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Turkish Manufacturers Ramp Up Sustainability Commitment

It is rare for the heads of several organizations to be in agreement—but that was exactly the case earlier this week at the Raffles hotel in Istanbul. The leaders of Turkey’s top industry groups all nodded in green agreement that the best way forward for the country lies in expedited compliance with the European Union (EU) Green Deal.

Drawing up a roadmap for the way forward and the adaptation process of the Green Deal, with 40 action points, and an initial three-month window, with various checkpoints, the group leaders concurred that ideation needed to speed into action. 

“We are not trying to market ourselves out as a cheap country. We are trying to sell sustainable products from Turkey,” Mehmet Kaya, board member of the Istanbul Apparel Exporters’ Association (IHKIB) and head of the Apparel Sector Joint Sustainability Committee, told Sourcing Journal. 

More than 60 percent of Turkey’s $20 billion apparel exports are to the EU. 

The other associations in the discussions included the Aegean Apparel Exporters’ Association (EHKİB), Uludağ Apparel Exporters’ Association (UHKİB), Mediterranean Apparel Exporters’ Association (AHKİB), Denizli Exporters’ Association (DENİB), and top managers of purchasing groups and sector representatives for brands. 

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The European Green Deal is expected to transform the trading bloc into a modern, resource-efficient and competitive economy, ensuring no net greenhouse gas emissions by 2050, economic growth is decoupled from resource use, and that no person or place is left behind.  One third of the 1.8 trillion euros ($1.96 million) in investments from the Next Generation EU Recovery Plan will finance the Green Deal. The target is for the EU to become the first climate-neutral continent, according to the European Union’s official website. 

“We are the third-largest supplier of apparel to the EU,” noted Mustafa Gültepe, president, Turkish Exporters Assembly (TİM) and IHKIB. “To protect and increase our market share, we must make our preparations with this fact in mind, and rapidly transform our infrastructure. We have to maximize our green production capacity.” The EU announced the Green Deal in December 2019, “‘not only as a climate policy but also a designation of an economic transformation program,” he pointed out.

But with Turkey in the throes of economic turmoil, where will the money for this transformation come from? Most of the required changes require strong financial commitments.

“We expect our partners to review their purchasing policies and support the financing and investment needs on the production side while they are setting their own sustainability targets. With the projects prepared by IHKIB, we benefit from EU grants effectively,” Gültepe said, adding that “with the actions in this document, which is a roadmap for the sector, we are committing to sustainability for our European business partners.”

“We’re not expecting them to pay us more for nothing, but if they expect the environment to be safe, it has to be supported, so we are expecting brands and companies to be part of this,” Kaya added. “For example, we have been moving away from coal to use natural gas and are working towards renewable energy.”

Kaya emphasized the need for vital financial support, saying that no company could provide the harmonization process with its own resources. “Quality has a value and value has a cost. The Turkish apparel industry should no longer seek competitiveness over cheap products. Therefore, we need to complete the transformation very quickly. It is also vital to ensure that necessary incentive mechanisms are provided by the EU, thinking of the positioning of the apparel industry of Turkey within the European ecosystem.”

Noting that the need for recycled and sustainable raw materials will increase rapidly, he emphasized the need to complete the necessary infrastructure quickly.

The process of enacting this change has taken brain-storming from all stakeholders.

“We believe that we will turn the green transformation process into an opportunity with the partnership approach,” Kaya said. “Rather than being just a link in the regular supply chain, we should be an indispensable unit in the ‘partnership chain’. Here, the criteria of ‘compliance’, ‘competitiveness’ and ‘sustainability’ come to the fore.”

“We have prepared our sustainability strategy and action plan with this understanding. The contribution of all our stakeholders to the study was very important. We set out our targets with a participatory, inclusive and active approach. As a result of our analysis and feedback from the authorities, we gathered the transformation agenda under six components and created 40 actions,” Kaya added.

As Turkey weathers intense political and economic changes—inflation has been at more than 80 percent over the last year, with a falling Turkish lira, a shortage of foreign exchange looming, and elections around the corner—manufacturers have good reason to be concerned. 

The more than 100 percent wage increase over the last year, and growing input costs pose a threat to the manufacturing sector as well, with many factory owners saying they’re running their factories at low capacity, to preserve jobs and prevent a total shutdown.