What Bangladesh can do to promote green businesses 

Consumers in western countries are concerned now more than ever before about the environmental footprint of the products they buy. This trend is also becoming prevalent in Asia with more countries gearing up for their imminent middle income status.

Companies and corporate businesses can do more to reduce their carbon footprint and enhance resource efficiency through reducing material footprint in production and supply chain. 

Green growth and pro-poor inclusive growth are interlinked 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' throughout this past year? Reports of global warming and waste management are being taken seriously by the public more than ever before. 

Terms such as sustainable production, eco-friendly, recycling, green product, organic product, etc, are also thrown into the mix with the word "sustainability." A lot of these words have been used interchangeably by the media and through marketing.

A term that has been added to the vernacular along with the words mentioned above is "green business" or "sustainable business". We are hearing more and more now about how businesses are trying to be greener (introduce new sustainable policies) and inclusive, sustainable or have started working to become a "green/sustainable business."

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

It means being an organisation or company that tries to comply with environmentally friendly standards and policies. It means sustainable growth by undertaking green public investments; being resource efficient; being cleaner by trying to produce low emissions 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 rooftop, and it is enabled with a rainwater harvesting system, along with sewerage and water treatment plants and an air-cooling system. 

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

There are many benefits to being involved in operating a green business, ranging from social, economic, environmental to ethical. There are many scopes to starting a green industry from agriculture to energy to transport sectors such as getting involved in promotion of 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 cycling. 

Another great option to jumpstart getting involved in green business is the use of green bricks (made out of clay and not burned). 

A garments factory can create pieces of cloth that are 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 concentrating on resource conservation is a vital way of becoming a green industry.

Moreover, making a sustainable garments industry by adopting 3R (reducing, re-using and recycling) principle and using less resources, particularly water and energy, recycling of paper and cloth waste, producing biogas and energy from solid waste and ensuring safety and interest of workers could be a great way of becoming a sustainable business. 

What is happening at the policy level? 

At a policy level, there are many benefits to operating a green business. Such as the Green Transformation Fund under Bangladesh Bank and the Green Climate Fund (GCF) for private sector facilities. 

Bangladesh government also issued various policy guidelines including, but not limited to, Environment Conservation Act (ECA) 1995, Environment Conservation Rules (ECR) 1997, Renewable Energy Policy of Bangladesh in 2008, Green Banking in 2011, National Agricultural 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, 3R Policy and Equator Principles for financial institutes. Global Reporting Initiative requests seven indicators (economic, environment, social, human right, products responsibility, etc) for Bangladesh to ensure sustainability.

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

Despite operating a 'green business,' some factors need to be considered. For instance, even restaurants with a green sticker-like 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 being done to the leftover food. If it is still being discarded just like any other restaurant, then it is not really doing the public a service by being a green business. 

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

The number of businesses trying to go green is on the rise in Bangladesh. Under the Green Transformation Fund, interest rates will be charged to the authorised dealer (AD) branches against financing at the rate of six-month LIBOR plus 2.25%. 

Looking forward: solutions and green goals

Despite this and other challenges, there are many possibilities 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 (e.g. green bonds, blue bonds, etc). 

Such as, the threat of tougher legislation and the rising costs of complying with environmental regulations and penalties in case of noncompliance are possible motivating factors for firms to incorporate environmental concerns in their strategies. 

A unified standard should be established on a policy-based structure, which will greatly help  in seeing the green industry flourish at a national level. It would also be an encouraging idea to give recognition to industry players that have championed sustainable practices for their business. Also, tax abatement facilities or concessional finances could also be provided to green industry or enterprise.

Private investors always want to apply a very short-term payback period. Energy efficiency and solar projects usually take a longer time to establish. In this case, a long-term debt tenure could be set up with private sector firms. 

Foreign Direct Investments (FDI) like the sovereign funds from Multilateral Development Bank (MDB) are usually not interested in investing in small, decentralised, projects located at geographically dispersed places because of higher administrative and transactional costs, compared to investing in larger projects. Aggregating several small projects under umbrella projects is therefore critical for accessing concessional finance from FDI or MDB. 

If the government can provide land and utility services through economic zones or eco-friendly industrial zones, this would help in increasing the number of green industries or enterprises around the country. This could also facilitate the setup of an eco-industrial park. We should immediately conduct a comprehensive baseline study for promoting green business and set standards for organic food.

Lastly, if the government initiates a duty-free scheme for the import of environmentally friendly machinery, technology and equipment and goods for setting up export-oriented green factories, this can help facilitate promotion of green SMEs effectively. 

Bangladesh is becoming more and more green-savvy as time passes. In time, the challenges mentioned above will hopefully disappear. This is only the beginning and there remain many other aspects to operating a green and inclusive business. 

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

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