Circular Economy in Bangladesh’s Apparel Industry (CREATE)

Project summary

The global system of production and consumption of clothing accounts for approximately 4 to 6% of global GHG emissions, equivalent to international flights and maritime shipping combined, and contributes 20% of industrial water pollution. The global fashion industry must move from the linear take-make-waste system to a circular system to design out waste and pollution, keep products and materials in use, avoid the use of non-renewable resources and preserves renewable ones. As global fashion brands are moving towards circular business models this poses questions about how apparel global value chains will change and affect the suppliers in the global South, e.g. Bangladesh. Global buyers’ shift to circular economy model will significantly affect Bangladesh due to the new demands and standards necessary for circular production. While the large Bangladeshi apparel firms have upgraded over the past ten years, the smaller firms constituting the majority of the industry have not made these investments, producing basic products with high downward pressure on prices. Bangladesh’s apparel industry will face significant challenge, as its preferential trade access to the EU will end as it shifts to a middle-income country and buyers sourcing strategies emphasize sustainable production and shorter delivery times. Circularity, therefore, offers an opportunity for the Bangladeshi industry to capture more value from its apparel exports and create more linkages between the apparel industry and the broader economy through waste management, recycling and innovations. CREATE project asks how Bangladesh’s apparel industry can implement circularity to retain its position in reconfigured apparel GVCs as well as drive green industrialization. Adopting a multi-scalar approach this project explains the drivers and obstacles to building a circular apparel industry: (1) apparel supplier firms’ capabilities and business strategy; (2) buyer-supplier relations; (3) ecosystem at the industry and national economic levels. An examination of these will indicate what kinds of government policy incentives and regulations are necessary to catalyse and coordinate firm investments to achieve a circular apparel industry. A circular apparel industry cannot be created through individual firm action alone, as the success of one firm’s circular model and investments depend on complimentary investments by other firms and on collective infrastructure and services at the industry and national level.