Corporate

Social Responsibility
Assignment - 2
Green Factories
Submi:ed to: Ms. Aboli Naik
Submi:ed by: Amitesh Ranjan BFT/16/1821
SanvriJ Rana BFT/16/18
1. Carbon Credits
Carbon credits is a tradable cerKficate or permit represenKng the right to emit one tonne of
carbon dioxide. The main goal for the creaKon of carbon credits is the reducKon of emissions of
carbon dioxide and other greenhouse gases from industrial acKviKes to reduce the effects of global
warming. Governments or some types of regulatory authoriKes set the caps on greenhouse gas
emissions. For some companies, the immediate reducKon of the emission is not economically
viable. Therefore, they can purchase addiKonal carbon credits to comply with the emission cap
from companies that can reduce the emissions immediately.
The introducKon of carbon credit was raKfied in the Kyoto Protocol. The Paris Agreement validates
the applicaKon of carbon credits to reduce emissions of the greenhouse gases and sets the
provisions for the further facilitaKon of the carbon credits markets.
Advantages
- Technology transfer from developed to developing countries.
- Be:er technology for company.
- Can change country’s financial situaKon.
- Development of cleaner technologies.
- Good alternaKve opKon for investment.
- Helps in developing extra income.
Disadvantage
- Developed countries purchase CER’s rather than finding new ways to reduce emissions.
Carbon Credit Example
Under the cap-and-trade or emission program, a company that is emiJng less than its capped
limit may sell its unused credits to another company that is exceeding its limit. For example, say
Company A has a cap of 10 tons but produces 12 tons of emissions. Company B also has an
emission cap of 10 tons but emits only eight, resulKng in a surplus of two credits. Company A may
purchase the addiKonal credits from Company B to remain in compliance.
2. LEED
LEED (Leadership in Energy and Environmental Design) is the most widely used green building
raKng system in the world. Available for virtually all building project types, from new construcKon
to interior fit-outs and operaKon & maintenance, LEED provides a framework that project teams
can apply to create healthy, highly efficient, and cost-saving green buildings. LEED cerKficaKon is a
globally recognised symbol of sustainability achievement.
Currently, Bangladesh has the highest number of green garment factories in the globe. Some 67
have already obtained the LEED cerKficaKon of the US Green Building Council and over 300 more
are waiKng in-line to obtain the cerKficaKon. Indonesia is the second largest with 40 green
factories followed by India with 30 and Sri Lanka with 10.

3. Green Factory
USGBC (United States Green Building Council) cerKfies the building structure as being GREEN
based on its level of environmentally friendly features. These are lower energy consumpKon, use
of renewable energy, safety issues, water efficiency, convenient working environment, and use of
technology, ability to fight fire and other accidents, and most importantly the strength of the
construcKon as being used for industrial purpose. There are several levels of such cerKficaKon-
PlaKnum, Gold and Silver. There are points for each green features. If the factory building a:ains
points 80 or above on the merit of its green features then it will be awarded as PlaKnum. The same
way with 70 or more but less than 80 qualifies for Gold and with 60 or more but less than 70
qualifies for Silver.
A green building has four main elements or components on which it is designed:
- Materials: Materials for a green building are obtained from natural, renewable sources that have
been managed and harvested in a sustainable way; or they are obtained locally to reduce the
embedded energy costs of transportaKon; or salvaged from reclaimed materials at nearby sites.
- Energy Systems in Green Buildings: Passive solar designs, energy efficient windows, natural
daylight design, energy-efficient lighKng, low energy appliances, and renewable energy
technologies.
- Water Management in Green Building: installing grey water and rainwater catchment system,
low flow shower heads, self closing or spray taps, low-flush toilets.
- Health Components of Green Building: using non-toxic materials and products enhances the
indoor air quality, good venKlaKon systems, the building must be free from chemical hazards
and building components such as adhesives, sealants, paints, coaKngs, composite wood, and the
other materials must not emit VOC.
4. Examples of Green Factories
- The KGI Garment Factory is a LEED Gold Rated, Sustainable Green Factory. Housing close to 500
employees in a built up area of 87,188.4 Square Feet, it is a state-of-the-art facility. It is located
within Sri City in Tada, Andhra Pradesh. The major feature of this factory is the use of maximum
natural light in place of the regular lights in the factory.
- Aditya Birla Fashion and Retail iniKated the Re-Earth Program to earn the LEED cerKficaKon. The
Fashion Crak factory and Haritha Apparels, both located in Bangalore, have received the LEED
Gold CerKficaKon in 2018. They are transparent in their vendor lisKng and an enKre list of their
vendors along with their locaKon and contact details are provided online. OpKmisaKon of
natural daylight, the use of LED lighKng, efficient HVAC systems, low flow tap systems, rain
water harvesKng system, a sewage treatment plant, proper waste management, and solar
panels are some of the features of these factories.

5. The Next Step

In order to learn more about the seJng up of these factories we have contacted Mr. Naresh Tyagi,
the Chief Sustainability Officer at Madura Garments and Mr. Jayarajan KR, the Vice President of
OperaKons. We have also contacted the architects who were involved in the construcKon of KGI
Garments in order to learn more about the materials used and the Kme and cost variaKon in the
seJng up of a green plant.
The topics of interest in these conversaKons will be:
- The characterisKcs and features of the building.
- The problems faced during the construcKon.
- The Kme frame for the construcKon of these building and the effect on the cost.
- The Kme period for the cerKficaKon.
- The problems, if any, faced on a day to day basis regarding the faciliKes.
- The profit quoKent.
- The advantages, if any, in terms of more orders or reduced operaKon costs.
- Their moKve behind going aker LEED CerKficaKon.
- Their plan on geJng LEED PlaKnum cerKficaKon.
- The effect on producKon efficiency.
- Changes in processes of manufacturing to uphold the green factory setup.
- Tax benefits, if any, related to the setup of a green factory.
6. References
- h:ps://www.conserve-energy-future.com/carbon-credits.php
- h:ps://corporatefinanceinsKtute.com/resources/knowledge/other/carbon-credit/
- h:ps://carbonfund.org/2012/05/30/difference-carbon-offsets-carbon-credits/
- h:p://www.sdfinance.undp.org/content/sdfinance/en/home/soluKons/climate-credit-
mechanisms.html
- h:ps://apparelresources.com/business-news/sustainability/green-factories-dont-earn-be:er-
apparel-makers/
- h:ps://new.usgbc.org/leed
- h:ps://theconstructor.org/building/elements-of-green-building/5375/
- h:ps://www.texKletoday.com.bd/green-factory-part-3/