High costs and technical challenges hinder sustainable water management
The government has a crucial role to play by supporting planned industrial zoning, investing in shared wastewater infrastructure such as CETPs, offering fiscal incentives for water-efficient technologies.
Sustainable water management is critical for Bangladesh's apparel industry, particularly because we are deeply embedded in global supply chains. Most of our wet processing units (dyeing, washing, finishing) are located in Dhaka, Gazipur, and Narayanganj. The groundwater levels in these areas drop by 2-3 meters annually.
If we don't manage water sustainably, factories will eventually face forced closures due to a lack of water availability, not just regulation. Additionally, major brands (eg, H&M, Inditex, Uniqlo) have committed to global water stewardship goals. If a factory cannot demonstrate water efficiency, it loses business. As groundwater becomes harder to extract, the energy cost to pump water rises. Also, the cost of treating wastewater (ETP operation) is significant. Reducing water consumption directly reduces the cost of chemicals and energy used to treat that water.
For Bangladesh, which relies heavily on groundwater extraction for industrial use, unsustainable water practices create long-term risks for both industry and surrounding communities. Therefore, water stewardship is not only an environmental concern, but a matter of industrial resilience and export competitiveness.
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However, compared to a decade ago, there has been a significant transformation. Many factories now operate modern Effluent Treatment Plants (ETPs), adopt water-efficient machinery, implement rainwater harvesting, and use chemical management frameworks aligned with ZDHC. Bangladesh now hosts the largest number of LEED-certified garment factories globally, many of which demonstrate best-in-class water stewardship.
Ten years ago, the industry relied on high liquor ratios (1:80 or 1:100 – meaning 100 liters of water for 1kg of fabric). Today, modern dyeing machines have brought this down to 1:5 or 1:4.
In denim, many factories have moved from wet washing to laser finishing and ozone treatments, which use almost zero water. Many factories have also inverted in rainwater harvesting. It has moved from a "nice-to-have" feature to a standard installation in new factories, covering non-process water needs (cleaning, gardening, toilets). Factories reusing their effluent from ETPs for landscaping and toilet flushing has also become much more common in the industry.
The larger group of companies with vertically integrated factories are leading these improvements. Their progress has largely been driven by their own initiatives to remain competitive, their ability to invest capital and easier access to finance, and technical support from brands, consultants, and development partners.
But, one of the major challenges is the Small and Medium Enterprises (SMEs), Tier-2 dyeing units, and subcontracting washing plants, particularly those operating in older industrial zones (like parts of Konabari or Narayanganj) are the ones lagging behind. Lack of space, financing and other bureaucratic red tapes often work as challenges for the SMEs. Modern biological ETPs and recycling plants require a significant physical footprint. Older factories literally do not have the land to install them.
However, most importantly, small factories struggle with the high Capital Expenditure (CapEx) of imported water-saving machinery. They continue running inefficient machines because they cannot afford the upgrade. On top of that, access to finance for SMEs has always remained a challenge, where they have struggled to meet the criterion for green financing.
The government has a crucial role to play by supporting planned industrial zoning, investing in shared wastewater infrastructure such as CETPs, offering fiscal incentives for water-efficient technologies, and ensuring predictable and transparent regulatory enforcement.
This gap is not primarily due to unwillingness, but rather capacity and resource constraints. BGMEA is advocating for a "Cluster Approach" where central ETPs (CETP) can serve multiple small factories in a specific zone, reducing individual costs. We are also working with institutions like the World Bank 2030 Water Resource Group to promote water reuse and recycling in the industry.
On the other hand, implementing the Digital Product Passport (DPP) into the industry may be a technical data challenge for Bangladesh. While our top-tier factories have digital flow meters and real-time monitoring, the vast majority of the industry still records water data manually or in aggregate (monthly totals). The DPP requires batch-level traceability (eg, "How much water was used for this specific lot of 5,000 shirts?"). The industry needs to transition from manual logbooks to IoT (Internet of Things) sensors that feed data directly into a blockchain or digital ledger.
BGMEA views this as a necessary barrier to entry. If we master this, we differentiate ourselves from competitors like Pakistan or Cambodia who may struggle more with digital infrastructure. Bangladesh is already the most transparent sourcing destination. If we get this right, the DPP will scientifically prove that Bangladesh is the safest and most sustainable place to source from, silencing baseless criticisms.
BGMEA has already initiated pilot projects (such as with DigiProd Pass) to test blockchain-enabled traceability. We are preparing our members, but we need buyers to understand that data management is a cost that must be shared.
