Bangladesh’s ready-made garment (RMG) industry stands at a critical juncture. The sector generates over 80% of the country’s export earnings while supporting millions of livelihoods. However, global competitiveness now extends beyond cost, quality, and delivery to include sustainability, transparency, responsible business practices, and credible environmental, social, and governance (ESG) performance.
The key question is whether Bangladesh can move beyond a compliance-driven mindset and leverage sustainability practices and reporting as strategic tools to strengthen its position in the global apparel market.
The RMG sector transformed significantly after the 2013 Rana Plaza tragedy, which exposed critical weaknesses in workplace safety, labour compliance, and factory governance. In response, the industry adopted widespread reforms supported by global initiatives, regulatory authorities, and international buyers.
These reforms led to significant improvements in workplace safety, structural integrity, labour standards, and environmental management. Bangladesh now hosts the world’s largest number of LEED-certified green garment factories. Many manufacturers have also adopted energy-efficient technologies, wastewater treatment, water recycling, and renewable energy systems, demonstrating the sector’s growing commitment to sustainable manufacturing.
Despite these achievements, Bangladesh operates in an increasingly competitive global apparel market. Increasing competition from Vietnam, India, and Turkey highlights the need to strengthen competitiveness beyond low-cost production. Future success will depend on sustainability performance, innovation, supply-chain transparency, and resilience rather than price alone.
Global sustainability transformation requires organizations to integrate sustainability practices with credible sustainability reporting through a structured five-step roadmap. The process begins with assessment and governance, where organizations identify material ESG risks using double materiality and align priorities with the UN SDGs.
Next, sustainability is embedded into operations through carbon measurement, Scope 3 emissions management, renewable energy, circular production, labour rights, and supply chain traceability.
These practices respond to evolving global regulations. The roadmap then focuses on performance monitoring using measurable ESG indicators and science-based climate targets (SBTi). Finally, organizations disclose sustainability performance through frameworks such as GRI and SASB supported by external assurance.
Together, sustainability practices and reporting enhance accountability, market access, investor confidence, and the long-term competitiveness of Bangladesh’s RMG sector.
Over the past two decades, sustainability has become a core requirement in global apparel supply chains. International brands increasingly require compliance with standards on labour rights, occupational safety, environmental management, and responsible sourcing.
Frameworks such as GRI, the Higg Index, and ZDHC have accelerated the adoption of cleaner technologies, wastewater treatment, resource-efficient production, and stronger monitoring systems across factories. Industry leaders increasingly recognize that long-term competitiveness depends not only on compliance but also on embedding sustainability into core business strategy.
A key pillar of this transformation is sustainability reporting. Leading Bangladeshi manufacturers have begun publishing sustainability and ESG reports using internationally recognized frameworks. These early adopters reflect growing alignment with global expectations and increasing institutional maturity across the sector.
Sustainability reporting strengthens buyer confidence, improves operational efficiency, supports access to green finance, and enhances risk management. It also enables manufacturers to benchmark performance and identify opportunities for continuous improvement.
However, progress remains uneven across the industry. While large exporters are increasingly adopting structured reporting, many small and medium-sized enterprises (SMEs) still lack the technical expertise, financial resources, and data management systems needed for comprehensive reporting.
As a result, they continue to rely on fragmented disclosures driven by buyer audits, certifications, and compliance requirements.
This gap reduces transparency, limits comparability, and raises concerns about data reliability across the value chain.
Although sustainability reporting is not yet mandatory for all manufacturers, it is expected to become a formal requirement by 2027 as global regulatory frameworks evolve.
Bridging this gap will require coordinated efforts to strengthen technical capacity, improve digital infrastructure, and expand access to affordable green finance.
Key challenges
Despite significant progress, several structural challenges continue to limit the full sustainability transformation of Bangladesh’s RMG industry.
One major challenge is the sector’s continued reliance on fossil-fuel-based energy systems, which restricts large-scale emissions reduction. Although some factories have adopted renewable energy solutions, the national energy structure remains carbon intensive.
Access to green finance is another key constraint, especially for SMEs investing in cleaner technologies, wastewater treatment, and digital reporting systems. High initial costs often delay sustainability investments despite their long-term benefits.
Environmental management practices also vary across the sector. While leading factories use advanced wastewater treatment and chemical management systems, many production clusters still face challenges in textile waste management and circular economy adoption.
Labour-related challenges also remain, including wages, worker representation, skills development, and human rights due diligence. Manufacturers must also navigate complex buyer requirements, certification schemes, and regulatory frameworks, which can increase audit fatigue and compliance costs.
To remain globally competitive, Bangladesh’s RMG sector must move beyond compliance-driven sustainability and establish sustainability as a core business strategy.
This requires stronger governance, improved reporting systems, and integration of ESG priorities into corporate decision-making, risk management, and investment planning.
Wider adoption of global reporting frameworks, independent assurance mechanisms, and digital traceability solutions will be essential to improve transparency, credibility, and data quality across the value chain.
At the same time, an inclusive sustainability transition will require targeted support for SMEs through technical assistance, capacity building, and access to affordable green finance.
Collaboration among manufacturers, global brands, policy-makers, financial institutions, development partners, and academic institutions will be critical to overcome barriers and accelerate industry-wide transformation.
Bangladesh’s RMG industry has demonstrated its ability to adapt by improving workplace safety, strengthening compliance systems, and advancing sustainable factory practices.
However, the next stage of competitiveness will depend on transforming sustainability from a set of operational initiatives into a measurable and strategic advantage.
As global apparel sourcing increasingly prioritizes carbon performance, resource efficiency, transparency, human rights, and accountability, cost competitiveness alone will no longer be sufficient.
The central challenge now for Bangladesh is to institutionalize credible sustainability reporting and ensure that responsible practices are embedded throughout the industry.
By doing so, Bangladesh can strengthen buyer confidence, secure long-term market access, and maintain its position as a global apparel leader.
Mohammad Rabiul Kabir is an associate professor at Stamford University, Bangladesh, and a sustainability and ESG professional.
