A PATHWAY TO

MANAGE PRIVATE
SECTOR IMPACT
on Bangladesh National Priority Indicators (NPIs)
& Sustainable Development Goals (SDGs)

47
Factories
Contributed

A Bangladesh Garment and Manufacturers & Exporters Association (BGMEA)

experience

With sponsorship from SIDA, technically

supported by UNDP and GRI & using the
GRI Standards. The factories were
supported on sustainability reporting by
SR Asia Bangladesh
 TABLE OF CONTENTS

FOREWORD 2
EXECUTIVE SUMMARY 6
ABOUT THE COLLABORATORS 9
BACKGROUND 10
APPROACH 12
KEY FINDINGS 14
THE IMPACT OF COVID-19 ON RMG SECTOR 27
KEY CHALLENGES 28
IMPACT OPPORTUNITIES FOR FURTHER IMPROVEMENT 29
ANNEXURE 30
REPORT METHODOLOGICAL FRAMEWORK 30
CONTRIBUTING FACTORIES 32

01
FOREWORD

I would like to take the opportunity to congratulate the Bangladesh

Garment Manufacturers and Exporters Association (BGMEA) on
successfully completing the voluntary self-reporting of its 47
member factories. This is the first of its kind from the private sector in
Bangladesh on the occasion of the centenary birth anniversary of
Father of Nation Bangabandhu Sheikh Mujibur Rahman. We hope
and believe that this very initiative of BGMEA will encourage other
private sectors to come forward and report their social, economic,
and environmental impacts.
Under the visionary and prudent leadership of Hon’ble Prime
Minister Sheikh Hasina, the Government is committed to upholding
Bangladesh’s well-tracked progress towards SDGs attainment within
the stipulated time, despite the challenges posed by COVID-19. We
have taken several effective steps to accomplish the aspiration of
“Leaving No One Behind”, which is also reflected in the currently
published 8th Five Year Plan of Bangladesh. The “SDG Tracker”
introduced by the Government of Bangladesh with the collaboration
of relevant partners not only facilitates the monitoring of SDG results
but also helps to identify the priority areas. However, there is no room
to be complacent about the achievement yet. We have to play our
roles collectively for keeping the progress uninterrupted. With a view
to doing so, following the ‘Whole of the Society Approach”, the
Government has always encouraged constructive Public-Private
partnerships and promise to continue the effort in the upcoming
days as well.
There is no denying the fact that, for attaining SDGs by 2030, the role
of the private sector is very crucial. Only the Inclusive participation of
the Government, Private sectors, and civil society will ensure the
timely implementation of SDGs.
I would like to acknowledge UNDP, and GRI, for their support to our
very important industrial sector.
I wish everyone greetings of Mujib Year.

Zuena Aziz
Principal Coordinator, Sustainable Development Goals (SDG)
Affairs
Prime Minister's Office

02
 FOREWORD

RMG industry has substantially contributed a lot to the

socioeconomic development of Bangladesh especially in terms of its
alignment with SDGs. But very often the impact is not measured.
Therefore, BGMEA took an initiative to opt for voluntary self-
reporting of its member factories.
Through the robust partnership with UNDP and GRI, we have been
able to develop our very first edition of SDGs report, which not only
confines within the highlights of RMG’s performance against SDGs
and NPIs, but also creates a clear reflection of the actions taken to
combat the COVID-19 issues. With support from SR Asia, 47 factories
have been brought under the umbrella of SDGs self-reporting.
The report is a step forward in our continuous endeavor in making
the Government of Bangladesh’s 2030 SDGs a reality. We hope that
the report acts as an inspiration for the other RMG factories as well as
other industries, and helps in bringing them forward to measure their
contribution to SDGs achievements.
We congratulate the 47 factories on their contribution to
Bangladesh’s SDGs achievement and hope it will inspire many more
to contribute meaningfully to transcend our triumphant march
towards a more climate resilient, non-impoverished, women
empowered, inclusive and equitable society leaving no one behind.

Dr. Rubana Huq

President
BGMEA

03
FOREWORD

Financing is at the heart of the tasks towards achieving the Sustainable Development Goals
(SDGs). Programming for SDG implementation remains incomplete without discussing the
means for resourcing them or understanding the nature and level of impacts that different
contributions can or do make.
In Bangladesh the SDG Financing Strategy targets 42% of resources to come from the private
sector while the 8th Five Year Plan estimates that 75% of the actual means for SDG
achievement would involve private businesses. If both these expectations have to be
meaningfully realized it is imperative that private sector impacts on SDGs be carefully and
systematically assessed.
Measurement of private sector impact on sustainability is not only a priority for
Governments and international development partners, such as the United Nations, but
increasingly across the globe sustainability investors are also expressing interest to have
assessments undertaken. This is not only because sustainability is closely linked to risk
mitigation, but also because a better understanding of impacts can potentially lead to new,
innovative and resilient business opportunities. As a result, SDG financing is growing
exponentially. Between 2014 and 2016, global sustainable investment increased by 25%
(from US$18.28 T to US$22.89 T). Similarly, between 2013 to 2017, Green Bond issuance
increased 14-fold (from US$11 B to US$155 B).
Although the Covid-19 outbreak was initially expected to reverse this trend, in reality despite
the financial crisis that the pandemic generated, sustainability investors remained engaged.
COVID 19 induced economic losses due to supply chain disruptions, contraction of demand
and shrinking financial flows, have only helped to reinforce the need for more investments
in sustainability planning and resilience building.
In Bangladesh, the Readymade Garments sector not only contributes to economic
development, but also to SDG achievement: it provides employment; supports healthcare of
the workforce; invests in up-skilling the workforce; adopts resource recycling; increasingly
uses renewable energy, and so on. While some individual factories produce sustainability
reports, the appreciation of the magnitude of the impacts has so far remained outside of
systematic studies and reporting making it difficult to understand industry trends and align
private sector efforts to government goals. This voluntary survey undertaken jointly by the
BGMEA, GRI and UNDP therefore represents a critical step forward. We are very optimistic
that disseminating the findings together with a public acknowledgment under the
leadership of the Principal SDG Coordinator will inspire more factories and more industries
to come forward and join the initiative.

Sudipto Mukerjee
Resident Representative
UNDP Bangladesh

04
 FOREWORD

The Sustainable Development Goals (SDGs) represent a common language and a global
framework for all actors in society to contribute to. The role of the private sector has never
been more important, having shifted to solely making profit to engaging with
communities, governments and other stakeholders to strengthen and accelerate
sustainable development.
Over the last few years, businesses large and small have made significant progress in both
adopting sustainability strategies and embracing sustainability reporting by measuring
and communicating their economic, environmental and social impacts. However, aligning
the data and information produced with the SDGs remains a challenge that can
undermine the overall evaluation and understanding of the private sector’s contribution
to sustainable development. With thousands of reporters in more than 100 countries,
many companies are choosing the world’s most widely used standards for sustainability
reporting – the GRI Standards - to report on their sustainability impacts and practices.
The collaboration between GRI South Asia, the United Nations Development Programme
(UNDP) and the Bangladesh Garment Manufacturers and Exports Association (BGMEA)
explores in great detail the impact of the readymade garments (RMG) sector on the
National Priority Indicators (NPIs), established by the Government of Bangladesh, and the
SDGs which comes from businesses’ sustainability reporting. This report aims to consider
the overall impact and contribution of the RMG sector to the NPIs and SDGs, which can be
considered by Government of Bangladesh, without imposing any burden, but facilitating
the collection of SDGs related business data, already disclosed by companies, through
sustainability reporting according to the GRI Standards. Recognizing the value of
corporate social responsibility and sustainability reporting, today more than ever, the
governments need to encourage companies to disclose sustainability data, as called for in
SDG target 12.6, use this information to assess the business contribution and impact on
the SDGs - only then will it be reflected and included in the measurement systems, leading
to a more complete picture of the reality of implementation at both national and global
levels.
All things considered, the transformation of an organization towards a more sustainable
future depends greatly on its ability to monitor, measure, evaluate, and disclose its
impacts, and then make strategic choices for improvement based on learnings and results
of the information disclosed. Trustworthy and transparent disclosures can lead to a culture
of accountability in the corporate boardroom, and their power cannot be ignored; rather,
it needs to be strengthened.

