Bangladesh Garments Manufacturer and Exporter Association (BGMEA) 2020 Sustainability Report

The full report is available HERE

Key findings:

The ready-made garment industry (RMG) is critical to Bangladesh economically. In 2018, RMG accounted for 84% of the country’s total exports and 11% of Bangladesh’s gross domestic product (GDP). The RMG industry supports about 4.1 million workers (including 65% female) in Bangladesh directly and additional 40 million workers through backward and forward linkage industries. North America and Europe are the two major destinations of RMG exports from Bangladesh.

Led by BGMEA, the Bangladeshi RMG industry has made efforts to improve in its social responsibility and environmental sustainability practices.

  • Specific initiatives include regularly monitoring workplace safety & compliance, providing social standards training for factories, offering guidance for sustainable use of natural resources and green buildings, and improving workers’ various benefits (such as fair wage, skill development, gender equality and better working condition).
  • The gender wage gap in Bangladesh was 2.2%, much lower than the 21.2% of the world average.
  • The Bangladeshi RMG industry has also made efforts to promote freedom of association and collective bargaining, an important aspect of human rights for workers defined by the International Labor Organization (ILO).  The number of trade unions in the RMG industry has increased from 138 in 2012 to around 800 in 2020.

The Bangladeshi RMG industry still faces several major challenges that need to be addressed. For example:

  • A lack of skilled labor force and skill development opportunities. In some cases, the RMG factory owners have to pay more costs than they assume due to the fact that unskilled workers need more working hours than skilled workers.
  • Pressure from competition and production cost. While RMG factories have to spend more on remediation and compliance investment, they are facing a declining selling price of their products. As a result, factories are struggling to maintain their social and environmental compliance while sustaining the business.
  • Looking into the future, international buyers sourcing apparel from Bangladesh care most about the country’s safe working conditions, fair wages to the workers, no use of forced or child labor, social and environmental sustainability, and good business environment. In comparison, workers in the Bangladeshi garment industry care most about fair wages, bonuses on due time, a safe working environment, overtime, and job security.

Summarzied by Hailey Levin

Author: Sheng Lu

Professor @ University of Delaware

24 thoughts on “Bangladesh Garments Manufacturer and Exporter Association (BGMEA) 2020 Sustainability Report”

  1. Bangladesh has been a ready-made garment sourcing destination for years, but drew attention to themselves with the tragedy of Rana Plaza. With low production costs for apparel manufacturing, Bangladesh has faced criticism for the conditions in which these products are made. Low wages, unethical treatment of workers, dangerous working conditions, and little effort to use sustainable practices, are just some of the dangers of the Bangladesh apparel industry. However, this industry has been beneficial to the countries overall economic growth and accounts for much of the GDP. The industry faces challenges in terms of technology and innovation, but could continue to grow into a sourcing destination if the above practices are decreased.

  2. This sustainability report portrays the efforts that the Bangladeshi RMG industry has made to better social responsibility and environmental sustainability practices. Bangladesh’s economy relies heavily on the RMG industry but has had a very controversial past for its working conditions. The conditions of Bangladesh’s RMG industry have been closely monitored since the occurrence of the Rana Plaza catastrophe. Although there are efforts to improve its social responsibility and environmental sustainability practices, Bangladesh’s RMG industry still faces many issues and there is still much to improve.

  3. Bangladesh as a growing exporter for ready to wear garments has made major headlines in the past decade due to unfortunate events such as the Rana Plaza catastrophe. Since then, things such as other dangerous work conditions and unfair pay and labor environments have been made more public. From the sustainability report, it really looks like the Bangladesh RMG industry is making a real effort to make changes that fall in line with what we would view as basic human rights. The fact that the wage gap is so low is less of a testament to the level of the progressive construct but rather shows how many women rely on being employed by the Bangladesh RMG industry. One of the issues that jumped out at me was “A lack of skilled labor force and skill development opportunities”. I remember pondering this issue earlier in the semester when we were talking about the effects COVID is having and will have on the state of globalization. If Bangladesh has to allocate a lot of its resources to increasing the skillset of its workers, then they’re going to suffer even more with trying to remain a competitive apparel exporter. It’s Bangladesh’s cheap and quick production that keeps the country in business with big countries like the US and other places like the EU since there are no FTA’s between the two regions that provide more incentive to being in business with them.

