards in over 1,600 factories have been fixed.
The story of Bangladesh is one of a “developmental paradox,” said Naureen Chowdhury, head of labor rights at the Laudes Foundation, which collaborated with the Bangladesh Apparel Exchange to organize the event.
“I think we’re at a critical juncture given the global crises that we see via climate breakdown, inequality [and] economic turbulence,” Chowdhury said. “I think we are at the crossroads where we can continue to invest and build on the development journey that Bangladesh is on through discussions and follow-on actions. I think we have the resources, the intellectual capacity [and] the knowledge to translate our intentions or aspirations into actions for the betterment of not just the industry, but the country as a whole.”
Indeed, sustainability isn’t simply about greener factories, said Salim Rahman, managing director at KDS, one of Bangladesh’s oldest garment manufacturers, with clients such as H&M Group, Kmart and Sears.
Outside the main hall, colorful panels hung on a wall of straw and wood depicted a more expansive definition, including “green jobs,” “worker wellbeing” and “fair and equitable purchasing practices.” One banner proclaimed that “cheap fashion may be cheap in terms of the financial cost, but very expensive when it comes to the environment and human life.” Another, quoting Mahatma Gandhi, said that there is “no beauty in the finest cloth if it makes hunger and unhappiness.”
“Sustainability is the balance between the environment, equity and commerce,” he said. “It is also about how we remain commercially viable to innovation, digitization, diversification and be[ing] more productive,” he said.
This shouldn’t be the suppliers’ sole burden to bear, Rahman noted. “While as a supplier, we have been making efforts to make our production process clean, more energy efficient and environmentally friendly, buyers also have a responsibility to send support to the supplier, improving its social and environmental performance,” he said.
Lawmakers, Rahman added, have a duty to make regulatory reforms regarding due diligence. And for their part, financial institutions should be helping small and medium-sized enterprises access funding not only for sustainable improvements but also for the transition to Industry 4.0 so they can become smarter, more efficient and more profitable.
The forum’s exhibition space touted several made-in-Bangladesh wins. Upcycle Labs by PDS can turn textile waste into home decor and fire-resistant bricks, helping companies monetize their castoffs while boosting their green bonafides. At Epic Group’s state-of-the-art manufacturing facility, real-time data collection and automation help it improve its practices. Same with Noize Jeans, whose machines use 50 percent less energy and up to 70 percent less water and chemicals to churn out denim from recycled polyester, organic cotton and hemp. Outerwear company 4A Yarn Dyeing uses rainwater harvesting to save nearly 450,000 liters of water a year. Snowtex employs renewable energy to slash its carbon emissions by 2,390 metric tons annually.
Faruque Hassan, president of the Bangladesh Garment Manufacturer and Exporters Association and managing director of Giant Apparels, said that sustainability “sits at the top” of the trade group’s agenda. The linear, cradle-to-grave model that the nation’s garment industry has followed since its inception in the early ‘80s needs to change, he said. The Bangladesh Apparel Exchange will be grappling with the subject in greater detail on June 15, when the inaugural Bangladesh Circular Economy Summit and the Bangladesh Circular Apparel & Textiles Forum takes place in the same venue.
“We want to create a sustainable future and one of the key strategies to do this is through resource accounting,” Hassan said. “The circular economy can build a pathway for green environmental sustainability and promote a regenerative economic model. While we move towards a circular economy, the speed and effectiveness of our industry have to continue to improve.”
Hassan acknowledged that awareness about environmental and social responsibility has only grown, with mandatory due diligence legislation following on its heels. The European Union is in the process of finalizing its Corporate Sustainable Due Diligence Directive. In New York State, the Fashion Sustainability and Social Accountability Act—better known as the Fashion Act—seeks to hold to account fashion companies making at least $100 million in revenue.
But while regulation is necessary, Bangladesh doesn’t want country- or trading bloc-specific legislation but rather laws that are “accepted by all the players in the global fashion industry,” he said.
“So basically we want one level playing field across the supply chain,” Hassan said. “The fashion industry needs to agree on a globally standard approach. Otherwise, it will be too difficult for suppliers to comply with a thousand different structures.” Bangladesh should build up its capacity for this, he added, but other supply chain stakeholders have their own “role and responsibility.”
Pointing to the recently opened Centre of Innovation, Efficiency and Occupational Safety and Health, Hassan said that the industry’s commitment is to “take R&D to the next level of sustainability and we are looking comprehensively at all the possible areas.”
“We need to put emphasis on building up a resilient and sustainable business model to overcome future challenges,” he said. “For that we need more support from the advanced economy in terms of product and fiber diversification, innovation, technological operation, rescaling and upskilling of people.”
The “existential threat” of climate threat aside, sustainability also means sustainability in prices for exporters, said Saber Hossain Chowdhury, chairman of the parliamentary body on the Ministry of Environment, Forest and Climate Change.
“Based on various studies I’ve seen, our exporters probably receive about anything from 17 to 20 percent [of the price of the product],” he said. “The rest—80 percent—is lost during intermediate layers. So how can we talk about the sustainability of the fashion industry, when the basic concept of pricing and how the price is distributed is not addressed? If we don’t do that, then conditions in Bangladesh will not improve to the extent we want them to.”