Bangladesh’s RMG sector has achieved a great deal over the last decade. We are now home to some of the world’s most environmentally friendly and energy-efficient factories. Compliance and safety have improved significantly. And ESG—once a foreign term—is now part of the conversation across boardrooms. But despite these advancements, many of the systemic issues holding us back remain unresolved.
As someone deeply involved in supporting both local manufacturers and global buyers—from my work with The Woolmark Company to strategic advisory through A&A Global Consultants—I’ve seen the gaps up close.
One of the most pressing challenges lies in the cost dynamics of sustainable production. Most environmentally conscious practices—be it the use of alternative materials, process improvements or enhanced traceability— come at a premium. Yet buyers continue to expect competitive pricing. At Thianis Apparels Ltd., we’ve consistently advocated for more sustainable materials like recycled polyester and pure wool over conventional synthetics. While these materials bring clear environmental benefits, the commercial response is often tepid once cost is discussed. Recycled polyester, for example, still commands a premium due to supply limitations and processing expenses. The same applies to wool, which we’ve recommended as a substitute for polyester-based blends. Buyers admire the sustainability narrative, but hesitate to translate that into a higher product value.
This tension between ambition and investment is echoed in the regulatory space. ESG policy frameworks in Bangladesh remain fragmented and inconsistent. There is no centralised national or industry-level roadmap that holistically integrates environmental, social and governance pillars. In the absence of this, factories are often left to interpret expectations independently, leading to overlapping compliance efforts. Manufacturers routinely pursue multiple certifications—LEED, RSC, Higg Index, GOTS, ISO 14001, Sedex, BSCI, WRAP—not necessarily because of internal conviction, but to meet disparate brand expectations. The result is rising compliance costs, duplicated audits and strategic confusion.
Visibility is another blind spot. Most environmental impact and labour issues occur beyond Tier-1 suppliers—within subcontractors, dyeing houses and spinning mills. Yet most traceability efforts stop at the garment level. Without greater transparency across the full supply chain, ESG claims remain incomplete. While traceability beyond Tier-1 remains a challenge, it’s one that can be addressed through intentional supply chain mapping and data collection. Simultaneously, factories should also explore operational tools that reduce waste and improve efficiency at the production floor level. One such example is Shapeshifter—a marker-making and cut plan automation system we’ve implemented with select partners. By optimising marker efficiency, it helps to reduce fabric waste and ultimately lowers both cost and environmental footprint. Technology has a critical role to play in extending transparency deeper into the supply chain. One emerging solution is Digital Product Passport (DPP), which records detailed product lifecycle information—such as material origin, production processes and sustainability credentials—using secure, blockchain-backed platforms. At Thianis, we implemented a DPP for a specialised order delivered to Telenor in Norway, using a blockchain system developed by UNISOT. While this experience demonstrated the viability of such technologies, mainstream adoption remains limited. Most buyers still do not commercially reward DPPs, and outside of a few niche cases, they are not yet a standard requirement.
Another effective approach to enhancing transparency is real-time production tracking. Companies like Solvei8 enable digital traceability and operational visibility on the production floor, allowing manufacturers to monitor movement, performance and delays across units. This not only improves transparency but also enables faster decision-making and troubleshooting, ultimately driving greater efficiency. However, for these digital solutions to scale, brands must be willing to support onboarding and system integration costs. Until smaller mills and subcontractors perceive transparency tools as commercially beneficial, widespread adoption will continue to lag.
| At Thianis Apparels Ltd., we’ve consistently advocated for more sustainable materials like recycled polyester and pure wool over conventional synthetics. While these materials bring clear environmental benefits, the commercial response is often tepid once cost is discussed. |
At the material level, infrastructure deficits compound the problem. Bangladesh is yet to build sufficient local capacity for spinning, dyeing or finishing sustainable fibres—especially wool. This results in dependency on imports, driving up lead times and production costs. Through my work with The Woolmark Company, I’ve seen several manufacturers show genuine interest in wool-based innovations. But interest alone isn’t enough without the enabling ecosystem—machinery, know-how and commercial scale. Financing is another bottleneck. Sustainability requires upfront capital, whether it’s for green buildings, wastewater treatment or product innovation. Unfortunately, traditional banking models in Bangladesh still don’t fully reward ESG investment. Interest rates are high, loan tenures are short and ESG-linked lending is in its early stages. That said, some institutions are beginning to step up. Mutual Trust Bank (MTB), Eastern Bank Limited (EBL), United Commercial Bank (UCB), BRAC Bank and IDLC Finance have introduced dedicated green financing programmes—many supported by Bangladesh Bank’s refinance schemes. These initiatives include funding for energy-efficient equipment, solar rooftops, water treatment facilities and low-impact construction. Still, uptake remains relatively limited. Local financial institutions need to expand ESG-specific credit lines and evolve lending criteria to recognise long-term sustainability gains over short-term returns. Public-private partnerships could also be a game changer—particularly if multilateral agencies can collaborate with banks and regulators to de-risk investment in sustainable manufacturing.
Social sustainability, meanwhile, is both a strength and a stress point. The industry is labour- intensive by nature, making execution complex. However, most factories—ours included—are actively trying to uphold social standards. Many participate in audits and certifications under SMETA, BSCI or WRAP. These aren’t token gestures; they reflect real effort and commitment. But the burden of implementation lies entirely on the manufacturer, while buyers continue to negotiate aggressively on price. There has to be more equitable risk-sharing. Buyers must be willing to reflect social compliance costs in their pricing decisions, rather than passing the full pressure down the chain. This brings us to the imbalance in supplier-buyer power dynamics. Brands continue to hold the negotiating power, while suppliers—especially those in price-sensitive categories like basic knitwear—are forced to absorb rising ESG costs to stay competitive. Can manufacturers push back? Not easily and certainly not individually. But collective action, through associations or industry platforms, could give suppliers the leverage to demand fairer terms. Transparent costing models, voluntary price adjustment frameworks based on ESG spend or buyer commitment to longer-term contracts could help level the playing field. We’re far from that reality, but the conversation needs to start.
A significant reason ESG remains slow to scale is the lack of leadership prioritisation. In many companies, ESG is viewed as a side task— delegated, underfunded or siloed. But transformation requires leadership attention. When decision-makers take ownership, change happens. Fakir Fashions, Urmi Group and Ananta Group are examples where ESG is embedded into business strategy. They aren’t perfect, but they are setting benchmarks.
Externally, the stakes are rising. With regulations like the EU’s Corporate Sustainability Due Diligence Directive (CSDDD), ESG compliance is no longer optional. Brands will be held accountable for their sourcing practices. This raises both a threat and an opportunity: manufacturers who align early will have an edge. Factories that are audit-ready, backed by verified data and able to demonstrate supply chain due diligence, will become preferred partners.
Azeezur Rahman Khan is the Country Development Representative for The Woolmark Company in Bangladesh and General Manager of Thianis Apparels Ltd. He also leads A&A Global Consultants, which helps global tech companies, brands and suppliers navigate the RMG landscape in Bangladesh through market intelligence, ESG strategy and business development support.