  4. This blog post highlights a lot of important aspects of the Bangladesh garment industry. After being aware of the issues that have occurred in Bangladesh garment factories, such as the Rana Plaza incident, it is important for critical changes to be made. We know that Bangladesh has faced issues within their garment industry, such as low wages, little protection of workers, structural issues within working buildings, etc.. This blog post states that there are new efforts being made in the Bangladesh garment industry to help fix such problems, including regular monitoring of workplace safety and improvement of workers benefits, like fair wage in better working conditions. This information is extremely important and notable because it gives us hope for more safe garment factories moving forward. However, Bangladesh garment factories do not have a lot of access to technology which indicates that the same work environment will remain for the garment factory workers. Knowing this information, there are still many challenges that must be taken care of in these working environments. This leaves questions like if factories will continue to maintain sustainable and ethical practices? Will the high demand of the ready made garments affect the efforts being made to improve the environment in these garment factories?

  5. The report highlights the change that BGMEA, the Bangladeshi RMG industry has made in order to improve social responsibility and environmental sustainability practices, especially after the collapse of rana plaza. Included in this report are specific “initiatives include regularly monitoring workplace safety & compliance, providing social standards training for factories, offering guidance for sustainable use of natural resources and green buildings, and improving workers’ various benefits (such as fair wage, skill development, gender equality and better working condition).” While these are all great modes of making change, little are possible given the low waged developing country that Bangladesh is, and not to mention, little to no access to technological advances or reconstruction of buildings/factories. It’s a tough way to peer into the industry and see it for what it is.

  6. This article highlights the efforts made by the Bangladesh RMG industry in order to improve the social responsibility and environmental practices. In my opinion, I think it is great that the Bangladesh RMG industry is working on issues such as monitoring the workplace for safety, ensuring human rights, or improving workers benefits. However, as it is mentioned the pressure from the fashion companies or brands for producing products at lower cost is also a huge issue which leads to the unsafe working environment. Although some efforts were made, I think it is not enough and all the countries should cooperate together to solve those issues faster. There are still a large number of people risking their life to make garments which can be worn for only a short period in developed countries. I think all the consumers should be aware of the situation and everyone should be responsible for their life in Bangladesh.

  7. It is no surprise to hear the RWG account for so much of Bangladesh’s exports and overall GDP. As a developing country, it is important for them to stick to making labor intensive items such as apparel since it is easy for them to make money from it. I am pleased to hear that they are working on having high social responsibility within the apparel workforce as this is something that has been of concern in the past. I think that it is important to monitor workplace safety as manufacturing in third world countries can sometimes not be held to as high of a standard as other places. I was surprised to hear that the wage gap between genders was so low but still it is of concern that it is not equal. Giving workers and companies more knowledge on sustainable practices can better both our planet and consumers alike. By using more sustainable practices they may also be able to offer a high price when exporting garments to places like the US. One of the main concerns to watch out for is the pressure that factories in Bangladesh may feel from competition and production costs. Sustainable efforts often get abandoned because factories face too much pressure to turn out enough products on time at the lowest price possible. Nations need to work together in order to achieve a low cost while also keeping in mind sustainability efforts.

  8. This blog highlights how important the garment industry is to Bangladesh, but how harmful it can be with their unfortunate tragedy of Rana Plaza. In this report they discuss how the industry is doing their best to change their ways and become more sustainable socially and environmentally. They still face the difficulty of improving low wages, closing the gender wage gap and working conditions because of pressure from competition and lack of skilled labor. However, there have been steps to improvement, as they do not want another horrible tragedy on their hands. There is still a lot that needs to be done, but it looks as though it is heading in a positive direction. I think this tragedy and article should not only be a wakeup call for Bangladesh, but the brands and consumers buying from them. The RMG is making efforts to improve, however it is important for brands and consumers to support these changes to make a more sustainable future for all.

  9. I was very aware of the fact that the ready-made garment industry (RMG) was extremely important to Bangladesh’s economy, however I was still very surprised seeing the 2018 statistics of their exports and percent total of GDP. It is great to see that Bangladesh is involved in the global T&A industry and is able to use it to their advantage in order to encourage some level of economic growth. My immediate thought was remembering how Bangladesh is not a part of the RCEP and, although North American and Europe are its two major destinations for RMG exports, how this will affect their competition and other export markets. Countries like Vietnam are slowly emerging as textile producers and are competitors for Bangladeshi manufacturers. How will the RCEP change those relationships that Bangladesh has with major export markets like China, Japan, etc.? (I am unsure how much Bangladesh’s RMG accounts for of these countries’ total imports).

