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Tuesday April 16th, 2024

Teejay Lanka’s ESG Strategy for Success in Global Apparel & Textile

Salman Nishtar – Group COO of Marketing & Supply Chain of Teejay Lanka

Salman Nishtar, Group COO of Marketing & Supply Chain of Teejay Lanka, discusses the company’s proactive approach to integrating ESG (Environmental, Social, and Governance) principles into its core business strategy to succeed in the rapidly shifting landscape of the global textile & apparel industry, driven by changing consumer behaviours and regulatory demands. 

For context: Give us an overview of the textile and apparel industry and the factors shaping its future, particularly how consumer behaviour and regulations are shifting due to increasing demands on ESG.

The textile industry is a multifaceted sector that encompasses the production of fibres, yarns, fabrics, and finished textile products, playing a significant role in the global economy.

Traditionally, the apparel industry heavily relied on cotton, primarily sourced from regions such as India, the USA, and Australia, with fabric manufacturing concentrated in China and the South Asian region. However, there has been a notable shift in recent decades towards synthetic fabrics, driven by changing lifestyles, notably the rise of athleisure and activewear segments.

Today’s consumers increasingly seek personalized items and prioritize traceability and sustainability in products, influencing supply chain dynamics. This shift has prompted changes in supply chains, with a focus on alternative options and sustainability practices. Consequently, production is diversifying beyond traditional hubs, expanding towards countries such as Vietnam, Bangladesh, Indonesia, and East Africa, including some South American countries.

As market dynamics evolve and demand for ethical and sustainable practices grows, Environmental, Social, and Governance (ESG) considerations have become paramount, shaping manufacturing practices and reporting standards. Teejay, a global fabric manufacturer, exemplifies this trend, underscoring the increasing importance of ESG factors in the industry’s evolution.

Can you take us through your ESG initiatives, and how incorporating them into the core business is helping Teejay Lanka successfully navigate a competitive global industry?

Sustainability has been woven into the fabric of Teejay since its inception. Our sustainability footprint, “Abhivaraha 2030,” is centred around climate action, responsible resource consumption, and biodiversity enhancement, all in alignment with the UN Sustainable Development Goals. Our commitment to reducing greenhouse gas emissions, validated by the Science Based Targets initiative, ensures alignment with a 1.5°C trajectory. Concurrently, we are targeting a 42% reduction in Scope 1 & 2 emissions and a 25% reduction in Scope 3 emissions from purchased goods and services by 2030. To support biodiversity, we have pledged to plant one million trees along the banks of the Kelani River by 2050 and have already initiated reforestation projects in India and Sri Lanka at a Group level. Our sustainability endeavours have earned us the top spot in the Higg Index among fourteen thousand global players, underscoring our dedication to eco-friendly practices.

On the social front, our Corporate Social Responsibility (CSR) initiatives include raising awareness about sanitation and constructing washroom facilities in schools. Additionally, we collaborate with partners to supply hygiene products to schools, promoting health and hygiene standards. We have also launched the Akura programme, where we create books from unused paper of used books for schools, promoting sustainability and education simultaneously. In terms of Diversity, Equity, and Inclusion (DEI), our “SheCan” initiative focuses on increasing women’s leadership at the Group level, and we exclusively operate the knitting operation in our India plant with female employees.

Furthermore, Teejay has been ranked as the No. 1 corporate for transparency in corporate reporting for the second consecutive year by Transparency International Sri Lanka, reflecting our commitment to governance.

What are the particular challenges the company had to confront in its ESG journey and how were these overcome?

Despite our ambitious long-term goals, we’ve meticulously broken them down into manageable three-year rolling plans, continually funding initiatives based on thorough study and analysis. To address challenges, especially concerning Environmental, Social, and Governance (ESG) factors, we have adopted a holistic approach. While our efforts have been ongoing, we have formalized the structure with a top-down approach.

The management approaches are annually reviewed by Teejay’s Cross-Functional Team, facilitated through the central Sustainability Department. Overall guidance is provided by the CEO, alongside the administration, occupational health and safety, CSR, corporate communications, and legal teams, ensuring effectiveness and applicability. Additionally, Teejay has established a Steering Committee for Environmental, Social, and Governance (ESG) Management to strategize and formulate policies and procedures as necessary. The progress of our ESG journey is reviewed quarterly, with relevant actions taken at the management level to enhance or further strengthen ongoing initiatives.

Given our manufacturing background, significant changes are necessary, particularly in transitioning our energy sources. The introduction of solar energy to manage our energy sources is currently underway.

What is your approach to aligning people – from employees to customers, suppliers and community – to a shared vision around commercial vision and ESG?

Our organizational values are deeply entrenched in a commitment to collaboration, which significantly influences our approach to communication and strategy development. Clear and effective communication is paramount to our operations, ensuring that our strategies are not only well-understood but also promptly implemented across the organization.

Furthermore, partnerships play a pivotal role in our initiatives, as evidenced by our ongoing collaborations with partners to assess the feasibility of specific projects. We actively engage with external stakeholders, including suppliers, customers, industry associations, international non-governmental organizations (INGOs), and government agencies, to amplify the impact of our Environmental, Social, and Governance (ESG) initiatives. We are deeply involved in sustainability and compliance initiatives undertaken by various brands, to enhance transparency throughout our value creation process.

As a multinational organization, we consistently seek out opportunities for shared value creation and collaborative action on issues of mutual concern, including climate change, supply chain sustainability, and community development.

What’s next for Teejay Lanka and how do you intend to further sharpen the ESG focus?

We aim to achieve net zero emissions by 2050, driven by our steadfast commitment to conducting business ethically and sustainably in alignment with our values. We’ve established ambitious targets for both 2030 and 2050, supported by a well-structured plan that guides our journey towards this overarching objective. While implementing such changes demands significant effort and dedication, we are resolutely committed and have already initiated concrete steps towards realizing this goal.

One such initiative involves the creation of a monitoring system, designed to track metrics such as carbon emissions, water usage, and energy consumption, enabling us to optimize our resource efficiency. Embedded within ESG principles is the ethos of accomplishing more with less, accentuating efficiency and sustainability. We are wholeheartedly dedicated to modernization, which reflects our continual commitment to advancement and transparency.