The Bangladesh Garment Manufacturers and Exporters Association (BGMEA) plans to make environmental, social, and governance (ESG) reporting mandatory for all its member factories to help garment exporters meet growing sustainability requirements in international markets, particularly the European Union.
"We will make ESG reporting mandatory for all our member factories," BGMEA President Mahmud Hasan Khan Babu said at the launch of the association's ESG Dashboard at its headquarters in Uttara yesterday (19 October).
Of the association's around 2,500 active members, only 326 factories have submitted ESG reports, accounting for about 13% of the total, he said, adding that the number was not satisfactory.
"We need to make our factories more compliant and data-driven to meet changing global market demands and address future challenges in the sustainable apparel sector," he said.
The association would work with the Bangladesh Knitwear Manufacturers and Exporters Association to ensure proper ESG reporting, he added.
The BGMEA launched the dashboard in collaboration with the Danish Embassy in Dhaka, the BRAC Institute of Governance and Development, and Mapped in Bangladesh.
Rashed Al Mahmud Titumir, adviser to the prime minister on finance and planning, attended the event, along with industry experts, diplomats and business leaders.
EU requirements drive urgency
Sheikh Mustafiz, a BGMEA director overseeing the ESG platform, told TBS that from 2029, buyers would have to provide ESG-related reports on their supply chains to EU countries.
"As buyers collect these reports from Bangladeshi suppliers, we have to prepare ourselves," he said.
Although factories publish ESG reports annually, they need to collect and maintain relevant data daily, he added. Factories will submit their reports to BGMEA, which will monitor their progress.
The BGMEA president did not specify when the reporting requirement would take effect.
ESG reporting assesses how responsibly a company operates and manages sustainability risks.
Environmental indicators include energy consumption, greenhouse gas emissions, water management, and waste treatment. Social indicators cover wages, workplace safety, working hours, gender equality, and workers' rights, while governance focuses on transparency, accountability, and ethical business practices.
For Bangladesh's garment industry, stronger ESG performance could help retain international buyers, improve working conditions and strengthen competitiveness as global supply chains face growing scrutiny over sustainability.
According to the Export Promotion Bureau, garment exports generated more than $39 billion in FY26, accounting for over 80% of the country's export earnings.
BGMEA has also set a target of sourcing 30% of the energy consumed in garment production from renewable sources.
Small factories face implementation challenges
In his keynote presentation, Dr M Masrur Reaz, chairman and chief executive officer of Policy Exchange Bangladesh, said moving beyond conventional compliance towards sustainability was essential for long-term development.
A strong export base was crucial to achieving Bangladesh's development goals, and the "ESG Data to Action" initiative could support long-term success, he said.
However, implementing ESG reporting could be challenging, particularly for smaller factories with limited resources, Reaz suspected.
Titumir stressed the need to ensure their participation, saying small-scale factories should not be overlooked.
Danish Ambassador to Bangladesh Christian Brix Møller said Bangladesh could no longer compete on cost alone.
"Sustainability, transparency, and compliance with international standards are essential to maintaining market access and strengthening long-term competitiveness," he said.
Initiatives such as the ESG Dashboard could make a difference as global market requirements change, he added.