    I think it is exciting to finally see the Bangladeshi RMG industry making efforts to improve their social responsibility/environmental sustainability practices. I think it may take some time before it is “clean” in its entirety, but it is a great step forward in the right direction. One of the challenges addressed was the “pressure from competition and production cost,” but how will the decline in fast fashion (in the US at least) affect this? Will the US move towards more domestic production and import less? Will manufacturers finally be given a reasonable amount of time to produce and money for their work? Will less orders give manufacturers time to improve their own practices and technology?

    1. Very interesting comment. Just want to add that apparel export is a highly competitive business. While many NGOs ask for higher payment to garment workers, the rule of demand and supply still applies.

  10. This post is an excellent description of the improvement of the Bangladeshi RMG industry after they experienced the Rana Plaza tragedy. After the disaster, global fashion companies, brands, even consumers, and media all attached importance to the workers’ working conditions and industries’ safety, especially for the industries in the developing countries. As the post concluded, the Bangladeshi RMG industry had made efforts to improve its social responsibility and environmental sustainability practices. Also, human rights were much focused on too. However, although fashion brands, the Bangladeshi government, and relevant organizations tried to solve problems that led to the Rana Plaza tragedy, challenges are still surviving. Based on what Hailey Levin mentioned in the post, I thought the most key points are fashion brands, and companies pursue the lowest cost, lowest labor cost. At the same time, workers in the apparel industries need higher money to support their life. Thus, it is not sufficient for fashion brands and companies to only supervise or check the industries. They should take action to create a more sustainable supply chain and have responsibility for the workers and the industries to relieve price pressures.

    1. This sustainability report was refreshing to examine. It talks about steps that Bangladesh is taking in sustainability and accountability for its garment workers. These initiatives include monitoring workplaces to ensure safe working conditions, creating training standards in factories, offering support for use of natural resources, and improving worker’s benefits’. Although these are big steps in the right direction, it has been noted that there are still ongoing issues. These include lack of a skilled workforce and pressure for low production costs. I think the reason these issues are ongoing is due to the strict financial limitations these factories are given. If there was less of a pressure for the lowest possible production costs, there would be time and money allocated to training and safety within the factories. I think that in the future there will be a trend where companies allocate resources and money to ensure more sustainable and ethical practices. There is an increasing demand from consumers for ethically responsible fashion, and I hope this trend continues.

  11. Social responsibility is an important aspect when looking into garment factories. The blog post states how North America and Europe are the biggest buyers of RGM merchandise from Bangladesh. Although the production of RGM products in Bangladesh accounts for a large amount of the country’s GDP, there is often pressure from more developed countries that cause oversight of safety regulations. We can learn from the Rana Plaza tragedy by accepting more social responsibility. More developed countries must do this in order to ensure safe work environments for the workers they source from. The blog post stated how BGMEA is taking more steps in order to improve working conditions, this is important because in order to keep RMG as a major source of Bangladesh’s GDP, the Bangladeshi industry must also do their part to improve aspects like gender equity, wage, and working conditions.

  12. This blog post perfectly summarizes the initiatives taken by the fashion industry to improve the lives of factory workers in Bangladesh. This is such an important time (and something that should have happened long ago) for the industry to take charge and move forward toward a more socially sustainable way of production. Seeing that workers benefits such as fair wage, skill development, gender equality and better working conditions are being handled correctly by BGMEA is very uplifting and encouraging. There is still lots of work to be done but things are headed in the right direction!

  13. The article shows the example of increased cost as a result of worker safety and training. It sets an appropriate direction for the fashion industry that the profits within the industry should not come at the expense of the workers and their families. This story is one that presents a positive result and shows the realities of costs and cost pressure. It also shows the reality and the challenge that Bangladesh will need to monitor between productivity, worker safety, and the building of skills in the country to support the industry.

  14. This article and sustainability has a lot of great information to what the industry in Bangladesh has done to improve the working conditions of factories. The textile and clothing industry is very important in providing a single source of growth in Bangladesh’s rapidly developing economy. Not only does it provide jobs but exports of textiles and garments are the main source of foreign exchange earnings. What this article pinpoints on is how we are headed in the right direction although there still is a lot of work to be done.

  15. Bangladeshi garment manufacturers have struggled to uphold a balance between competitiveness while maintaining social responsibility and having sustainable environmental practices and we see that with past events such as the Rana Plaza collapse. When western fashion brands haggle prices to unreasonably low costs, it is hard for manufacturers to fight back because there are so many other manufacturers who would take the job for that cost. This plays a huge role as to why it has been so hard for bangladesh to keep a balance between competitiveness and social responsibility and good environmental practices. It was refreshing to see that change has been done since the Rana Plaza collapse and although they are still improving, it’s the start of a future with better labor and environmental practices.

