Legal frameworks now require detailed sustainability reporting, with evidence and data becoming key. The growing global shift from voluntary to mandatory ESG regulations has reshaped how companies approach sustainability. However in Bangladesh which has around 100 top RMG exporters and over 225 green LEED-certified factories, only a handful like DBL Group, Urmi Group, Posh Garments, Pacific Jeans, Cute Dress Industry, Team Group and Shin Shin Group, have published comprehensive annual sustainability reports.
Sustainability reports help organisations share how they handle environmental risks, opportunities and practices. These reports give important information to investors, regulators, partners, employees and customers so that they can make better decisions.
A survey of 1,400 companies—100 from each of the six biggest economies in the world, as identified by the International Federation of Accountants—found that almost all companies (98 per cent) share some information about their efforts in sustainability.
Sustainability reporting is different from financial accounting because it’s not clear, consistent or easy to compare. There are over 600 different rules and guidelines for sustainability reporting worldwide which make it complicated and time-consuming. Most companies follow the rules set by their local government if they exist. If not, they choose which standards to follow and how to share their sustainability progress. Some of the top sustainability reporting standards include European Sustainability Reporting Standards (ESRS), International Sustainability Standards Board (IFRS), Climate Disclosure Standards Board (CDP), Global Reporting Initiative (GRI), The Sustainability Accounting Standards Board (SASB), International Sustainability Standards Board (ISSB), B Corporation and United Nations Global Compact. Many companies are choosing to work with the Science Based Targets initiative (SBTi), a corporate climate action organisation that develops standards, tools and guidance which allow companies to set greenhouse gas (GHG) emissions reductions targets in line with what’s needed to limit global warming and reach net-zero emissions by 2050.
Information Disclosed in Sustainability Reports
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Source: pwc
Sustainability reporting not only builds trust, strengthens global partnerships but also showcases the industry’s commitment to ethical and responsible practices. It serves as both a roadmap for continuous improvement and a tool to communicate progress, challenges and aspirations. Besides, it enables boosting transparency and stakeholder trust; enhancing market competitiveness and branding; identifying inefficiencies; supporting cost reduction; strengthening stakeholder engagement; and earning global certifications and recognition. Exporters can also use these reports to manage resources like energy, water, chemicals and waste more effectively. “What motivated us most was to promote our company internationally by aligning with global SDGs, enhancing transparency and reputation by highlighting environmental stewardship and positioning Posh Garments as an industry leader,” said Wasim Zakariah, Director, Posh Garments, , which earned US $ 12.69 million in 2023 and produces 250,000 pieces annually.
He added, “If more companies publish their sustainability reports, it will increase global trust and buyer confidence, promote sector-wide efficiency, position the sector as ethical and sustainable, attract high value markets and improve reputation.”
Urmi Group too, with revenue of around US $ 224 million, also uses sustainability reporting to strengthen its relationships with key buyers like PUMA, M&S, Decathlon, Auchan, GU, Rip Curl and Kathmandu. With a dedicated reporting team and robust systems in place, the group is preparing to publish its fourth GRI-based sustainability report soon.
“Sustainability reporting is not just a benchmark—it is a catalyst for innovation, collaboration and progress. With strong leadership and the tireless efforts of the Corporate Sustainability team, we are proud to champion this cause,” stated ABM Faqrul Alam, Group Sustainability Lead, Urmi Group.
Sustainable reporting also helps save cost. A McKinsey & Company study shows that combining cost-saving measures with cutting emissions can reduce emissions by up to 40 per cent and improve financial performance by 15 per cent.
