The future of Bangladesh’s export-oriented readymade garment (RMG) industry will be heavily reliant on Environmental, social, and governance (ESG) compliance.
According to the media reports, the European Commission adopted a proposal for a Directive on corporate sustainability due diligence in February 2022 as part of the Green Deal and ‘Fit for 55’ package by incorporating ESG issues.
The directive aims to promote human rights and environmental protection, ensure a level playing field for EU businesses and eliminate uneven regulatory supply chains’ due diligence enacted by EU member countries.
The directive requires EU companies to evaluate their actual and potential impacts on human rights and the environment throughout their operations.
Moreover, it also requires taking steps to prevent, mitigate and remedy any identified human rights and environmental harms on their supply chain.
Germany and France have already enacted similar supply chain regulations which will be effective from January 2023 in Germany while France already enacted it in 2017.
Meanwhile, in partnership with the Ethical Trading Initiative (ETI), Marks and Spencer has already announced that it will be making a “responsible exit” from sourcing in Myanmar following concerns over human rights violations.
There may also be some similar risks for Bangladesh’s apparel although apparel exporters said that there is no risk of hurting RMG to EU so far, as the situation is yet to deteriorate to such a level.
Speaking to the media, Shahidullah Azim, vice president of the Bangladesh Garment Manufacturers and Exporters Association (BGMEA) the situation is yet to be created for stopping apparel sourcing from Bangladesh.
But the EU has placed 17 observations including human rights, democracy, and workplace safety to provide duty-free facilities in the post-LDC era.
The requirements are also globally acknowledged and they must follow these, he added.