Dr. Aditi Haldar

Director
GRI South Asia

05
EXECUTIVE SUMMARY

The Sustainable Development Goals,

Bangladesh and the readymade garments (RMG) industry

The 17 Sustainable Development Goals (SDGs) present an

unprecedented opportunity to bring countries and citizens together to
transform the world and improve the lives of people everywhere. Yet one
cannot speak about the SDGs without mentioning SDG financing: with
trillions of dollars in resources, the private sector has a major role to play
in achieving SDGs and the 2030 Agenda. Business entities are expected to
For the past three decades,
exercise sustainable business practice. The more business grows, the Bangladesh has been the second
higher the demand for sustainability. Nevertheless, companies have largest exporter of RMG
products in the world, exporting
changed their business objectives from solely making profit to a shared
value approach by engaging with communities, governments and other
stakeholders to foster sustainable development. One of the key actors in to over 132 countries. Exports
private sector in Bangladesh is the readymade garments (RMG) industry.
For the past three decades, Bangladesh has been the second largest
were estimated to double from
exporter of RMG products in the world, exporting to over 132 countries. 2010 to 2015 and nearly triple
Exports were estimated to double from 2010 to 2015 and nearly triple by by 2022. For the very first time
in the financial year 2018-2019,
2022. For the very first time in the financial year 2018-2019, total RMG
exports in the country have crossed the 34.13 USD Billion mark – that is a
11.49% increase1. total RMG exports in the country
The RMG industry in Bangladesh is now facing the fundamental have crossed the 34.13 USD
challenge of adopting sustainable business practices amid the COVID-19
pandemic, which is having a far-reaching effect on businesses in almost
Billion mark – that is a 11.49%
every part of the world. Globally, demand for apparel is shrinking and increase.
99% of apparel factories have to reduce their operational capacity2.

About the data collection

Through relevant business disclosures, the Bangladesh Garment Manufacturers and Exporters
Association (BGMEA), with technical support from the United Nations Development
Programme (UNDP) in Bangladesh and Global Reporting Initiative (GRI), have come together to
lay out and outline the impact of the RMG sector on Bangladesh National Priority Indicators
(NPIs) and SDGs. As such, instead of only measuring the financial performance of their business,
the 47 factories involved in this report took business decisions based on their impact on the
environment and people, among other sustainability priorities. The approach aimed at aligning
business-relevant sustainability data with NPIs and SDGs. In other words, the existing business
reporting standards, indicators and indexes are translated in the language of NPIs and SDGs.
Considering the mainstream adoption of GRI standards across businesses worldwide3 , the
adoption of HIGG Index by most RMG buyers, and the role and expertise of UNDP when it comes
to SDGs, inclusive business4 and impact measurement, this report used relevant sustainability
business indicators and translated them in the language of NPIs and SDGs. As a result, the
published report allows the RMG sector in Bangladesh to measure and communicate its
contribution to NPIs and SDGs to relevant stakeholders. This report illustrates the actions RMG
businesses took to make progress towards the SDG targets, the challenges the sector is still
facing, and what it would take to overcome said challenges and make a bigger impact on NPIs
and SDGs.

06
 The initial questionnaire included 12 SDGs [SDG 1-7, 8-9, 12-14] based on their potential
relevance for the RMG sector’s direct or indirect economic, social, environmental impact as well
as governance (ESG) issues. Based on the practical experience of 47 factories engaged in this
report, it became clear that factories do mostly perform on nine SDGs [SDG 1,3,4,6,7,8,9,12,13].
Data for the other three SDGs initially identified is unavailable, indicating its less relevance to
the sector. However, materiality will be further determined based on inputs from broader
stakeholder groups.
The findings are based on primary data collection gathered via factory self-reporting.
Self-reporting is the most common form of business sustainability data disclosure to date, and
it means that the information shared by the factories has not been subject to verification by a
third-party audit.

Report’s highlights
This report showcases how the RMG sector is not only contributing to the country’s macroeconomic performance, but
also to the country’s NPIs and SDG targets. The report does so through business disclosures linked to SDGs and shared
on a voluntary basis by 47 factories participating in the study.

Among the
47 factories that contributed to this report

38%
focuses on Woven
36%
on Knit
7%
on Sweater
19%
produces both
production Woven and Knit

In the Financial Year

2019-2020 the 47 factories exported
BDT. 133.34 b
with 32 factories being 100% export oriented and the rest of them adressing both local and export market.

The data showed that all participating factories have an Environment Management System
(EMS) policy approved by the factory management. 42% of factories have set measurable goals
to reduce energy, waste, and resource consumption that range from 2% to 15% in the next
three years; and set greenhouse gas emissions (GHG) and water consumption five-year
reduction goals that range from 5% to 25%. 34% of factories have either a ‘reuse’ or ‘recycle’
waste practice. Furthermore, in the past three years, the factories reduced their plastic
consumption by an average of 30%. 98% of factories said to have an environmental grievance
mechanism system in place, 6% of which took immediate action when receiving complaints
about the disposal of solid waste in local waterways.

07
EXECUTIVE SUMMARY

100%
Moreover, all participating factories have a Social
Compliance Policy in place as per Company Code of
Conduct (CoC), Labor Law 2006, and Buyer CoC. The
Policy is managed by Human Resources and
Compliance Departments. Additionally, while 11% of
factories regularly report on their Higg index to buyers,
all participating factories have set their own
compliance-related goals and targets in accordance of the factories have a Social
with internal stakeholders. Most factories said that they Compliance Policy in place as per
Company Code of Conduct (CoC),
identify their sustainability priorities based on baseline
assessments from which they take necessary actions to
improve their performance. Labor Law 2006, and Buyer COC

There are, indeed, industry challenges, especially considering the ripple effect of the COVID-19
pandemic, yet the RMG contribution to NPIs and SDGs is critical. The collaboration with relevant
stakeholders and sustainability data measurement and management has a pivotal role to play
for private sector SDG financing in Bangladesh.

1
Bangladesh Ready-Made Garments Industry at a Glance, http://www.bangladeshdenimexpo.com/bangladesh/rmg-sector/
Sustainable approach requires for garment industry in post-COVID-19 world, cited by Ms. Rubana Huq, President of BGMEA,
2

https://www.textiletoday.com.bd/sustainable-approach-requires-garment-industry-post-covid-19-world/
3
90+% of listed companies globally report on sustainability practices using GRI Standards, and Stock Exchanges globally
including Dhaka Stock Exchange, have GRI Guidelines for business disclosure.
4
https://www.businesscalltoaction.org/

08
 ABOUT THE COLLABORATORS

BGMEA
The Bangladesh Garment Manufacturers and Exporters Association (BGMEA),
established in 1983 with only 12 members, is one of the largest trade associations in the
country representing 4,621 members as of 2019. BGMEA’s focus is solely into RMG
sectors, which impacts the lives of over 4 million workers directly and 10 million
indirectly. Starting its journey in 1983 today BGMEA takes care of an industry that has
been making significant contribution to the socio-economic development of
Bangladesh. The industry accounts for around 84% of the total exports of Bangladesh
and has created employment for around 4.1 million people. Since the inception, BGMEA
is dedicated to promoting and facilitating the path of progress for the apparel industry
through policy advocacy to the government, services to members, ensuring workers’
rights and social compliance at factories. BGMEA is headquartered in Dhaka, Bangladesh
and its regional office is located in Chattogram, Bangladesh. The association has a total
of 357 permanent employees who provide services to members in the office premises.

