What Bangladesh can do to promote green business

Consumers in Western countries are more concerned than ever about the environmental footprint of the products they buy. This trend is also spreading across Asia, with more and more countries preparing for their impending middle-income status.

Businesses and enterprises can do more to reduce their carbon footprint and improve resource efficiency by reducing the material footprint in production and the supply chain.

Green growth and inclusive pro-poor growth are interdependent and are associated with green and inclusive business models. According to a Green Industry Analysis Report (2019) conducted in 60 countries, more than half of consumers are willing to pay extra for products and services as long as they are eco-friendly and green.

So let me ask you how many times have you heard the word ‘sustainable’ in the past year? Reports on global warming and waste management are taken more seriously than ever by the public.

Terms such as sustainable production, environmentally friendly, recycling, green product, organic product, etc., are also associated with the word “sustainability”. Many of these words have been used interchangeably by the media and by marketing.

A term that has been added to the vernacular along with the words mentioned above is “green business” or “sustainable business”. We hear more and more about how companies are trying to be greener (introducing new sustainable policies) and inclusive, sustainable or have started working towards becoming a “green/sustainable business”.

But what does it mean to be a green or sustainable company?

It means being an organization or business that tries to comply with environmentally friendly standards and policies. This means sustainable growth by undertaking green public investments; be resource efficient; be cleaner by trying to produce low-emission and less polluting products and services.

For example, the Cityscape Tower in Gulshan, Dhaka is the country’s first green commercial building. The tower is powered by its own solar panels on its roof, and it has a rainwater harvesting system, as well as sewerage and water treatment facilities and an air cooling system. ‘air.

A consumer goods producer can make their products greener by producing the goods from organic sources, packaging the products with biodegradable materials, and ensuring resource efficiency at every cycle of the supply chain.

There are many benefits to getting involved in operating a green business, ranging from social, economic, environmental, to ethical. There are many opportunities to start a green industry, from agriculture to energy to transport sectors, such as getting involved in promoting organic agricultural products like brown rice (dheki chhata chal) or pure mustard oil (ghani bhanga shorisha), etc., or in the transport industry by marketing or producing electric vehicles, railways and bicycles.

Using green bricks (made from clay and not burned) is another great option for getting into a green business.

A garment factory can create pieces of fabric designed to last longer and have production models that allow garments to be resold, repaired, or properly recycled as part of the circular economy. Using renewable energy and focusing on resource conservation is an essential way to become a green industry.

In addition, creating a sustainable garment industry by adopting the principle of 3Rs (reduce, reuse and recycle) and using fewer resources, especially water and energy, recycling waste paper and fabric, producing biogas and energy from solid waste and ensuring the safety and interest of people could be a great way to become a sustainable business.

What is happening at the political level?

On a policy level, there are many benefits to running a green business. Such as Bangladesh Bank’s Green Transformation Fund and Green Climate Fund (GCF) for private sector facilities.

The Government of Bangladesh has also issued various policy guidelines including but not limited to the Environment Conservation Act (ECA) of 1995, the Environment Conservation Rules (ECR) of 1997, Bangladesh Renewable Energy Policy 2008, Green Bank 2011, National Agriculture Policy 2018, SME Policy. 2019, Environmental Risk Management Guideline in 2011 and National Industry Policy in 2016.

Other related policies range from the National Sustainable Development Strategy, the 3Rs Policy and the Equator Principles for Financial Institutions. Global Reporting Initiative asks for seven indicators (economic, environmental, social, human rights, product responsibility, etc.) for Bangladesh to ensure sustainability.

Critics often report that green businesses are not very profitable. We must innovate a system by using locally sourced materials, involving local people, minimizing waste, promoting energy efficiency, improving resource productivity and placing an innovative system to make the company green and profitable.

Despite operating a “green business”, there are certain factors that need to be considered. For example, even restaurants with a sticker-like green label – using metal cutlery and ceramic plates instead of plastic, serving vegan burgers – can still leave a significant carbon footprint.

It is important to consider what is done with leftover food. If it’s still thrown away like any other restaurant, then it’s doing the public a disservice by being a green business.

There are ways to convert waste into energy or manure. So, at all times, green businesses should try to be aware of all their actions and how they can conduct their business in the most sustainable way at every stage of their operations.

The number of companies trying to go green is increasing in Bangladesh. Under the Green Transformation Fund, interest rates will be charged to branches of Authorized Dealers (ADs) against financing at the six-month LIBOR rate plus 2.25%.

Looking Ahead: Green Solutions and Goals

Despite this and other challenges, there are many opportunities for the government to promote green businesses and increase the number of green industries through concessional financing and by setting up special trust funds and bonds (eg. example of green bonds, blue bonds, etc.).

For example, the threat of stricter legislation and the rising costs of complying with environmental regulations and penalties for non-compliance are possible motivating factors for companies to incorporate environmental concerns into their strategies.

A unified standard should be established on a policy-based structure, which will greatly help to see the green industry flourish at the national level. It would also be an encouraging idea to recognize industry players who have championed sustainable practices for their business. In addition, tax abatement facilities or concessional finance could also be provided to the green industry or business.

Private investors always want to apply a very short-term recovery period. Energy efficiency and solar projects generally take longer to set up. In this case, a long-term debt mandate could be set up with private sector companies.

Foreign Direct Investments (FDI) like Multilateral Development Bank (MDB) Sovereign Wealth Funds are generally not interested in investing in small, decentralized projects located in geographically dispersed locations due to higher administrative and transactional costs, compared to investment in larger projects. The aggregation of several small projects under umbrella projects is therefore essential to access concessional financing from FDI or MDBs.

If the government can provide land and public services through eco-friendly economic zones or industrial zones, it would help increase the number of green industries or businesses across the country. This could also facilitate the establishment of an eco-industrial park. We should immediately conduct a comprehensive baseline study to promote green businesses and establish standards for organic food.

Finally, if the government initiates a duty-free system for the import of environment-friendly machinery, technology, equipment and goods for the establishment of export-oriented green factories, it can contribute to effectively facilitate the promotion of green SMEs.

Bangladesh is getting greener and greener over time. Over time, the challenges mentioned above will hopefully disappear. This is just the beginning and there are many more aspects to running a green and inclusive business.

So the first step is simply to take a step in the right direction to promote green and inclusive businesses for people, planet and prosperity.


Arif M Faisal / Program Specialist, UNDP. Illustration: TBS

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Arif M Faisal / Program Specialist, UNDP. Illustration: TBS

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