  16. Hi Hailey! Very well written summary! I believe that out of all of the issues, one of the biggest they face right now is pressure from competition and production cost. I think so many sustainability issues come out of this problem. Horrific incidents such as Rana Plaza occur when companies are trying to produce at the lowest cost so building owners may cut corners and not care about safety in order to match their competition. We see other companies like Amazon also have no problem using factories that are not up to code, and companies need to change this pattern in order to move towards a safer and more sustainable environment.

  17. It is really refreshing to see the changes the Bangladesh RMG industry has made in 2020. As Americans, it is so important to not only look at the environmental and socially responsible impact of our country but also of the places we import from. As consumers, we have a responsibility of making a conscious effort to make sustainable purchases. Through this report we have seen how Bangladesh has improved many previous issues however, there is still a lot to be done. With the pressure to compete with other countries in the prices of production, it is stated in the article that it is hard to remain competitive while also remaining socially and environmentally sustainable.

  18. Bangladesh has a history of unsafe working conditions, cheap labor, and a lack of skill in the labor force, especially noted during the Rana Plaza tragedy where many factory workers were killed. After the incident, companies still wanted to use Bangladesh as a sourced vendor as it has cheaper costs, but they wanted to improve its conditions as well. While this seems like a good idea, companies need to put money into more training for their employees and better working conditions, where the cost at this point may even out with other suppliers such as China or Vietnam. So the question is, is it even worth it to use Bangladesh as a supplier if it means spending the same amount of money? It could be in the long-run, but for now companies would have to spend money to help Bangladesh’s manufacturing.

  19. Following the Rana Plaza tragedy, the reality of the Bangladesh garment industry was further exposed. This post focused on the importance of the industry to Bangladesh but also the harm that it causes. Through several posts on this blog, we have seen how the garment industry has employed a majority of Bangladesh. Despite providing an income for employees, the working conditions are dangerous. In the report, it details how Bangladesh is working to improve their sustainability and environmental practices. While I do credit Bangladesh’s effort, there is still plenty of work to be done in regards to gender wage gaps, workplace safety and enforcing stronger labor laws. Additionally, we as consumers also effect the sustainability of the fashion industry. As American consumers, we are responsible for identifying the environmental conditions of the places that our clothing is sourced from. Hopefully Bangladesh will continue to make sustainable efforts in order to maintain their strongest source in their economy-the textile and apparel industry.

  20. This article describes the actions being taken by Bangladesh RMG to improve social responsibility and sustainability. After the incident at Rana PLaza, more consumers concerned about the wages and social responsibilities in Bangladesh. The majority of employees in the apparel industry in Bangladesh are female and children, and their welfare needs support from international organizations and local governments to be guaranteed. In the face of unskilled workers, I think RMG should pay labor salaries differently to reduce unreasonable expenditures. At the same time, it also ensures that skilled workers have fair wages.

  21. I am surprised to see the Bangladeshi government attempt to create social sustainability and environmental sustainability in Bangladesh, based on the actions after the Rana Plaza Tragedy where little to no adjustments were made. While I think the efforts are great, there is still a long way to go to reach the social standards in the US. In addition, a fear that I have is for the government to revert back to previous practices when they don’t receive the same economic boost. By implementing new rules and standards, wages for individuals will most likely increase, and/or the cost of production will increase to follow environmental protocols, ultimately costing brands more to use the factories in the country. This will cause Bangladesh to lose its comparative advantage of cheap labor and production.

  22. After analyzing the Rana Plaza tragedy in many courses throughout my time at UD, I have been concerned for the manufacturing industry in Bangladesh. However, after reading this report it is clear that Bangladesh is working towards a more safe and fair ready-made garment industry (RMG). Since RMG accounts for a substantial amount of the country’s GDP, it is imperative that the workers within this sector are taken care of. Social responsibility and environmental sustainability is important to many Western consumers, and I believe that it is largely because of their demand for supply chain transparency that Bangladesh is willing to take these actions. Along with this, I believe that Bangladesh knows that the world is watching for any missteps since the Rana Plaza tragedy. I find it hopeful that Bangladesh is willing to publish this sustainability report, however, there is always improvement to be made and I hope that the country prioritizes ethical business practices above all else.

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