UNDP
The United Nations Development Programme (UNDP) in Bangaldesh supports the
people and Government to create a more sustainable, peaceful, innovative and resilient
economy, environment and society. UNDP’s work helps partners to improve the quality
of Bangladeshi governance, and reduces poverty and inequality in cities and villages
across the country.
UNDP Bangladesh has been a key facilitator in Bangladesh’s remarkable development
story since it first arrived in 1972. Since then, UNDP has assisted Bangladesh’s
progression from a war zone, beset by environmental and political instability, to an ever
more dynamic, youthful and resilient emerging economy with distinct promise. UNDP
Bangladesh has been a valuable partner throughout this process, acting as an honest
broker and a helpful catalyst in promoting transformational changes in the lives and
livelihoods of the people of Bangladesh.

GRI
Global Reporting Initiative (GRI) is the independent, international organization that
helps businesses and other organizations take responsibility for their impacts, by
providing the global common language to report those impacts. The GRI Standards are
developed through a multi-stakeholder process and made available as a free public
good. The GRI secretariat is headquartered in Amsterdam, the Netherlands, and it is
composed by industriy experts from diverse sectors and countries. GRI has a network of
seven regional hubs ensuring support to organizations and stakeholders worldwide.
The development of this report has been made possible by the Government of Sweden,
who support GRI’s work through funding from the Swedish International Development
Cooperation Agency (Sida). GRI and Sida are collaborating through the Responsible
Business for Sustainable Development program. This five-year partnership integrates
sustainability disclosures in policymaking and organizational business strategy, to
catalyze action towards the SDGs.
Note that responsibility for the content lies with the creator. The Government of Sweden
does not necessarily share the expressed views and interpretations.

09
BACKGROUND

The RMG sector of Bangladesh directly impacts the lives of over

four million workers, and other ten million indirectly. Today’s
industry has been making significant contribution to the
socio-economic development of Bangladesh, accounting for
around 84% of total exports of the country. North America and
Europe are the two major destinations of RMG exports from
Bangladesh. In 2019, Bangladesh exported USD 9.8 billion to the
European Union (EU) and USD 3.5 billion to North America.
Export to Australia is gaining momentum and the sector is also
exploring other markets, such as Japan, China, Brazil, and
Mexico5.
When it comes to sustainability, the RMG factory owners showed incremental
improvements in their commitment to ensure health and environmental safety.
Many factories are opting for the Leadership in Energy and Environmental Design
(LEED) Certification for their buildings. Vertically integrated knit composite
factories are investing in state-of-the-art effluent treatment plants (ETP) and most
of the LEED certified factories have their own sewage treatment plants. All these
and other compliance investments represent a huge cost for the factories’
operations, especially considering the low liquidity margins under which the
industry structurally operates. Social and environmental compliance investments
are incrementally impacting the bottom line as actual prices decline. This trend
started prior to the COVID-19 pandemic and is getting exacerbated by it. With
prices declining, factories are struggling to maintain social and environmental
compliance costs aligned with the expectations of buyers and other stakeholders6.
While the industry and business ecosystem is becoming harder to navigate, the
sector is central to the country’s economic development and is one of its biggest
employers, having created around 4.1 million jobs. Creating employment
opportunities is one of the most sustainable ways to serve the community and lift
people out of poverty. In collaboration with the Government and development
partners, BGMEA has been implementing skills development training in different
parts of the country, especially in the most disadvantaged areas, to enable an
inclusive approach to skills development and a diverse work force in garment

10
 To tailor SDGs to the needs of Bangladesh and ensure a concrete approach to the
achievement of their targets, on the 3rd of December 2018 the Government of
Bangladesh approved 40 (39+1) priority indicators for localizing SDGs. 39
indicators from 17 Goals were selected which were considered to be crucial for
local development and producing reinforcing effects on other targets.

factories. Since 2014, this up-skilling effort represented an investment of USD 14.9 million
from BGMEA and its partners. Through an online platform that allows member factories to
update their data on recruitment and turnover, BGMEA not only records formal
employment data linking worker profiles to the national IDs and providing financial
benefits from the Central Workers Welfare Fund, but it also collects sustainability data.
Key to the achievement of sustainability standards by the industry have been partnerships:
not only partnerships to co-invest in labor force up-skilling or partnerships with the
Government, non-governmental organizations (NGOs) and buyers to eradicate child labor,
but also partnerships that led to the set up of a permanent safety monitoring body: the
RMG Sustainability Council (RSC). Established in May 2020, the RSC is an unprecedented
national supply chain initiative that unites the industry, brands and trade unions to ensure
sustainable solutions for workplace safety in Bangladesh, and supports the enforcement of
the Bangladesh Labor Act – 2015, which mandates all factories to have their own health
and safety committee with representation from both workers and the management7.
To tailor SDGs to the needs of Bangladesh and ensure a concrete approach to the
achievement of their targets, on 3 December 2018 the Government of Bangladesh
approved 40 (39+1) priority indicators for localizing SDGs. Considered crucial for local
development, 39 indicators from 17 Goals were selected, as well as an additional priority
indicator to translate the ‘leaving no one behind’ motto into concrete actions. The
localization of the SDGs aims to make SDG aspirations real to communities, households,
and individuals, particularly those who are at risk of falling behind.
Based on the principle of materiality – topics that matter most to the business and its
stakeholders, the approach that informs this report links business sustainability disclosures
to the SDGs and NPIs. The next section explores WHY it is important to have a common
language across business and the public sector to measure SDGs, HOW this report builds
that common language, and WHAT has been and can be achieved in the future through it.

5
Source: EURO STAT; Office of textiles and apparel, USA; EPB, Bangladesh
BGMEA sustainability Report 2020,
6
http://download.bgmea.com.bd/BGMEA%20Sustainability%20Report%202020.pdf
7
LBGMEA sustainability Report 2020, http://download.bgmea.com.bd/BGMEA%20Sustainability%20Report%202020.pdf

11
APPROACH

While some factories in Bangladesh do measure and manage their impact on people, the
environment and governance issues through sustainability reporting, the data they

WHY
collect is not always translated in the language of NPIs and SDGs. Furthermore, while
factories look at their individual company data, to understand and communicate the
value added of the industry to the achievement of NPIs and SDG targets, it is key to both
translate sustainability reporting data into the language of NPIs and SDG and consolidate
the data from multiple companies in order to understand industry trends and
contributions. In fact, the importance of consolidated industry data is true for both export
and sustainability data. When making policy and business decisions, the data on
aggregated export is more indicative of industry trends than the data of individual
companies. The same applies to sustainability data: individual company data is important
but consolidated industry data is key to understand industry trends. It is important that
the aggregated sustainability data of the sector is communicated to the Government,
buyers and other stakeholders, demonstrating the overall contribution by the industry
and it is also important for understanding how the financial drivers behind sustainability
could be further stimulated to generate both better business performance and stronger
NPIs and SDGs achievements.