Hurdles to Sustainability Reporting
Experts say the first step in starting a sustainability report is the pre-assessment stage, which involves a broad review of the company’s current reporting status and how it aligns with upcoming requirements. This helps outline the path for future reporting. Next, an impact and readiness assessment should be conducted to gain deeper insights into the company’s reporting performance. Finally, a comprehensive readiness plan should be developed, incorporating the company’s assessments and goals. However, there are multiple hurdles that companies encounter. For instance, limited resources; complexity of reporting standards; lack of tangible motivation; the need for complete involvement of top level management; data collection and analysis; data sharing in public domain; and too much focus on price-driven markets. Another issue is that, for example, mid-sized garment companies may opt for water recycling initiatives but they find the GRI framework intimidating due to its detailed metrics and indicators. Without proper training, these companies often hesitate to start. They also lack the budget to hire sustainability experts or invest in reporting tools and there is also fear of being transparent as they have apprehensions regarding buyer scrutiny if they disclose areas for improvement such as high energy consumption or waste management gaps.
| Challenges in Sustainability Reporting
People Lack of buy-in on the importance of sustainability data reporting Lack of clarity on roles and responsibilities Insufficient ownership and accountability at the business unit level Inconsistent data entry by different data owners Process Absence of Standard Operating Procedures (SOPs) for data collection Lack of clear communication regarding timelines and expectations Supporting evidence often unavailable because it is not typically compiled Data is only compiled annually, often lacking periodic audits and reviews Discovery of errors from previous years after reporting Technology Data are not readily available to be examined Manual spreadsheets are prone to human errors Absence of a centralised ‘source of truth’ for ESG data |
Source: pwc
Therefore, Wasim opined that to encourage companies for sustainability reporting, associations like BGMEA or the government or buyers can offer incentives, training and financial support. He suggested that buyers can support the RMG companies by providing long-term contracts, higher order volumes, training or resources to help them create standards-compliant reports.
There are organisations like ‘The Sustainability Nexus Ltd.’, offering technical support to companies aiming to have their own sustainability reports.
Another big deterrent is cost. As per Faisal Samad, MD of Savartex Group (a vertically integrated manufacturer) and Former Senior Vice President and Board Member of BGMEA, “To bring up more such reports, the companies have to be financially sustainable as along with serving the planet and people, profit is equally important. To nudge the industry in the right direction, buyers should prioritise RMG suppliers who are into regular sustainability reporting.”
Regarding the cost involved in preparing sustainability reports, this depends on various factors including the scale of the company’s sustainability initiatives, in-house dedicated team, services of expert consultants, training of the team for specific tasks and man hours. Data collection and management, analysis are the steps that involve greater costs apart from report designing and taking the help of third-party services. As per experts, even if most of the work for reporting is done in-house, then also the cost for sustainability reporting would be around US $ 17,000. Since gathering information from different levels, teams and people is not easy, investment in technology is a must to make this process simpler. “For a sustainability report, data management is critical. We are a comparatively big organisation with 13 units. It is complex to accumulate all the data in a formatted shape as some units have their own data tracking and management system. We are in the process of collecting all the data aligning with GRI requirements and it may take one year. After that, we will be able to work on a well-documented sustainability report,” informed a sustainability manager of a top group on the condition of anonymity.
Sridhar Rajagopal, Chief Mentor, Redefine Management Services, an international, multidimensional project management firm, specialising in providing advisory services to businesses, believes that in coming years, most of the Bangladeshi companies will have their own sustainability reports. “Top management has to integrate sustainability reporting with their vision and mission, rather than developing it because their competitors are also doing or using it as a mere marketing tool,” he stated.
Urmi Group recently partnered with Redefine Technologies and Diverzent to promote and implement SATTVA Safe and Sustainable™, an ESG management software designed to enhance sustainability and compliance within Urmi Group’s operations.
Top leadership’s thrust and involvement is another critical aspect for building a sustainability report. “Our leadership has allowed us to adopt global best practices and utilise advanced reporting portals such as HIGG FEM, CleanChain, BEPI, RBH, Reverse Resource and SATTVA,” averred ABM Faqrul Alam.
He also believes that as more companies formalise their efforts, the sector will benefit from shared knowledge, enhanced global reputation and the ability to drive transformative change.
