Govt must integrate circular economy principles in incentive schemes

Govt must integrate circular economy principles in incentive schemes

With companies becoming increasingly vulnerable to the impacts of climate change, sustainability has become imperative for businesses to ensure their survival as they grapple with depleting resources. As international and domestic regulations tighten, it becomes more important for Indian apparel and textile companies to adopt sustainable practices. In this interview with Rakesh Rao, Devyani Hari, Director, and Ramanuj Mitra, Senior Program Officer, of Centre for Responsible Business (CRB), explains why sustainability has become indispensable for businesses around the globe and suggests some policy interventions needed for ensuring sustainable development in the textile industry.

Why is sustainability/circular economy important for the Indian textile industry? Are Indian companies having an export business or part of the global supply chain more eager to adopt sustainable practices?

Devyani Hari: Environmental and social sustainability have become indispensable for businesses around the globe. It is no longer acceptable that companies pursue business growth without regard to their impacts. SDG commitments, tightening international regulations, heightened consumer awareness, increasing ESG investments, innovations in material, chemicals, supply chain sustainability are some of the factors driving sustainability globally. The Indian apparel and textile sector is riddled with challenges pertaining to environmental pollution and human rights violations. As international and domestic regulations tighten, it becomes more important for textile businesses to adopt sustainable practices.

The sustainability journey has already begun for exporters, as they need to meet stringent guidelines laid down by European and North American buyers which are above and beyond the domestic regulations. Consumers in these regions put pressure on the brands to perform better on sustainability. Further, international regulations increasingly are emphasizing on supply chain transparency and sustainability. Therefore, to be part of the global value chain exporters must adhere to environmental as well as social norms and regulations. It is also observed that some brands are partnering with their lead suppliers to build capacities and provide some support to them in their transition to sustainability thus making it a little easier. 

It should be noted that sustainability also becomes imperative for businesses to ensure their own survival as they grapple with depleting resources and are increasingly becoming vulnerable to the impacts of climate change.

It seems that big apparel/fashion brands are driving the sustainability/circularity trend. Are you seeing other players in the textile value chain (like spinners, raw materials/fibre producers, textile machinery makers, etc) also adopting this trend? Any recent examples you would like to share with us?

Ramanuj Mitra: Stakeholders owning unit operations such as spinners, fibre producers/farmers are adopting sustainable practices based on their know-how and demand from the buyers or brands. Those who are part of global value chains tend to fare better. However, firms catering to the domestic market have a long way to go. These are largely small and micro units who lack the wherewithal to adopt latest equipment and practices, especially due to lack of knowledge and access to finance. Our conversations with stakeholders have highlighted that textile machinery is becoming more energy and water efficient thus helping to reduce resource consumption during manufacturing processes.

In the last decade or so, several Indian innovators have started offering sustainable products and services, such as AltMat (they manufacture yarn from alternative natural fibres such as banana and hemp) and FluxGen (they offer sophisticated equipment to monitor and reduce water consumption). A number of businesses/ start-ups have emerged with the objective of recycling or repurposing textile waste (Rimagined, Twirl Store) that not only address an environmental challenge but also offers opportunity for better livelihoods. But it will take a while before such products and services become mainstream.

With respect to policy interventions, what would be your suggestions to the government for ensuring sustainable development in the textile industry?

Devyani Hari: For long term growth and sustainability in the sector, the government must integrate circular economy principles in the incentive schemes. Under the PM MITRA scheme (PM Mega Integrated Textile Region and Apparel), “environmental and social impact” has been designated as one of the five factors that would be looked at while shortlisting locations for setting up textile parks. While this is a good start, circularity principles should be applied right at the design stage for the parks. Adequate water treatment and reuse mechanisms must be put in place, along with provisions for wastewater exchange/industrial symbiosis.

Ramanuj Mitra: Most of the existing apparel and textile units in the country are micro or small – this is a handicap against implementing sustainable practices. Efforts must be made at the cluster level or sub-cluster level, such as building common infrastructure for these units. Awareness and capacity building programs would go a long way in acquainting these businesses with latest trends and equipment for sustainable manufacturing. Concessional lending or customised lending products will support the industry in adopting sustainable practices.

Are incidents of Greenwashing (an unsubstantiated environment-friendly claims made by companies about their products) creating doubts in the minds of customers about ‘Green’ claims? How can we (companies and govt/regulatory bodies) deal with Greenwashing in India?

Ramanuj Mitra: Greenwashing is as old as the conversation sustainability. It exists in all manufacturing industries but it is more pronounced in the in the apparel and textile sector as the value chain is very diverse and disaggregated. This makes it difficult for even the regulators and auditors to verify claims; the consumers have very limited means to verify sustainability claims made by the brands.

Devyani Hari: Regulations must mandate full disclosure of value chain, which must be enforced by surprise checks and third-party auditing. Blockchain-based solutions are coming up that enable stakeholders to effectively track and monitor the source of their products and raw materials. This would add some transparency to sustainability claims made by brands. There may be a need to determine binding standards and benchmarks in consultation with the industry stakeholders in India.

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