Bangladesh’s export-oriented industries are increasingly exposed to sustainability-related trade regulations as major markets, particularly the European Union (EU), integrate environmental requirements into global value chains. Emerging measures such as the Corporate Sustainability Due Diligence Directive (CSDDD) and the Carbon Border Adjustment Mechanism (CBAM) are transforming environmental compliance from a voluntary practice into a prerequisite for market access. Against this backdrop, this policy brief examines the implications of green supply chain requirements for Bangladesh and assesses the country’s readiness to align its industrial and energy systems with evolving international standards. The analysis draws on evidence from South Asian industrialisation trends, carbon emission patterns, renewable energy transitions, and Bangladesh’s climate commitments under NDC 3.0. It finds that although Bangladesh has set ambitious emission reduction targets, its industrial supply chains remain heavily dependent on fossil fuels, while renewable energy adoption remains limited relative to rapidly growing industrial demand. The policy highlights several structural barriers to green supply chain transformation, including limited access to green finance, technological constraints, weak regulatory enforcement, information asymmetries among suppliers, and inconsistencies in industrial and energy policies. These challenges are particularly significant for small and medium-sized enterprises (SMEs), which often lack the resources and technical capacity to meet emerging compliance requirements. The brief argues that failure to address these constraints could undermine Bangladesh’s export competitiveness, especially in the readymade garment sector, which is highly dependent on EU markets. To support a sustainable transition, the policy brief recommends integrating environmental criteria into trade and industrial policies, developing a sector-specific industrial decarbonisation roadmap, expanding renewable energy adoption, strengthening support mechanisms for SMEs, and enhancing international cooperation through climate finance, technology transfer, and capacity-building initiatives. The policy brief conludes that green supply chains should be viewed not merely as a compliance obligation but as an opportunity to advance Bangladesh’s sustainable industrial development and long-term economic resilience.

Authors: Fahmida Khatun, Foqoruddin Al Kabir and Shazib Howlader
Publication Period: October 2026