Although Bangladesh is the global leader in terms of green garment factories, international retailers and brands do not want to pay any premium or extra cost to purchase products manufactured in these units.
Following the collapse of the Rana Plaza building in April 2013, international communities raised their concerns over the garment sector’s compliance with global standards.
As a result, local apparel producers took the extra ordinary initiative to construct green factories, improve workplace safety and protect the environment from industrial pollution.
Entrepreneurs have to spend 30 per cent more for constructing green factories than the conventional ones.
However, buyers do not pay any extra cost for products from the green factories even though the certified units save just 40 per cent on energy and water owing to a more efficient design than traditional units.
The country’s apparel manufacturers and exporters have also spent nearly $3 billion to improve the fire, structural and electrical safety at their factories as recommended by Accord and Alliance, two defunct international garment factory inspection agencies.
However, the prices for garment items remain low, or in some cases even dipped, according to some recent studies.
Bangladesh’s garment sector currently has about 34 platinum rated Leadership in Energy and Environmental Design (LEED) green garment factories, certified by the US Green Building Council (USGBC), according to the Bangladesh Garment Manufacturers and Exporters Association (BGMEA).
This is the highest number of platinum rated LEED garment factories in the world.
Besides, nine of the top 10 green garment factories in the world are from Bangladesh. Some 27 green manufacturing units jointly hold various positions in the top 10 green factories worldwide.
Bangladeshi factories are tied for all positions other than the top spot, according to Mohiuddin Rubel, member of the advisory board to the chief executive officer (CEO) of the USGBC.
Among all USGBC certified LEED garment factories, some 79 are gold standard, 10 are rated silver and two are just certified, said Rubel, who is also a BGMEA director.
More than 500 local garment factories are in the process of obtaining LEED certification from the USGBC, he added.
“They (the buyers) don’t pay a single cent extra for green factory products,” said KM Rezaul Hasanat, chairman and CEO of Viyellatex Group.
The leading garment exporter operates two state-of-the-art green garment factories in Gazipur.
Bangladesh does not have carbon emissions.
“So, the buyers should focus on improving the overall environment as Bangladeshi manufacturers pollute very, very less,” he added.
Fazlul Hoque, managing director of the Narayanganj-based Plummy Fashions, another green garment factory, also said that buyers are not mentally prepared to pay premium prices to suppliers of green garments.
“The buyers do not pay even a single penny extra for our green initiative. Sometimes we have to negotiate with them for premium prices but not as a green garment factory.”
“It is ironic that we do not get premium prices from our buyers despite making our factory buildings environmental compliant with global standards,” Hoque added.
However, there are some benefits to being a green factory. For instance, international buyers feel more confident about working with green units and so, there is a continuous flow of work orders.
About 99.9 per cent of all buyers do not pay a premium or extra price for products made by green producers, said BGMEA President Rubana Huq.
It is not required by the buyer to ensure compliance but it is a step towards sustainability for the factory.
However, there is no mechanism in purchasing that require buyers to pay premiums for a company’s sustainability practices, Huq told The Daily Star via WhatsApp.
She also said since most corporate entities pledge to maintain compliance with various global platforms, such as the Water Stewardship Council, Environmental Stewardship Council and Race to Zero, the industry needs to have some mechanism in the purchasing system that provides incentives for factories that go beyond mere compliance.
This will ultimately help the brand achieve its strategic sustainability goals as well.
A green factory needs 20-30 per cent more capital expenditure than conventional factories but that is for the long-term, Huq added.
Most green garment factory owners that spoke with The Daily Star in this regard echoed the same, stating that international buyers are not ready to pay extra prices for green initiatives.
There is a sharp disconnect between sustainability and business as far as purchasing practices are concerned, said USGBC’s Rubel.
“So, if we can make a purchasing system that allows brands to provide premium prices for products made in green factories, that will enhance the number and business that engage in green activities,” he added.