Recognizing that factories are already completing different forms of sustainability

reporting, this report is not a duplication of existing efforts but an overarching framework

HOW
to create a common language that links the sustainability data that is already measured
and managed by factories to the language of NPIs and SDGs. Creating a common
language among the public and private sectors is crucial, especially considering the
expectation of the SDGs Financing Strategy of a 42% contribution from the private sector,
and the ambition of the 8th Five-Year-Plan that foresees an even higher private sector
contribution of 75% .
The starting ground for this report was the analysis of 39+1 NPIs and related SDGs and the
following questions:
a. Which NPIs are most relevant and important for the RMG sector?
b.Which NPIs are affected by or have an impact on RMG business?
This led to the identification of 12 SDGs that are applicable for RMG: SDG 1 to 7, 8 and 9,
12 to 14. Then, the existing metrics of measuring the private sector impact were linked to
the selected NPIs and SDGs. Considering that the desired outcome was to create an
overarching structure to link business sustainability data to NPIs, the metrics selected
were the most used by businesses because of the global standards, buyer requirements,
and the criteria of inclusivity of the ‘Leaving No One Behind’ priority. For their de facto
mainstream adoption, GRI global Standards8 were selected as one metric – especially
considering the GRI-UNGC’s ‘Analysis of Goals & Targets’ (a handbook of indicators to
make reporting on the SDGs straightforward and simple to execute) that was also referred
to. To capitalize on the existing data collected due to buyers’ requirements, the Higg
Index9 (a suite of tools developed by the Sustainable Apparel Coalition) was selected as a
second metric. Last but not least, to ensure an inclusive approach to the analysis, the
UNDP Business Call to Action’s (BCtA)10 inclusive business indicators were selected as a
third metric. The annexure includes details of the links between NPIs, SDGs and the
metrics selected.
The report used a quantitative technique to measure the changes between the last three

12
 consecutive financial years, looking at economic, social and governance performance. It
also analyzed actions that the industry took to tackle the COVID-19 pandemic and its
consequences on business. Quantitative data points were complemented by qualitative
observations from the factories. Both quantitative and qualitative data was collected
through a web-based questionnaire and complemented by focus group discussions
(FGDs).
50 RMG factories participated in the process, and 47 completed their sustainability
self-reporting based on the methodological template shared by UNDP and GRI.

This report sets the benchmark for scaling sustainability reporting of the industry and the
private sector more broadly, translating sector-specific achievements and challenges into
the common language of NPIs and SDGs for a more effective public-private dialogue and

WHAT
SDG action.
The report is to be used for informed dialogues with relevant stakeholders, such as trade
partners, buyers, the financial institutions and the Government of Bangladesh, which
made national and international commitments to NPIs and SDGs. Some of these
commitments are driving commercial relations, and provide access to financial products,
government policies and incentives. While individual suppliers started engaging in
sustainability reporting, there is no data on the impact of the sector as a whole. However
before any interaction with individual companies, trade partners, buyers, financial
institutions and governments make commercial and political decisions based on a
country and sector-specific data.
In a nutshell, this report provides:

a consolidated approach to measure and manage the RMG industry’s

impact on SDGs, its achievements, challenges and gaps.

a tool to identify future paths for growth and increased industry

impact on NPIs and SDGs.

a common language to communicate with key stakeholders, such as

the Government, buyers, trade partners, communities and others.

a platform to encourage more RMG factories and other industries to

undertake sustainability reporting.

a step in the journey of translating the private sector contribution to

SDG financing in Bangladesh into concrete achievements and future
actions.

8
Global Reporting Initiative (GRI) is an international independent standards organization that helps businesses,
governments and other organizations understand and communicate their impacts on issues such as climate change,
human rights and corruption.
9
the Higg Index was developed by the Sustainable Apparel Coalition, is a suite of tools that enables brands, retailers,
and facilities of all sizes at every stage in their sustainability journey to accurately measure and score a company or
product's sustainability performance
10
UNDP Business Call to Action (BCtA) was launched at the United Nations in 2008, aims to accelerate progress towards
the Sustainable Development Goals (SDGs) by challenging companies to develop inclusive business models that engage
people at the base of the economic pyramid (BoP)

13
KEY FINDINGS

13% 44% 13% 30%

Number of Company
<1000

A total of 47 factories (woven, sweater and knit) participated in this report.

In the Financial Year
2019-2020 the 47 factories exported
BDT. 133.34b (USD 1.6b)
Among these 47 factories, 32 factories are 100% export- oriented and the rest target both local and export markets [Figure 1].
1001-
3000

Factories Profile
This section highlights management approaches adopted by the factories to
handle environmental and social aspects and does a deep dive on specific NPIs
3001- and SDGs achievements.
5000
>5000 Management approaches are about how a factory manages its sustainability
impacts related to material topics- topics that matter most to the business and
its stakeholders. This provides narrative information about how the factory
identifies, analyzes, and responds to its actual and potential impacts. The
Figure 1 management approaches provide a framework for the deep dive on SDGs and
Organization size by number of employees NPIs achievements self-reported by the factory.

Management Approach For The Environmental Aspects

All participating factories have their Environment Management System (EMS)
policy in place in reference to the Department of Environment’s (DoE)
guidelines and the Buyer Code of Conduct (CoC). 22% of factories consolidated
sustainability data as per Higg index or other international global
environmental standards or policies. Examples include but are not limited to
ISO 14001:2015, Amfori BEPI, ECR 1997, ZDHC, Clean Chain, BVE3 etc., or
policies such as Chemical & Waste Management and Reduce Reuse Recycle
(3Rs).

42%
of factories set goals to reduce energy, waste and
resource consumption in the next three years that
range from 2% to 15%; whereas their GHG emissions
and water consumption reduction goals for the next
5 years range from 5% to 25%.

14
 year 2025

year 2023
5%-15% 5%-15% 5%-25% 5%-25%

2%-15%
Reduce Energy Consumption

Reduce Waste Generation

Reduce Resource Consumption

Reduce GHG Emission

Reduce Waater Consumption

Figure 2:

Goals & Target

34%
of factories are already implementing either a
‘Reuse’ or ‘Recycle’ waste practice [Figure 2].
Furthermore, in the past three years, they reduced
plastic consumption by an average of 30%.

98%
of factories informed that they have environmental
grievance mechanism systems in place, and out of
those 6% received complaints due to the incorrect
disposal of solid waste. However, corrective actions
were taken immediately.

Management Approach For The Social Aspects

The management of social aspects is driven by the Social Compliance policy as required by the
Labor Law 2006 and its amendment in 2019, the Company Code of Conduct (CoC) and the Buyer
Code of Conduct, and is led by the Human Resources and Compliance Department. Additionally,
while 11% of factories regularly report on their Higg index to buyers, all participating factories have
set their own compliance-related goals and targets. All participating factories have a Social
Compliance Policy in place. Most factories said that they identify their sustainability priorities based
on the baseline assessments, and take necessary actions for improvement accordingly. Some
notable goals and targets mentioned by the factories are:

• Develop a violence-free organization

• Engage 100 % of workers in fire and safety training
• Install hydrant, fire protection and detection systems
• Ensure digital payments
• Promote women empowerment and create awareness of health and hygiene
• Optimize Yearly Key Performance Indicators to improve the work environment
• Develop skills of workers that could lead to salary increase

15
SUSTAINABLE
DEVELOPMENT
GOALS

16
 SDG 1: End poverty in all its forms everywhere

SDG 1 Business relevance Results

Business actions that relate to SDG 1 include creating In the financial year 2019-2020, participating 47
employment opportunities and promoting job security; factories employed 44,064 workers: 17,250 males and
paying employees, at the very least, a minimum living 26,814 females. All – or 100% - factories said that they
wage; putting in place internal policies to safeguard the hire workers and employees from the local
safety of employees; supporting fair and affordable access community for entry to top-level jobs. 38% of
to goods, services and livelihood opportunities, including factories run local community development
economically disadvantaged and marginalized and programs. These programs are based on local
underrepresented people in the workforce; and communities’ needs to boost financial literacy,
supporting suppliers and business partners in respecting promote fair price shops that contribute to lower
human rights and meeting sustainability criteria, among costs of living, subsidize sanitary napkins for workers,
others. award scholarships for poor students, repair roads,
etc. Factories also reported on stakeholder
Type of data collected
engagement plans to address current needs.
Both quantitative and qualitative data was collected in
With regards to the gender pay gap: basic salaries
order to understand monthly salary ratios between
have an equal male to female ratio, though the gap
women and men, salary practices of service providers in
increases from mid-management up to top
the value chain, percentage of local hires, local
management levels, with males having higher
community participation and benefits, etc.
salaries.

