Bangladesh’s Ready-Made Garments (RMG) industry remains the backbone of its industrial growth in the coming decades. This paper sought to examine its environmental compliance landscape in terms of the incentives and barriers RMG entrepreneurs face. The paper in particular looked at the high achievers in greening, which includes some of the factories who have the most eco-friendly RMG factories, as certified by the US Green Building Council (USGBC); and some of the factories that partnered with the International Finance Corporation’s Partnership for Cleaner Textiles (PACT) project, which is the world’s largest initiative for resource efficient apparel manufacturing (Daily Star 2017 a). This approach was taken to demonstrate three things: is cost recovery possible in the medium to long term for investments that go beyond mandatory government and basic buyer requirements; what kind of barriers did the high achievers face and what lessons are there for other RMG companies who may benefit from greening; and what kind of policy and institutional changes are needed to spread greening from the high achievers to the rest of the industry. The key points of the paper are given below.
Cost recovery calculations for the Leadership in Energy and Environmental Design (LEED) green factories broadly align with the market studies conducted in the USA. While some LEED points are more cost intensive than others (please see section 4.6 for details), cost recovery in the medium to long term is achievable. The main challenge for LEED certification remains strategic planning from the initial construction design phase, and metering/monitoring after certification. Cost recovery for the PACT partner factories is well documented as yielding financial returns in the form of reduced water, electricity and chemical use. The main internal and external challenges and enablers that these high achieving companies face are detailed in the table below. A key finding from the interviews is that the top-performers in the RMG sector are professionally managed corporate organisations, and ‘greening’ is a sensible investment that keeps them ahead in their business and enhances public perception regarding themselves.