When Mario Draghi reframed climate action as a competitiveness strategy — not a moral obligation — he shifted the debate among European businesses.
I asked myself the question. Does Draghi’s logic also work for international supply chains? So Iet’s apply that logic to the international supply chain I know best: fashion!
Can European Fashion brands strengthen their competitive position by accelerating sustainability in supplier countries like Bangladesh?
From my experience, I’ve identified four mechanisms that link supplier sustainability to competitiveness. Later, I’ll also provide four levers for brands to drive the sustainability transition.
Competitiveness opportunity
- Cost and stability:
Factory interventions like energy efficiency, heat recovery, electrification, renewables, process optimization — reduce the embedded cost base of garments. That either lowers unit costs or stabilizes production in energy-constrained markets. In a low-margin fashion industry, operational efficiency in Tier 1, Tier 2 and Tier 3 is not philanthropy. It’s structural cost management.
- Risk and continuity:
Disruption due to environmental and social risks are now financial risks: permit delays, extreme weather events, worker safety shutdowns, heat stress, regulatory sanctions, and energy black outs. Each one hits delivery schedules and margin. Reducing these risks at source protects continuity — and continuity is a competitive advantage.
- Innovation and learning:
When brands co-develop solutions with suppliers such as a digital energy management, right-first-time dyeing, process redesign — they build repeatable decarbonization know-how. That knowledge scales across portfolios, it increases productivity and it reduces waste. That’s not CSR. That’s capability building.
- Market access and compliance:
EU regulation increasingly demands proof, not promises. Even where frameworks evolve, the direction is clear: more traceability, more product-level data, more accountability across value chains. Brands without verifiable upstream performance will face friction. Supplier sustainability is rapidly becoming a commercial license to operate.
The Bangladesh Experience
Bangladesh is central to global apparel production. I have visited many factories in Bangladesh over the last three years and seen how energy-intensive the fashion industry is.
The Apparel Impact Institute (AII) estimates that halving sector emissions by 2030 requires roughly USD 6.6 billion in investment, with a major financing gap still open.
Yet many factory-level projects show that decarbonization can be highly bankable. The problem is not technical feasibility. It is coordination, capital structure, and incentives.
Fashion Brand Bestseller (Only, Jack and Jones, Vero Moda) demonstrated with a significant investment how the Bangladeshi ESCO, Greener Garment Initiative, a joint venture with Solshare, can unlock capital for commercial and Industrial renewable energy. The Sustainability strategy of Bestseller structurally reduces the electricity bills for factories.
The Coordination Gap
Today, brands largely outsource decarbonization efforts. When I speak with factory owners, they express that they are instructed to improve their processes, adhere to strict standards, reduce lead times, and lower prices. Then we wonder why transformation slows.
Yet, the decision to invest lies with the factory, while the incentive architecture rests with the brand. For brands to achieve competitiveness, they must design for it. I identify four levers that brands can control:
- Contract planning for long-term commitments and volume visibility to make upgrades financially feasible.
- Capital mobilization by facilitating guarantees, blended finance, and payment terms.
- Operational partnerships to develop training and management systems that drive rapid efficiency gains.
- Data systems support to transform supplier improvements into credible, market-ready evidence.
These are strategic levers to enhance competitiveness.
My reflections
My original question was simple: does Draghi’s competitiveness logic travel beyond Europe — into international supply chains? What I have learned is this: the logic holds, but only if brands are willing to step into a different role. Not auditor. Not enforcer. But architect of incentives.
The more I study supplier decarbonisation, the clearer it becomes that sustainability does not weaken competitiveness — weak coordination does.
If we want stronger European fashion brands, we cannot ask for transformation and hope for advantage. We have to design it. And that is the real leadership test for brands in international supply chains: OWN THE INCENTIVE!
Willem Grimminck
Managing Director, OneTrueValue