Basic Salary Ratio

Male: Female

Level of HR

Board of Directors 1 : 2 1 : 2 1 : 2

Senior Management 1 : 5 1 : 35 1 : 25

Mid-Management 1 : 4 1 : 1 1 : 2

Junior Management 1 : 1 1 : 1 1 : 2

Worker 1 : 1 1 : 1 1 : 1

2017-18 2018-19 2019-20

Table 1

Basic Salary Ratio – Male: Female

17
 SDG 3: Ensure healthy lives and promote
well-being for all at all ages

SDG 3 Business relevance Results

Business actions that relate to SDG 3 include Factories are consistently investing in and improving
encouragement of a healthy lifestyle; supporting access the retention of women employees after maternity.
to healthcare; medical coverage offered to employees Most of the factories provide health insurance11
and their families; ensuring that company policies and complemented by subsidized access to health care
practices respect reproductive rights; supporting the products, such as sanitary napkins12. The average
needs of mothers and children; supporting access to retention rate of reintegration at work after maternity
mental health care; promoting safe and healthy leave increased by 3% in the financial year 2018-2019,
surroundings around factory facilities; providing training and by 7% in the financial year 2019-2020 despite the
or information on road safety to employees, etc. challenges faced by the industry during this fiscal year
Type of data collected [Figure 3]. 17% factories have paternity leave policy.

Mostly quantitative data was collected relating to

parental leave, retention rate after enjoying parental
leave, other health-related benefits that employees and
workers are receiving.

FY 2017-18

112 101 96 Average Entitled for Maternity Leave

FY 2018-19

FY 2019-20

108 100 94 Average Leave Taken

98 88 83 Average come back into work after

taking maternity leave

74 62 55
Average come back into work and
stay 12 months after taking maternity leave

Figure 3 11
Labor Law 2006, Section 99: Compulsory Group Insurance:
Parental Leave Government may, in the manner provided by rules, introduce group
insurance, in the establishments wherein minimum 200 permanent
workers are employed.
12
Under their CSR, few factories provide subsidized sanitary napkin to
female workers.

18
 SDG 4: Ensure inclusive
and equitable quality education

SDG 4 Business relevance Results

Business actions that relate to SDG 4 include aligning All participating factories are investing in technical
business and education priorities in the communities and vocational training programs to upgrade
where they operate; contributing business expertise employee skills and facilitate their career progression.
towards increasing access to, and the quality of, basic Most of the participating factories have procurement
education; enforcing zero-tolerance child labor policies guidelines in place on child labor when selecting
within factory operations and supply chain; supporting suppliers or vendors, but the monitoring mechanisms
access to childcare for employees; providing remain challenging to implement.
non-discriminative policies and programs on vocational
training as well as incentives for employees to obtain
additional qualifications, etc.
Type of data collected
Quantitative data was collected in order to calculate the
duration of capacity development program for upgrading
employee skills as well as the transition assistance
programs in the RMG sector.

19
 SDG 6: Ensure Clean Water
and Sanitation

SDG 6 Business relevance Results

Business actions that relate to SDG 6 include respecting 15% of participating factories use recycled water in
the human rights to safe drinking water and sanitation their production process or in sanitation facilities, and
through aspects of availability, accessibility, and the 23% of factories practice rainwater harvesting and use
quality of water; understanding the impact of the factory’s this water for gardening, car washing or in sanitation
current and long-term water use (either through water facilities. The majority of participating factories – or
withdrawals or discharges) on communities’ access to safe 91% - use borewell water, with 32% of factories
and affordable water; providing safe and affordable sourcing water from municipality infrastructures
drinking water to employees; being aware of the factory’s [Figure 4].
impact on local sanitation and hygiene systems; providing Factories discharge water from ETP after testing the
safe and gender-segregated toilets and personal hygiene treated water’s hydrogen levels (pH), the chemical
equipment; establishing policies and ensuring waste and biochemical oxygen demand (CoD and BoD), the
water management systems within factory premises; total suspended and dissolved solids (TSS and TDS),
improving water management performance; temperature, color and other parameters as per the
understanding the impact of water use across the supply ZDHC guidelines. 9% of factories mentioned that they
chain, etc. discharge their treated water in rivers and the rest of
Type of data collected participating factories said that they discharge the
treated water into sewer lines.
Quantitative data was collected in order to identify the
sources of water used by RMG factories in their
production process and other activities, analyze the water
processing systems and costs involved, as well as the
volume of water recycled and reused.

Bore well water Municipal water Rain Harvesting Recycle & Reuse

91% 32% 23% 15%

Figure 4

Source of Water

20
 SDG 7: Ensure access to affordable,
reliable, sustainable and modern energy for all

SDG 7 Business relevance Results

Business actions that relate to SDG 7 include reducing There was a 6% reduction in electricity consumption
energy consumption within factory operations; tracking sourced from conventional energy between the
and reporting energy usage, reduction and intensity over financial years of 2017-2018 and 2018-2019, and an
time; setting energy efficiency standards; implementing additional reduction of 14% in the financial year
innovative commercial models or tariff mechanisms; 2019-20. In this past financial year, while 36% of
investing in sustainable energy solutions; increasing the factories reported that the 22% reduction in energy
share of renewable energy, and encouraging suppliers to consumption is linked to the fact that production was
adopt sustainable energy measures. hampered due to COVID-19, the other 64% of
factories reported no change in energy consumption
Type of data collected
needs due to the pandemic. Overall, the data
Quantitative data was collected to track energy demonstrates that conventional energy consumption
consumption within and outside the factory premises as declined by an average of 8% in the financial year
well as the costs per year, and to understand the extent of 2019-2020.
renewable energy adoption.
Outside the factories, the reduction in energy
consumption remained insignificant in the financial
year 2018-2019 (2% compared to the previous
Outside Factory Inside Factory financial year), and the consumption of conventional
(or non-renewable) energy reduced by 17% in the
2017-18 financial year 2019-2020. Less production and a
decrease in vehicle movement due to the COVID-19

2% pandemic are identified as two biggest contributing

factors to the reduction in conventional (or
2018-19

6%
non-renewable) energy consumption outside the
factories13.
37% of factories started to utilize solar energy
between the financial years 2017-2018 and 2019-2020
[Figure 5].
In the financial year 2017-2018, the total energy
conservation14 by participating factories totaled 90.2
million kWh, decreasing by 2% in the financial year
2018-2019, to then increase by 5% in the financial year

17% 14%
2019-20 2019-2020. There might have been different factors
contributing to the variation. Between 2017 and 2019,
the production volumes, product orders, and resource
allocation could all have contributed to the decline in
energy conservation; whereas less production, factory
lay-offs, and limited transportation due to the
Figure 5 COVID-19 pandemic could have resulted in the
Reduction rate of electricity consumption sourced from conventional energy increase in energy conservation15 .

21
 SDG 8: Decent work
and economic growth

SDG 8 Business relevance Results

Business actions that relate to SDG 8 include generating Buyer compliance is an important pre-requisite for
added value in the domestic economy through creating the RMG sector. International buyers have
job opportunities and skill development; upgrading established compliance with COC, addressing key
technology and stimulating innovation; supporting issues such as child labor, forced or compulsory labor,
vocational education; providing decent work and health and safety, freedom of association and the
productive activities for all employees in factory operations right to collective bargaining, discrimination,
and within the supply chain; assessing and mitigating disciplinary practices, working hours, remuneration,
environmental impacts of products and services; management system, etc. Together with major trade
establishing sustainable procurement policies; unions in Bangladesh, BGMEA has formulated its own
implementing circular business models; paying, at the very COC to centrally monitor labor conditions, the
least, a minimum living wage; establishing a zero-tolerance establishment of safety committees and health and
policy towards all forms of violence in the workplace; safety COC, and address labor grievances. Besides
establishing policies, procedures, grievance mechanisms to that, the RMG sector is required to comply with the
safeguard labor and women’s rights; supporting the youth National Labor Law 2006 and its amendment in 2019
by ensuring equal opportunities, etc. to ensure the worker safety and security.
Type of data collected All factories that participated in data collection
shared that they manage social aspects in alignment
Both quantitative and qualitative data was collected in
with labor law, buyer COC and BGMEA COC. To
order to understand and evaluate the decent work
evaluate the effectiveness of their social
practices such as occupational health and safety, gender
management approach, the factories are using
ratio in recruitment, the existing management practices,
baseline assessments, internal and external audits,
compensation and benefits, recycled input material used,
social audits, benchmark surveys and other tools.
etc.
It is interesting to note that in terms of hiring male
employees, a significant decline can be seen in the
financial year 2019-2020, whereas usually the rate of
decline in hiring and turnover remains the same from
one financial year to another. The decline rate is
falling each year.

