Bangladesh’s garment and textile industry faces potential impact from the European Commission’s proposed Corporate Sustainability Due Diligence Directive (CSDDD), currently under discussion. The directive aims to establish a legislative framework requiring companies, regardless of EU-based or not, to demonstrate efforts in environmental protection and human rights. Bangladesh, a significant exporter to the EU, is concerned about the potential challenges for its factories to comply with the strict regulations outlined in the directive.
The directive encompasses due diligence across operations, subsidiaries, and entities in value chains, posing challenges for Bangladeshi factories. The EU, accounting for over 50% of Bangladesh’s garment exports, may see a shift in sourcing practices, with major buyers like H&M reducing factories due to sustainability goals. The directive is still in the legislative process, with the European Parliament’s vote expected later in 2023, and enforcement unlikely before 2025.
The German Supply Chain Due Diligence Act, effective from January 2023, sets a precedent with obligations on risk management, preventive measures, and mandatory complaint procedures for companies sourcing garments globally.
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