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Pakistan’s textile sector adopts ESG concepts for long-term sustainability

by Haroon Amin
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As international markets, especially those in Europe and the US, increase their scrutiny of imports, Pakistan’s textile sector is radically changing and setting new benchmarks for sustainability. With customers and regulators demanding adherence to better standards across the whole value chain, environmental, social, and governance (ESG) considerations have taken on a paramount importance.

  • Sustainable tactics throughout the whole value chain:

A renewed dedication to ESG principles has resulted in a sharp increase in Pakistan’s textile exports to the US and Europe. Sustainable practices are increasingly highly valued in these markets, and Pakistan’s exports may be at risk if its exports don’t satisfy their strict requirements. Pakistan has taken aggressive steps to align itself with global norms in order to protect its standing. This includes maintaining its Generalised System of Preferences (GSP) Plus status and setting itself up for future export developments.

Europe has taken the lead in enacting ESG laws that require adherence. Businesses that disregard ESG norms risk severe penalties, underscoring how important they are. But Pakistan has risen to the occasion, with businesses quickly complying with rules to guarantee continuous access to important markets.

In response to ESG demands, Pakistan’s textile sector, which is a vital component of the country’s economy, is experiencing a significant shift. Industry experts refute persistent misconceptions about sustainability measures, despite their perceived expense. Companies in Pakistan are demonstrating that ESG compliance can boost competitiveness rather than hinder it, taking cues from countries that have achieved success, such as Bangladesh.

  • The dynamics that propel sustainability:

The Pakistani Ministry of Commerce leads the charge on programmes to improve sustainability in the textile sector, working with foreign partners. These initiatives, which centre on labour rights, social standards, and environmental norms, seek to solve significant issues facing the industry while enhancing economic resilience and competitiveness.

However, efforts spearheaded by industry trailblazers like MG Apparel and other well-known textile firms like Yunus Textile Mills, Sarena Textiles, Crescent Bahümán Textiles, Crestex, Interloop, US Apparel and Textiles, and many more highlight Pakistan’s unwavering dedication to sustainability.

While large textile firms are spearheading these sustainability measures, the textile industry’s Micro, Small, and Medium Scale Enterprises (MSMEs) are realising how critical it is to boost competitive potential and improve working conditions. Pakistan’s textile sector is experiencing a considerable modernization process, with sustainable production being a key success factor. The reason for this is the increased need for sustainably manufactured textiles from foreign purchasers. In order to stay competitive and comply with international standards, MSMEs are increasing their sustainability goals and implementing Environmental, Social, and Governance (ESG) practices in light of Pakistan’s disaggregated Textile Value Chain (TVC) and severe compliance regulations that apply to the whole textile value chain.

  • External partners on the expedition:

The textile sector in Pakistan has received significant support from external entities such as TÜV Rheinland and WWF-Pakistan in its efforts towards sustainability. Initiatives like the EU Green Deal can be guided by programmes like GIZ’s TextILES, which helps enterprises in Pakistan comply with international standards for health and safety, hazardous chemical management, and Zero Discharge of Hazardous Chemicals (ZDHC).

  • Social, ethical, and environmental commitments:

The industry’s commitment to international norms is demonstrated by the way it integrates development operations with Vision 2050. Companies that embrace sustainable sourcing practices, renewable energy adoption, water stewardship, energy conservation, improving carbon sinks, and employee welfare show their long-term commitment to environmental sustainability and women’s empowerment. Organisations have obtained significant certifications, indicating a resolute dedication to environmental and social responsibility.

Actions and policies implemented by the government:

The Pakistani government has put in place a number of programmes to help the textile sector grow sustainably by utilising the finest ESG standards.

One significant initiative to increase textile exports, improve industry conformity with international ethical and environmental standards, and support national skill development and employment is the Textile and Apparel Policy 2020–2025. The goal of the policy is to establish Pakistan as a centre for sustainable sourcing worldwide by promoting investments in sustainable technologies, energy efficiency, and a circular economy.

  • Taking on obstacles and grasping opportunity:

The textile sector still faces difficulties in spite of a number of outstanding initiatives. Supply chains must disclose data on labour practices, environmental effect, and working conditions more frequently and with greater transparency. Implementing standards of behaviour, factory inspections, and worker empowerment initiatives are all necessary components of this sector’s transparency efforts.

  • Consumer patterns and the dynamics of the market:

Amidst changing global dynamics, Pakistan’s textile sector is gaining recognition as a cost-effective labour source and is experiencing a renaissance driven by reforms. Pakistan’s advantage in efficiently completing lower order volumes has been apparent as consumer trends favour them, and the necessity for industry players to adapt is further highlighted by sustainability imperatives and ESG compliance. The sector is made more appealing by initiatives that support worker welfare and gender inclusion, which positions it for long-term growth and competitiveness in global markets.

  • Governance and transparency measures:

Transparency across the textile business depends on supply chain visibility. This entails tracking the origin of raw materials, keeping an eye on the production process, and tracking the final product’s distribution.

  • Collaboration within the Industry:

Through active involvement in international commerce and textile events/exhibitions as Heimtextil 2024, Pakistan’s textile sector is pushing further on its ESG journey. Under the leadership of the Trade Development Authority of Pakistan (TDAP), the sector highlights innovation and sustainable production, as exemplified by prestigious companies such as Lucky Textile Mills and Sadaqat Limited.

In conclusion

Global markets are prioritising sustainability more and more, and Pakistan’s textile industry is adjusting to stay competitive. Encouraging sustainable practices throughout the value chain requires initiatives to improve ESG compliance and support from non-governmental and governmental organisations.

Pakistan’s textile sector is securing its place in global markets and making a long-term positive impact on the environment and society by adopting sustainability as a strategic objective.

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