Gender Ratio of permanent employees, hire and turnover 2017-18 2018-19 2019-20

Ratio of the average number of permanent employees (male: female) 154:172 154:170 140:161

Ratio of employees hired (male: female) 768:998 618:791 399:625

Ratio of employees’ turnover (male: female) 722:980 619:818 554:754

Table 2

Number of Permanent employees hired and turnover

22
 Profit Share 6%

Pension Fund 19%

Service Benefits 32%

Health Insurance 36%

Physical Disability Insurance 70%

Health Facility 81%

Maternity Leave 100%

Figure 6

Remuneration, Allowance & Facilities Life Insurance 100%

Despite recent challenges, employee turnover

reduced progressively by almost a quarter in the past
three financial years: from 1,702 across 47 factories in
the financial year 2017-2018 to 1,308 in the financial
Inspiring Actions year 2019-2020 [Table 2].

by Factories Not only did factories retain more employees, they

also invested in improving working conditions by
collaborating with buyers on social programmes,
Fakir knitwear such as Health Insurance and Sexual and
100% Payment digitalization and Reproductive Health and Rights. All participating
factories provide maternity leave and life insurance;
promoting 10 female workers to 70% of factories provide physical disability insurance;
supervisor level. 19% provide a pension fund, and 6% of them have a
profit share scheme [Figure 6].

SQ Birichina Ltd. and SQ

Celsius Ltd
Fair price shop to reduce the cost of
living for employees and subsidized
medical treatment for workers.

In total, 6 companies said

they hire differently abled
workers.
13
from outsourced activities previously performed in-house, or that
are typically performed in house by other organizations in the same
sector; has been identified as significant for the organization’s
sector.
14
Few energy conversion methods: Solar Installation, LED Light,
Replacing Conventional and Clutch type motors with Servo Motors,
Reducing dependency on diesel, Condenser Recovery, Economizer
Installation, Energy efficient generator, Boiler, VFD, trigger nozzle,
Installation of energy conservation turbine in place of PRV, Lighting
optimization, Improvement in RFT, Flash Steam Reuse, Awareness
Training, Steam Line Insulation, M and S Plan-A, Higg FEM 3.0,
Temperature Settings for AC, Absorption Chiller
15
Reason for variation derived from the findings of FGD

23
 SDG 9: Industry, Innovation
and Infrastructure

SDG 9 Business relevance Results

Business actions that relate to SDG 9 include creating 24% of factories made significant infrastructure
decent jobs; integrating environmental and social issues investments that created additional value in the
within core business operations; providing innovative communities where they are operating. In the
solutions to tackle development challenges; capitalizing financial years 2017-2018 and 2019-2020, the total
on the opportunities of upgraded infrastructure through investments in community infrastructure equaled
collaboration across the value chain; investing in local BDT 944 million (USD 11,137,957) – BDT 27,495,231
value addition and local purchasing; supporting the on average, out of BDT 232.23 billion (USD 2.7 billion)
development and diffusion of environmentally-friendly investments in overall infrastructure improvements
technologies through material efficiency and reuse of undertaken by 74% of participating factories [Figure
materials and manufacturing processes; investing in 8].
energy efficiency in buildings, road safety equipments,
autonomous vehicles, smart metering, water and
sanitation infrastructure, etc.
Type of data collected
Quantitative data was collected in order to calculate the
direct economic value generated and assess the
infrastructure investments and services supported by the
RMG sector in Bangladesh.

BDT 232.23b
BDT 944m

Figure 8

Factories’ Investments in Community Infrastructure

24
 SDG 12: Responsible consumption
and production

SDG 12 Business relevance Results

Business actions that relate to SDG 12 include ensuring In the financial year 2018-2019, 93% of participating
the respect of human rights; addressing positive and factories reduced solid waste generation in their
negative social and environmental impacts; working industrial processes by an average of 255 tons; and in
towards improving efficiency and effectiveness of the financial year 2019-2020 by 52 tons. 38% of
material and energy use; establishing policies and factories lowered the sludge waste generation in
strategies aligned with the above principles; developing their processes by 61 tons, or an average of 19 tons in
specific sustainability targets and indicators across each financial year. There is no significant change in
products and services; developing circular economy liquid waste generation across the three financial
models; using resources more efficiency; leveraging the years taken into account.
renewable materials and efficient clean technologies; 41% of factories collaborated with buyers on cleaner
tracking and reporting on sustainability risks and production and supply chain efficiency. Examples
performance; understanding waste generation and include recycled raw materials. The amount of
mitigating measures; extending the responsibility of a recycled raw materials used by the factories is
product to the post-consumer stage of its lifecycle, etc. increasing at a constant rate of 2% per year. [Figure
Type of data collected 7]. The majority of recycled materials are fabric,
plastic, yarn, and hangers used in factory production.
Both quantitative and qualitative data was collected on As methods and processes of recycling are further
liquid, solid, and sludge waste generation process, developed and scaled, today all factories use a mixed
existing disposal methods, transportation of generated approach of incorporating both non-renewable and
waste volume, plastic waste, etc. renewable raw material in their production.

19% of factories shared that they have set up energy

recovery systems by practicing waste heat recovery –
that is, by transferring the heat from process outputs
9% 11% 13% at high temperature to another part of the process to
increase efficiency.
These innovative practices were shared during the
FGDs used to collect qualitative data, making data
2017-18 2018-19 2019-20 collection an opportunity for sharing best practices
and knowledge. As a result, 80% of factories said that
with newly acquired understanding of the potential
Figure 7 of waste heat recovery, they will introduce this
Recycled raw material used by factories practice in their own factories very soon.

By optimizing processes, Fakir knitwear saved 28.5 liters of water per kg of fabric dyeing in 2020.

Needle Drop reduced their electricity consumption by 5% in 2020.

25
 SDG 13: Climate action

SDG 13 Business relevance Results

Business actions that relate to SDG 13 42% of factories set goals to reduce GHG emissions in the next five
include identifying risks and opportunities to ten years that range from 5% to 25%. Striving to achieve the
caused by climate change; setting targets set, 25% of factories reduced their GHG emissions by 6% in
science-based GHG reduction targets; the financial year 2018-2019, and 39% factories saw a 18%
improving efficiency and climate resilience reduction in GHG emissions in the financial year 2019-2020. 27%
of operations and supply chain; responsibly of factories added that hampered production because of the
engaging in climate policy by identifying COVID-19 pandemic contributed to their overall GHG emissions
implications and opportunities; investing in reduction. When asked about the ways they measure their GHG
early warning technologies and systems, etc. emissions in order to understand if they’re on the right track to
meeting the set goals, 48% of factories reported that they
Type of data collected
undertake the environmental assessment initiatives, periodically
Both quantitative and qualitative data was verifying the alignment of these assessments with existing laws,
collected to assess the reduction in GHG regulations, and standards. The average cost of the annual
emissions and the measurement methods baseline assessment to manage climate change risks and
used, as well as the financial Implications and opportunities for individual factories was reported to be BDT.
other risks and opportunities linked to 781,925.03 (USD 9,226), which can exclude smaller factories and
climate change. suppliers from this practice.
While measuring their positive and negative impacts on climate
change, the participating factories also identified the related
financial implications and other risks, such as:
a) increased indirect costs and capital expenditures
b) decreased revenue due to reduced demand for products and
services
c) the Government penalties if emissions exceed the limits of the
Bangladesh Environment Conservation Rules, 19997 (ECR-1997)
d) cancellation, and/or delay in shipment
The factories, however, did also identify climate change related
opportunities, such as:
a) subsidized stimulus packages from the Government in support
of the transition towards renewable energy and other sustainable
technologies
b) reduced water usage and consumption, the use of
lower-emission sources of energy, access to new markets and
recycling
c) the increase in satisfaction levels of conscious consumers
driving the demand and business transactions

26
THE IMPACT OF COVID-19 ON RMG SECTOR
AND RMG RESPONSE
The social impact of COVID-19

24%
of factories reported that they had workers affected by COVID-19. The employees
affected returned to work within an average of 25 days upon submission of a
COVID-19 negative test.

