Challenges

The primary focus of the textile industry of Ethiopia is on production and, to some extent, on the quality of production, while less attention is assigned to Environmental, Social and Governance (ESG) for sustainability –namely saving resources, environmental protection and compliance at all levels of the textile and garment industries – and to public institutions. There is a lack of clear and uniform ESG standards that conform to international markets and no formal system or practice of compiling good ESG practices and preparedness for scaling up; there is also a gap in implementing ESG-related policies, proclamations, regulations and a lack of awareness among industry management staff on complying with national and international buyers’ ESG requirements in terms of stringent compliance requirements relating to environmental, social and  governance factors.

Toward a Solution

The project on “Sustainable Textile Investment and Operation in Ethiopia” aims to promote ESG performance in the local textile enterprises and foreign direct invested (FDI) industries; to upgrade the capacity of the national regulatory body through trainings and improved ICT applications for performance monitoring; and to create an easy information access platform for international buyers and manufacturers. The project also aims to contribute to the achievement of the following Sustainable Development Goals (SDGs): primarily SDG 12: responsible consumption and production patterns; and others – SDG 5: achieve gender equality; SDG 8: promote sustained, inclusive and sustainable economic growth, full and productive employment and decent work for all; SDG 9: foster and promote inclusive and sustainable industrialization; SDG 13: climate action; and SDG 17: strengthen the means of implementation and revitalize the global partnership for sustainable development.

The project will develop an interactive online platform that will be used to promote the textile industries based on their scores relating to ESG performance, including two main components: 1. documenting best ESG practices and establishing an open access digital platform for sharing best practices; and 2. upgrading the technical capacity of the FDI textile and garment industries, local SMEs and their counterparts, thereby improving the target industries’ ESG performance and upgrading the capacity of ETIDI and the Ethiopian Textile and Garment Manufacturers’ Association to provide reliable and consistent technical support to the target industries.

The project is implemented by UNIDO, in cooperation with United Nations Global Compact( UNGC), ETIDI, CNTAC and GIZ.  The CNTAC is guided by UNIDO, in cooperation with UNGC, to implement key capacity-building activities, especially in the adaptation of Asian good practices to the Ethiopian textile and garment sectors, for South-South cooperation in the transfer of knowledge. ETIDI provides an in-kind contribution to local technical activities. GIZ works as another technical arm to formulate triangular cooperation supporting the training activities to overcome transnational development challenges.

The Project Steering Committee (PSC) is composed of representatives of involved counterparts, both at private and public sector levels. These include the Ethiopian Ministry of Trade and Industry (MoTI), ETIDI and ETGAMA; CNTAC, GIZ and UNIDO. To ensure complementarity of activities and monitoring accuracy, the PSC is included in the oversight structure of the Programme for Country Partnership (PCP) for Ethiopia through its reporting after each PSC meeting to the PCP Ethiopia High-Level Joint Steering Committee.

With the current project implementation, UNIDO has successfully conducted many planned activities to achieve the SDG targets. Five Ethiopian institutions strengthened their ESG knowledge, 32 public and private actors gained awareness/knowledge, 5 online and hybrid capacity-building activities were provided, and one analytical and statistical publication produced. Specifically, 30 companies including the foreign direct invested and local companies in Ethiopia were promoted to adopt sustainable practices supporting SDG 12 of sustainable consumption and production; and the gender-balanced participation of target beneficiaries were promoted throughout the project implementation to support SDG 5; 15 firms benefited from improved management practices and 28 actors participated in enhanced collaboration settings (clusters, networks) to support SDG 8 and SDG 9; one United Nations interagency mechanism and 5 other key partnerships were developed in support of the SDG 17 goals.

The project is promoting an innovative triangular collaboration based on South-South cooperation to promote good practices and to transfer knowledge from Asian countries to Ethiopia and to potentially other African countries. UNIDO leveraged the expertise of CNTAC in Asia and GIZ’s experiences in the relevant sectors in the Asia-Pacific region and in the global context to enhance this triangular cooperation. The local private sector and professional organizations were also well synergized. 

The project was designed to set up systems and approaches to ensure the sustainability of project interventions in the textile value chains. The project is aligned with existing national textile industrial development priorities. The project is to ensure national leadership and ownership, in close collaboration with the national government coordinating agency, thereby ensuring that project initiatives, lessons and best practices can easily become focal areas for the government to build upon in their future plans and programmes; and to ensure multi-stakeholder participation and consultation.

The project fosters a high degree of participation and engagement with stakeholders from both the private and public sectors to ensure high-level support and a powerful sense of ownership; to avoid duplication; and to maximize past investments and programmes. The project builds on existing capacities and networks in agro-industry development and adopts a long-term approach. The project supports the promotion of policy frameworks for long-term policy change and the development of critical capacities for implementing ESG principles at the national level.

Developing an approach for the replication of achievements and good practices in other countries or industries in Africa or Asia has been identified as one of the project outputs. The project team members plan to develop strategies aimed at understanding the national and sectoral context in regard to the shifting global value chain and post-pandemic recovery. Now that a knowledge hub and training modules have been established from the current project, further financial and technical support would make it possible to extend good practices more widely and to adapt them to similar situations or settings in the region.