LightCastle Editorial Wing
International Circular Economy Policy Trends
The global fast fashion industry, a cornerstone of Bangladesh’s economic progress, is highly resource intensive and contributes significantly to waste generation. Bangladesh has experienced significant economic advancements over the last decades. At the forefront of this economic progress has been the textile and ready-made garment (RMG) industry, employing more than 4 million individuals and constituting over 80% of the country’s total exports.
With its substantial workforce and contributions to the nation’s GDP and export revenue, this industry holds a crucial position in shaping Bangladesh’s economic landscape. The fast-fashion industry, however, has a high-embodied energy and natural resource consuming processes, contributing considerably to high post-production and consumption waste streams.
As the fashion industry’s sustainability crisis is accelerating, governments around the world are taking policy action to enable the necessary shift from linear to circular economic models in the textile industry, addressing environmental and social challenges while enhancing competitiveness. Several nations are leading this transformative transition including EU, USA and Canada.
In addition to policy changes, public sentiment and preferences are shifting, concurrently spurred by both consumers and industry employees. The rapidly evolving regulatory pressures are forcing brands and manufacturers to take ambitious steps on circularity. Leading global brands, including H&M, Adidas, and Chanel, are embracing recycled fabrics and setting ambitious sustainability goals.
Investors now prioritize environmental factors, with recent funding deals highlighting potential cost-of-capital benefits tied to improved Economic, Social, and Governance (ESG) performance. CEOs and CFOs, in both public and private sectors, face increasing pressure to demonstrate a strong commitment to addressing environmental and social impact to meet investor expectations.
The global shift to responsible consumption and a circular textile economy will bring about significant changes in the way global value chains and trade between countries and regions are conducted. These developments will likely have direct implications for Bangladesh’s RMG manufacturers and exporters of textile products to the EU.
Legislations for selling sustainable products in the EU market, with circular design and recycled material usage, would apply to the Bangladesh RMG sector and will complicate market access to the European market if the issues are not addressed in a timely manner.
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