The primary challenge is the "Sustainability Squeeze": buyers demand world-class water stewardship but are rarely willing to pay a premium for green products, leaving manufacturers to bear the full cost of expensive technologies. Secondly, the cost of energy required to run advanced treatment plants 24/7 has skyrocketed, making compliance a heavy operational burden. However, the most imminent challenges in implementing sustainable water management include high investment costs, technical complexity of operating and maintaining ETPs, lack of common infrastructure in industrial clusters, and limited access to affordable green finance – especially for SMEs. In addition, overlapping regulations and inconsistent enforcement create uncertainty for factories.
The government has a crucial role to play by supporting planned industrial zoning, investing in shared wastewater infrastructure such as CETPs, offering fiscal incentives for water-efficient technologies, and ensuring predictable and transparent regulatory enforcement. The government can step in by treating "Green Machinery" differently from standard imports. We need duty-free importation of water-efficient technologies and recycling plant components. Industry-level improvements will be far more effective if supported by enabling public infrastructure and policy coherence.
Bangladesh has some great success in the area of environmentally friendly factories. In terms of "Green Infrastructure," we are ahead of competitors like Vietnam, Turkey, and India, boasting the highest number of USGBC LEED-certified factories globally. This gives us a distinct branding advantage. However, in terms of widespread "technological adoption" across the entire supply chain, we are still catching up to China, which benefits from massive state subsidies for automation and water recycling. While Vietnam has better natural surface water availability, lessening their immediate urgency, Bangladesh is leading the way in adaptation strategies because our groundwater crisis has forced us to innovate faster. We are arguably the most resilient, but we need to work harder to become the most efficient.
BGMEA has a target to reduce our blue water footprint by 50% by 2030 is ambitious, and frankly, it needs to be. Are we on track? The top 20% of the industry is certainly on track, with many already achieving reductions of 30-40% through modern technology. The challenge lies with the remaining 80% – the SMEs. Without a radical shift in how these smaller factories are financed, achieving a sector-wide 50% reduction will be difficult. We are making steady progress, but to fully hit this target, we need to unlock "Green Finance" that is accessible to the average factory, not just the corporate giants. We remain committed to the goal, but the trajectory depends heavily on the financial ecosystem supporting us. BGMEA sees the target as a framework to guide action and mobilize support, rather than a one-size-fits-all benchmark.
Enhancing water efficiency across BGMEA member factories requires collective action. BGMEA works as a platform to bring together government agencies, brands, financial institutions, development partners, and technology providers. Through dialogue, data sharing, pilot initiatives, and alignment of standards, BGMEA aims to move from isolated success stories to sector-wide improvement. Water efficiency is not something any single actor can deliver alone; it requires coordination across the entire ecosystem.
Our support for 2nd- and 3rd-tier factories focuses on awareness-raising, capacity building, and facilitation, instead of direct enforcement. Our role is to ensure that smaller factories are not excluded from the sustainability transition and that compliance becomes practical, gradual, and economically viable. To that end, we have worked and continue to work extensively with development partners like World Bank 2030WRG and IFC PaCT to promote water stewardship through the industry, and promote the adoption of water efficient technologies, along with water reuse and recycling.
On the other hand, BGMEA interprets our collaboration with global and local partners including WaterAid – not merely as a partnership with an NGO, but as a strategic alliance with a "Technical Knowledge Partner." While we understand the business of fashion, WaterAid brings the hydrological and scientific expertise required to make our strategies effective. This technical assistance is particularly valuable in shaping a Sustainable Water Management Action Plan that is practical, evidence-based, and sensitive to SME constraints. The collaboration helps ensure that the plan looks beyond factory boundaries and considers broader water risks, making it more robust and implementable.
Finally, it is important to recognise that SME factories are a vital part of Bangladesh's apparel sector, but they encounter unique challenges. BGMEA envisions mainstreaming SMEs through differentiated compliance pathways, cluster-based solutions, shared infraswtructure where feasible, and improved access to tailored financial products. Currently, the "Green Transformation Fund" (GTF) is often inaccessible to SMEs due to complex collateral requirements and strict due diligence. We at BGMEA envision a dedicated financing mechanism for SMEs with single-digit interest rates (ideally 3-4%) and relaxed conditions. By de-risking these loans, we can empower SMEs to upgrade their technology, ensuring they remain competitive and compliant rather than being forced out of the market.
Vidiya Amrit Khan is the vice president of Bangladesh Garment Manufacturers and Exporters Association (BGMEA)
