Barriers to Greening Factories according to CPD

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Policy and Regulatory Barriers:

Challenges in policy and regulatory frameworks-
The existing environmental policy framework needs to clearly define goals for firms to follow sustainable practices, which has led to insufficient implementation of regulations renewable.
Additionally, more policy support and incentives for encouraging investment in large-scale energy generation must be provided.

Lack of harmonization of policies and regulations-
Specific policy options and strategic direction for managing climate and environmental challenges that account for both the green transition of the industrial sector and economic growth in a harmonized way are missing.
There is also a lack of a holistic plan for ensuring a balance between sustainable environment-friendly industrialization (green transformation) and sustainable growth addressing the adverse impact of climate change and industrial pollution on the welfare of workers

Regulatory and policy uncertainty-
This can make it difficult for firms to assess the potential risks and benefits of investing in green technologies.

Institutional Barriers:

Weak regulatory, management, monitoring systems, and enforcement- Weaknesses in regulatory systems and lax enforcement hinder the effectiveness of existing environmental laws and regulations, leading to non-compliance by firms, as highlighted in key informant interviews (KIIs), where owners and managers emphasize the need for more stringent rules and policies to drive green management and lament the slow progress due to inadequate implementation

Lack of coordination among government agencies- Inadequate coordination among government ministries and agencies (such as between the Ministry of Industries and environmental authorities like the DoE) is hampering the development and execution of cohesive green industrial policies, hindering effective promotion of the technology-climate nexus and policy coherence for a successful green industrial transition.

Factory Level Barriers:

Several factory-level barriers to the adoption of green initiatives were identified. Workers understanding of green activities was primarily limited to physical and visual aspects of the workplace rather than the broader environmental impact.

Several factory-level barriers to the adoption of green initiatives were identified: 

Lack of Information and Awareness- In general, a higher level of awareness is observed in large factories compared to small medium, and micro factories. Workers understanding of green activities was primarily limited to physical and visual aspects of the workplace rather than the broader environmental impact.

Finance-related constraints- Access to finance is one of the most cited barriers for factories seeking environmental
certification or adopting green practices Lack of funds, especially for small, medium, and micro-sired factories or factories in tier 2 and tier 3, may put them at a disadvantage where the brands/buyers may avoid them for being environmentally non-compliant. Also, the collateral requirement is a major issue.

Compared to the others, large factories were performing better in terms of the embeddedness of environmental sustainability issues in their policies and workforce. There is a shortage of skilled human resources when it comes to maintaining greening-related technologies.

Operational barriers
Factories that operate in rented infrastructure may find it challenging to make significant investments in green initiatives, as they need more control over the building and its systems Limited demand for green products from domestic buyers is also a challenge.

Market-Related Barriers:

Lack of market-driven incentives- The absence of market-driven incentives acts as a significant impediment to firms embracing sustainable practices. The absence of premium prices for green products in the textile and RMG sector poses a substantial barrier to adopting environmentally friendly production processes.

Informational market failures- Informational market failures can also hinder firms from developing technological capabilities.
A lack of information and knowledge about green technologies and best practices can restrict a firm’s capacity to embrace sustainable technologies.

CPD Study:  Presented by -Muntaseer Kamal, Research Fellow, CPD.