ESG in Textiles: A Guide for Manufacturers, Exporters & Investors

Parvinder Singh Founder Global Alliance for Textile Sustainability Council (GATS)

Introduction: Why ESG Is Now Non-Negotiable

In the last three years, ESG (Environmental, Social, Governance) has moved from a good practice to a global business requirement. In India, too, ESG is becoming mainstream:

The SEBI BRSR framework already makes ESG reporting mandatory for the top 1,000 listed companies, and this requirement is only set to expand.
Large brands and financial institutions are pushing their suppliers — especially MSMEs in textiles — to demonstrate ESG action.

Banks, investors, and buyers are now asking tough questions:

How sustainable is your factory?
How safe are your working conditions?
How transparent are your governance systems?

For textiles — one of the world’s most resource-intensive industries — ESG is no longer a burden. It is the entry ticket for export markets, green finance, and business survival.

What Is ESG in Simple Terms?

E – Environmental How do you manage raw materials, water, energy, waste, and emissions? S – Social How do you treat your workers, communities, and supply chain partners? G – Governance How transparent, ethical, and accountable is your business? In practice, ESG is about measuring what matters and fixing what is broken — so that your business is both profitable and responsible.

Why ESG Matters for Textiles

Textiles are among the top polluting industries in the world:

The global textile and apparel industry consumes about 93 billion cubic meters of freshwater annually. Textile production accounts for roughly 20% of global industrial wastewater pollution (mainly from dyeing and finishing).
The textile industry contributes about 10% of global carbon emissions.
Large-scale material waste (cutting scraps, deadstock, unsold inventory, post-consumer waste). Total waste exceeding 92 million tons, Over 85% of Fast Fashion produced is discarded, overall recycling around 20-25% and only 1-2% garments to garments recycling.
Complex social challenges (wages, safety, gender parity, community impact)

It is impossible to sustain this model in the long term. Unless we measure where we are going wrong, we cannot change course. ESG provides that framework. Global Drivers:

Finance: ESG-linked assets now exceed $35 trillion (Bloomberg)
Export Markets: EU’s CSRD and EPR laws mandate ESG disclosures from suppliers
Brands: 70%+ of global fashion brands now require ESG reporting from supply chains
Investors: ESG-compliant MSMEs can access concessional loans, green bonds, and lower interest rates

Breaking Down ESG for Manufacturers

Environmental Metrics

Scope 1, 2, 3 emissions (fuel, electricity, transport, supply chain)
Water use and effluent discharge
Waste segregation, recycling, and circularity
Chemical compliance (ZDHC, OEKO-TEX)

Social Metrics

Worker health & safety (fire, ergonomics, chemical handling)
Wages, working hours, and fair treatment
Gender inclusion (equal pay, women in leadership, training)
Local community engagement

Governance Metrics

Transparent reporting & accounting
Anti-bribery and compliance systems
Supply chain due diligence
Global certifications (GRS, RCS, BSCI, SA8000, Sedex, OEKO-TEX)

The Business Benefits of ESG

In a world where every buyer is comparing suppliers, ESG will be your business differentiator. It provides hard numbers that prove you are more efficient, responsible, and future-ready than your competition.

MSME Action Plan: Getting Started With ESG

Map your current practices – track water, waste, and energy use
Set 1–2 clear targets – e.g., reduce water use by 10% in 12 months
Track basic social metrics – worker safety, wages, training
Improve governance – written policies, transparent books, simple reporting
Get certified – start with practical ones like GRS, RCS, or OEKO-TEX

Case in Point: ASSPL’s Zero-Waste Denim Factory

At Panipat, Aadi Sustainability Solutions Pvt. Ltd. is building India’s first zero-waste denim garment factory, embedding ESG from day one:

E (Environment): Recycled cotton fibres, renewable energy, water-saving dyeing & finishing
S (Social): 60%+ female workforce, continuous training, safe workspaces
G (Governance): Full traceability, Digital Product Passports, compliance with buyer ESG standards

This model proves ESG isn’t a cost — it’s an investment in competitiveness and growth.

Coming Up Next:

Edition 6: “Scope 1, 2, and 3 Emissions in Textiles – Explained Simply” We’ll demystify emissions reporting with practical examples for spinning mills, dyeing houses, and garment factories — and show how reducing emissions saves both carbon and cash.

Final Thought

“ESG isn’t about ticking boxes. It’s about building trust, winning markets, and staying ahead of your competition.” For India’s textile MSMEs, ESG is the key to green finance, export access, and long-term survival. In an era of global competition, ESG will separate those who are just producing from those who are leading the future of textiles.