Businesses need to improve their approach to the global responsible business conduct agenda for a competitive edge in international trade against regional competitors and to attract investors. The responsible business conduct agenda refers to a set of principles, policies and practices that encourage companies to operate in a way that is ethical, transparent and sustainable while respecting rights, labour standards and environmental protection. In a dialogue on resilient supply chains and access to global markets, which the UNDP Bangladesh organised on May 19, experts observed that there are labour laws and environmental policies, but they remain on paper. There is no specific national action plan to ensure responsible business conduct as stipulated in various international frameworks and implementation remains fragmented and slow compared with its regional competitors. In major global indices, Bangladesh’s ranking also poses a challenge as the country ranked 105th out of 141 countries in the World Economic Forum’s Global Competitiveness Index. Thailand, Pakistan and Vietnam, meanwhile, adopted national action plans in 2019, 2021 and 2023 while India and Nepal are in the process of developing a plan. For trade survival and enabling an investment environment, Bangladesh needs to seriously take up ethical standards for business.
Businesses have treated issues of labour and environmental standards as optional for decades. Such an approach is evident in the apparel or leather industry, which operates violating labour and environmental laws. Reports say that leather exports declined from nearly $397 million in the 2014 financial year to around $142 million in the 2024 financial year, a drop of more than 64 per cent in a decade. The primary reason for this decline is a continued failure to establish environmentally compliant leather processing systems. A major challenge is the incomplete and inefficient central effluent treatment plant at the Savar Tannery Estate. Without proper wastewater treatment and environmental compliance, tanneries are unable to obtain Leather Working Group certification, a globally recognised requirement for accessing premium international buyers. Industry experts warn that without such certification, exporters risk further exclusion from high-value markets. Such non-compliance with responsible business conduct standards is increasingly restricting access to major export markets, especially the European Union, where strict environmental and rights due diligence requirements are enforced.
Considering that Bangladesh may lose 14 per cent of its export because of LDC graduation, the government should take steps early to improve the responsible business conduct agenda. In doing so, the government needs to develop a time-bound, comprehensive national action plan and establish a dedicated institutional structure for this purpose to coordinate different ministries, regulatory bodies and the private sector and development partners. Such coordinated action is essential to safeguard export competitiveness and ensure sustainable integration into evolving global trade regimes.