13%
of factories said that due to financial losses incurred by COVID-19 they had to fire and
furlough workers; they also shared that they compensated, remunerated and
provided allowances to those who got fired or furloughed as per labor law.

Training programs have been reduced and delivered irregularly to avoid gatherings.

RMG response to the social impact of COVID-19

ALL factories provided masks to their employees; installed hand washing and
sanitizing systems, foot and shoe sanitizing options; procured and used thermal guns;
disinfected cars upon entry; marked safety distance in the work place.

All participating factories introduced special Occupational Health and Safety (OHS)
packages in their premises to combat COVID-19.

The impact of COVID-19 on

business and operations
RMG response to the impact
Production was deferred due to COVID-19 and some of COVID-19 on business and operations
buyers put their orders on hold. Finished products
were held for an extensive period of time in Factories developed COVID-19 Standard Operating
warehouses and resulted to be damaged. Procedures (SOPs) and designed emergency plans.
Some factories also reported operational challenges Factories became more flexible in introducing technology
due to shortage of local manpower once production in operations and digitalized awareness campaigns
restarted. through audio-visuals to encourage employees to adhere
to the SOPs.
6% of factories adopted new business models or
innovative plans to incorporate sustainability in the
post-pandemic business recovery.

27
KEY CHALLENGES

Supply chain disruption

The COVID-19 pandemic highlighted the lack of sustainability management tools to combat
disruptions in the supply chain, but it also provided an opportunity to reflect and plan for future
actions. 27% of participating factories needed to reallocate resources from existing sustainability
practices to fight against COVID-19. This, in turn, resulted in inability to carry out security
awareness training on a regular basis, adjust salaries and compensations, undertake capacity
development trainings and maintain regular operations of production process, etc. Prior to the
current COVID-19 crisis there were no SOPs in place to support management decisions in the
eventuality of value chain disruption, hence the challenges, instead of being solved in a systemic
manner, had to be dealt with one at a time.

Sustainability data
The understanding of sustainability language, impacts, risks and opportunities is not yet
mainstream across factories and the factory management. This creates challenges in
strenghtening the quantity and quality of sustainability data available. Capacity building across
different units can support strenghtening the understanding of sustainability and creating more
flexible and resilient operations. Additionally, policy reforms are needed to encourage reliable
sustainability reporting based on global standards at scale.

Moving from impact measurement to impact management

capacity building on effective impact management is required to ensure that sustainability data
is readily available and not looked at as simply monitoring data, but as data that can effectively
support the decision-making by the management. During the data collection undertaken for this
report factories had to locate the data before disclosing it, which suggests the need for additional
capacity building on data management. Additionally, while most of the participating fatories
reported conducting baseline assessments, 77% of them didn’t highlight the detailed
improvements undertaken based on the assessments, and only 11% of participating factories
have information available on related adjustments. This insight shows the need for capacity
building in order to shift from sustainability monitoring to sustainability management by, for
instance, introducing Corrective Action Plans (CAP), making data readily available and raising
awareness of how to link sustianability data and the financial drivers to better management
decisions.

Awareness of the relevence of social and economic value

generation
While in the past there have been investments in community infrastructure by factories, there is
room for improvement when it comes to raising awareness of their impact and the economic
potential. For instance, while only 15% of factories did not share data on this, 53% of them
self-reported to not having significant investment in infrastructure support services.

Structural low liquidity

while awareness on the importance of undertaking sustainability practices is growing, for
industries operating at low liquidity such as RMG it is key to optimize payment process cycles and
access financing instruments designed keeping low liquidity in mind. Payment processes,
financing instruments design and capacity to match compliance requirements of financing
instruments are still a challenge for the RMG in Bangaldesh to finance sustainability.

28
 IMPACT OPPORTUNITIES FOR FURTHER IMPROVEMENT
Note: the opportunities for further improvement highlighted below are interlinked and carry a stronger ecosystem transformation potential when looked at in a systemic way.

There is now the opportunity to build consensus and

1 capacity around the need to develop a systemic
management approach in which the management
Strenghtening external decisions include social, environmental, governance and
stakeholder engagament business factors in a mid-term scenario, i.e., if this happens,
then this is how social, environmental, governance and
while partnerships have already been a strong engine business decisions and metrics will work together to
for the achievement of sustainability standards by the suppot the shift.
industry – like with the setup of RSC, there is room to
take stakeholder engagement to a higher level. This
report takes a step in this direction, calling for additional 3
feedback and action from the Government, trade
partners, buyers and communities among others. Strenghtening capacity to systemize
Social, environmental, governance and economic and quantify sustainability
management processes are effective when the shift
from sustainability measurement to sustainability To strenghten management approaches, it is key to
management occurs, i.e., making decisions based on strenghten and diversify the quality of data that is used to
sustainability data for a set vision, goals and measurable make management decisions. Reinforcing the
targets. Stakeholder engagement can support the understanding of risks and opportunities behind
creation of investment strategies and incentives that sustainability across business units and factories is crucial
reflect both financial return and social and to collecting the ‘right’ data, or data that is useful for
environmental impacts. At macro level, policy better business management.
innovation and incentives by the Government can
support scale and speed of uptake of sustainability
practices by the Industry. This can further contribute to 4
the impact of the industry on SDGs. At local level,
multi-stakeholder collaboration is seen to be key in Improvement of system
addressing cumulative impacts due to innovative communication processes
financing options and risk management practices that
can be kicked off. Examples could include the All participating factories have an EMS in place, but while
following: multiple companies’ water use can stimulate 42% of factories were able to communicate the
joint investments, business model development for measurable goals they set to reduce energy, waste, and
renewable energy and circular economy can include resource consumption, the remaining 58% faced
innovative financing such as blended public and private challenges in their communications, highlighting the
resources. Proper documentation and information need to increase efficiency of communication between
sharing on these innovations can drive systemic change technical units and the management, and ensure
in resource management. symmetry of information on measurable targets.

5
2
Strenghtening management Financing sustainability
approaches considering the strutural low liquidity of the RMG sector,
further exacerbated by the economic consequences of the
While agile process innovation was stimulated to Covid-19 pandemic, it is key to support reforms that can
respond to supply chain disruption because of optimize payment processes and analyze existing
COVID-19, most innovations were ad-hoc and looked at financing instruments to invest in sustainability keeping in
solving one challenge at a time in a sequential manner. mind the structural low liquidity of the sector.

