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Adoption of Voluntary Environmental Practices: Evidence from the Textile and Apparel Industry in Sri Lanka

D. W. Kinkini Hemach and Ra

No 93, Working papers from The South Asian Network for Development and Environmental Economics

Abstract: This study examines voluntary adoption of environmental management practices in the textile and apparel sector in Sri Lanka. The textile and apparel industry contributes to 58% of total industrial export earnings and 52% of industrial employment in the country. Factories in this sector undertake different production activities and the Sri Lankan Central Environmental Authority identifies washing and dyeing factories as significant contributors to water pollution. In this study, we review existing environmental rules and regulations that apply to the textile and apparel sector and follow up with an econometric analysis of data from a factory survey and a set of detailed case studies. Our sample covers factories that are registered with the Sri Lankan Board of Investment, which primarily gathers large-scale export-oriented companies operating in the apparel sector. Study findings show that 96% of the factories surveyed voluntarily implemented at least one environmental management practice such as water recycling, material re-use and environmental audits and certification. 69% adopted more than two practices. Most of the surveyed factories had been inspected by regulators, but had never been fined. Our analyses suggest that while factories are responsive to existing regulations, market pressure from international buyers may be the dominant reason why Sri Lankan firms adopt good environmental practices. The analyses also suggest that firm's size and type of activities undertaken are the most significant factors that influence decisions to voluntarily adopt environmental management practices.

Keywords: Environmental Management Practices; Apparel and Textile industry; Sri Lanka. (search for similar items in EconPapers)
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