29
30
ANNEXURE
Report Methodological Framework
Contribu�on to SDGs Sustainability Topics
Under GRI Standards BCtA
NPI Under HIGG Index
SDG NPI 1 Reduce the propor�on of popula�on 202-2 Propor�on of senior management hired from the N/A Recruitment and Hiring
1 living below extreme poverty line below local community
3% 405-2 Ra�o of basic salary and remunera�on of women
to men
401-2 Benefits provided to full-�me employees that are
not provided to temporary or part-�me
employees
NPI 2 Reduce the propor�on of popula�on 202-1 Ra�os of standard entry level wage by gender Number of employees earning less than na�onal
living below na�onal poverty line below compared to local minimum wage poverty line computed for the size of their family
10% 401-1 New employee hires and employee turnover
401-2 Benefits provided to full-�me employees that are
not provided to temporary or part-�me
413-1 employees
Opera�ons with local community engagement,
impact assessments, development programs
SDG NPI 5 Reduce neonatal mortality rate to 12 401-2 Benefits provided to full-�me employees that are Number of neonatal deaths avoided due to Worker Treatment &
3 per 1,000 live births not provided to temporary or part-�me ac�vi�es of the company Development
employees
NPI 6 Reduce under-5 mortality rate to 25 401-2 Benefits provided to full-�me employees that are Number of under-5 deaths avoided due to Worker Treatment &
per 1,000 live births not provided to temporary or part-�me ac�vi�es of the company Development
401-3 employees
Parental leave
NPI 7 Reduce the maternal mortality ra�o 401-2 Benefits provided to full-�me employees that are Number of maternal deaths avoided due to Worker Treatment &
to 70 per 100,000 live births not provided to temporary or part-�me ac�vi�es of the company Development
401-3 employees
Parental leave
SDG NPI 9 Ensure 100% comple�on rate of 408-1 Opera�ons and suppliers at significant risk for Number of people gained access to primary Recruitment and Hiring
4 primary educa�on incident of child labor educa�on due to ac�vi�es of the company*
NPI 10 Ensure 100% comple�on rate of 408-1 Opera�ons and suppliers at significant risk for Number of people gained access to secondary Recruitment and Hiring
junior secondary educa�on incident of child labor educa�on due to ac�vi�es of the company*
NPI 11 Ensure the propor�on of students 404-1 Average hours of training per year per employee Number of low-income individuals receiving Worker Treatment &
in technical level above 20% to the total 404-2 Programs for upgrading employee skills and training/educa�on Development
students passed every year in the transi�on assistance programs Total investment in training (USD)*
secondary educa�on (SSC, Dakhil, and
Voca�onal)
SDG NPI 17 Ensure 100% popula�on using 303-1 Interac�ons with water as shared resources Number of people gained access to drinking water Water Use
6 safely managed drinking water services 303-3 Water Recycled and Reused due to ac�vi�es of the company
306-1 Water discharge by quality and des�na�on
306-2 Waste by type and disposal method
306-3 Significant Spills
306-5 Water bodies affected by water discharges
and/or runoff
 SDG NPI 19 Ensure access to electricity for N/A Number of people gained access to electricity due N/A
7 100% popula�on to ac�vi�es of the company
NPI 20. Increase renewable energy share 302-1 Energy consump�on within the organiza�on Share of self-produced renewable energy in total Energy Use and
in total final energy consump�on to 10% 302-2 Energy consump�on outside of the organiza�on energy consumed Green House Gas
302-3 Energy Intensity
302-4 Reduc�on of energy consump�on
305-5 Reduc�on of GHG Emission
SDG NPI 21 Increase annual growth rate of GDP 201-1 Direct economic value generated and distributed N/A Compensa�on
8 to 10% 401-2 Benefits provided to full-�me employees that are Labor and Workplace
not provided to temporary or part-�me Performance Management for
employees the Value Chain
NPI 22 Reduce unemployment rate below 103-2 Management approach and its component Number of full-�me jobs created in the company Hours of work
3% 103-3 Evalua�on of management approach Number of part-�me jobs created in the company Worker Treatment and
203-2 Significant indirect economic impacts Number of jobs created within the supply chain of Development
204-1 Propor�on of spending on local suppliers the company due to ac�vi�es of the company
401-2 Benefits provided to full-�me employees that are
not provided to temporary or part-�me
401-1 employees
405-2 New employee hires and employee turnover
Ra�o of basic salary and remunera�on of women
to men
NPI 23 Reduce the propor�on of youth 102-8 Informa�on on employees and other workers Number of full-�me jobs created in the company Recruitment and Hiring
popula�on (15-29 years) not in educa�on, 103-2 Management approach and its component for youth
employment or training to 10% 401-1 New employee hires and employee turnover Number of part-�me jobs created in the company
for youth
Number of jobs created within the supply chain of
the company for youth due to ac�vi�es of the
company
SDG NPI 24 Ensure 100 percent pucca roads N/A N/A N/A
9 (suitable for all seasons)
NPI 25 Increase Industry (manufacturing) 201-1 Direct economic value generated and distributed N/A Community Impact
value added as a propor�on of GDP to
35%
NPI 26 Increase manufacturing 401-1 New employee hires and employee turnover Investment (USD) in innova�on and R&D in Recruitment and Hiring
employment as a propor�on of total products/services for BoP
employment to 25%
NPI 27 Increase the number of 203-1 Infrastructure investments and services N/A
entrepreneurs ten �mes in the supported
Informa�on and Communica�on
Technology sector
SDG NPI 31. Ensure 100% industries install and 103-2 The Management Approach and Its Component Amount of waste reduc�ons achieved in the Environmental Management
12 operate waste management system 103-3 Evalua�on of the Management Approach company System or Program
301-3 Reclaimed products and their packaging materials Amount of waste reduc�ons achieved in the Waste Management
306-2 Waste by type and disposal method country due to waste management/recycling Chemical Management
306-4 Transport of hazardous waste services provided by the company
306-3 Significant Spills
306-1 Water discharge by quality and des�na�on
SDG NPI 32 Reduce the number of deaths, 201-2 Financial implica�ons and other risks and Number of deaths and missing cases avoided due N/A
13 missing persons and directly affected opportuni�es due to climate cha to ac�vi�es of the company
persons a�ributed to disasters to 1500 per

31
100,000 popula�on
CONTRIBUTING FACTORIES

1. Aboni Knitwear Ltd.

2. Ananta Group
3. AR Jeans Producer Ltd.
4. Asian Group
5. Best Shirts Ltd.
6. Blue Planet Fashionwear Ltd.
7. Capital Fashions Ltd.
8. Colors and Stitches Ltd.
9. Cute Dress Industry Ltd.
10. Denim Expert Ltd.
11. DIPTA Apparels Ltd.
12. Echotex Ltd.
13. Fabrica Knit Composite Ltd.
14. Fakhruddin Textile Mills Ltd.
15. Fakir Knitwears Ltd.
16. Fashion.Com Limited
17. Flamingo Fashions Ltd.
18. Garments Export Village Ltd.
19. HK-TG Garments Ltd.
20. Impress-Newtex Composite Textiles Ltd.
21. Interstoff Apparels Ltd.
22. Keilock Newage Bangladesh Ltd.
23. Knit Concern Ltd.
24. Mark Fashion Wear (Pvt). Ltd.
25. Mawna Fashions Ltd.
26. Meher Garments Ltd.
27. MG Niche Stitch Ltd.
28. Mohara Asian Apparels Ltd.
29. Needle Drop Ltd.
30. Newage Apparels Ltd.
31. Newage Garments Ltd.
32. Nippon Garment Industries Ltd.
33. Posh Garments Ltd.
34. Posmi Sweaters Ltd.
35. RAM Apparel Ltd.
36. Sea Blue Textile Ltd.
37. Snowtex Outerwear Ltd.
38. Softex Sweater Industries (Pvt) Ltd.
39. SQ Birichina Ltd.
40. SQ Celsius Ltd.
41. Subarna Garments Ltd.
42. Surma Garments Ltd.
43. Tarasima Apparels Ltd.
44. TRZ Garments Industry Ltd.
45. Urmi Garments Ltd.
46. Utah Knitting & Dyeing Ltd.
47. Viyellatex Ltd.

32