The small town of Arayampathy on Sri Lanka’s eastern coast was once part of the turf contested by government troops and Tamil separatists in the country’s three-decade civil war. Now, years after the guns fell silent, the farming and fishing community is an unlikely contender to shape the future of global fashion.

A sprawling garment factory of Brandix, a leader in the local apparel industry, is nestled among ebony trees and flowering plants on a 4-hectare property. Elephants roam in nearby scrub forests. The facility boasts green credentials to match the setting: Rooftop solar panels keep its machines and air conditioners running, solar tubes light the interior for 1,600 workers per shift, and processing systems treat wastewater. The entrance sports a plaque conferring a platinum rating from the U.S.-based Leadership in Energy and Environment Design program, the highest for any factory in Sri Lanka.

The factory is not alone in embracing “green chic.”

Many are convinced that greener manufacturing and a commitment to sustainability hold the key to making Sri Lanka’s garment industry more competitive. In turn, a successful green buildup of an industry that already accounts for nearly 50% of Sri Lanka’s foreign exchange income via exports could help put the crisis-plagued economy back on track.

Across the Sri Lankan garment sector — which commands only a small global market share but supplies big-name brands like Gap, Patagonia, Hugo Boss and Victoria’s Secret — factories are following a similar pattern. “More and more factories have started on this journey to make up for scale by offering sustainable manufacturing products,” said Yohan Lawrence, secretary-general of the Joint Apparel Association Forum, the Sri Lankan garment industry’s top body. “It is becoming the financially correct choice to climb up the value chain by investing in innovation and environmental sustainability.”

Doing so is not easy for an industry navigating international and domestic economic storms. The current global slowdown slashed $1 billion off Sri Lanka’s apparel export earnings in 2023, which fell to $4.5 billion, according to JAAF data. This came after the nation of about 22 million suffered a financial meltdown in 2022, when it defaulted on its sovereign debt for the first time. And before that, the employers of an estimated 320,000 workers were forced to adopt strict health protocols amid the COVID-19 pandemic.

Yet none of this has quashed Sri Lanka’s motivation to go green. The Board of Investment, the government’s foreign investment promotion arm, has joined the fray by rolling out plans to transform three of its 14 free trade zones into environment-friendly areas.

Hosting an International Climate Change Forum last November, Sri Lankan President Ranil Wickremesinghe spoke of plans to transition to a clean economy and achieve net-zero carbon emissions by 2040. Recognizing the expertise limitations and financial constraints that stand in the way — he said it would cost $100 billion — Wickremesinghe spoke of the need to enhance climate financing capabilities and said the country is “reaching out to multilateral development banks and bilateral partners to obtain the necessary knowledge and support.”

For its part, Brandix says it is aiming for net-zero emissions at all 13 of its plants by the first quarter of 2024, with six having already reached the target. “Sustainability is a hot topic globally today, and producing garments to meet sustainable standards is becoming a base requirement,” said Hasitha Premaratne, managing director of Brandix.

Sri Lanka’s quest to become a bigger player in sustainable fashion comes as the industry draws closer scrutiny for its environmentally damaging global footprint. According to the United Nations Environment Programme, the fashion sector contributes between 2% and 8% of global greenhouse gas emissions, releases 9% of the microplastic that enters the ocean and consumes 215 trillion liters of water per year. Activists say this trail of pollution and excessive consumption must be stopped.

“Given the urgency of the climate crisis, we are at a tipping point, not just for the industry but for the planet, and we need to work fast if we are to reverse the worst impacts of climate change,” said Angela Ng, a director at the Hong Kong branch of the Sustainable Apparel Coalition (SAC). “Traditional business models exacerbate social and environmental problems, and we are not doing enough or evolving fast enough to not only mitigate but to improve them.”

SAC is a San Francisco-based global nonprofit alliance of 300 leading apparel, footwear and textile brands, retailers and manufacturers. Its Decarbonization Program has set its sights on a global green goal: to drive the sector toward an “ambitious and necessary” CO2 emissions reduction of 45% by 2030.

Asia — home to some of the world’s largest garment factories, spanning China and Bangladesh to Indonesia and Vietnam — has taken a cue. Environmental groups like the World Wildlife Fund say that the green trend in the apparel business has accelerated ahead of other manufacturing sectors in the region.

International brands have set out annual performance targets for Asian suppliers that include “phasing out coal-fueled boilers, energy and water efficiency,” said Hoang Thanh Nga of the WWF’s Vietnam office. “Some brands even set higher ambitions for their key strategic supplies, such as rooftop solar energy, wastewater recycling [and] recycled content in fabric.”

This is not just about altruism. Watchdogs of the multibillion-dollar apparel industry say global brands, like the big ones that source from Sri Lanka, are going green because of shifting tastes among consumers. “We see that the garment industry is increasingly listening to concerns in society around its business model,” said Christie Miedema, campaign coordinator at the Clean Clothes Campaign, an Amsterdam-based global network that advocates for better labor rights and working conditions in the garment industry.

“We see this happening among brands which start wind farms … use alternative materials … or among factories which try to attract brand’s clientele by placing solar panels.”

Either way, many Sri Lankan suppliers are attempting to answer the call. A fabric park run by MAS, another leader in Sri Lanka’s apparel industry, is among them.

The park is a privately owned special economic zone stretching over 65 hectares in a wooded area of Thulhiriya, along the banks of the Maha Oya river. With a workforce of about 10,000, it has a state-of-the-art plant to tap the river and purify the water for use, before treating the waste and discharging it back. The process is tracked by a team of vigilant engineers, one of whom insisted that the “investment has been done to meet sustainability standards, not based on the profitability aspect.”

MAS acquired the site, where a neglected textile mill once stood, and started a gradual greening process back in 2006. For electricity, the facilities use solar panels and biomass.

Farther south, in the Kalutara district, Sri Lanka’s largest weft-knitted fabric manufacturing plant uses a gauge from the Sustainable Apparel Coalition to prove its green bona fides.

SAC’s Higg Index is a combination of five tools to measure and assess social and environmental performance. “We have achieved a 90-plus Higgs Index score (out of 100), because international brands measure us against this score,” said Ranga Herath, deputy general manager at Hayleys Fabric, where power is generated through renewable energy such as biomass and solar, contaminated water is treated and waste is recycled. “We also have QR codes in our products for international brands, so you can scan and trace the backstory of a shirt, to trace how sustainable it is.”

Yet even the most ambitious environmental endeavors do not bring immediate relief for other problems in Sri Lanka and the industry itself. As the country attempts to pull itself out of bankruptcy, many of the poor face a life in darkness due to electricity cutoffs.

Change in this area has been “easier to implement with a one-off investment without changing the whole business model,” observed Miedema at the Clean Clothes Campaign. “These measures might genuinely lower energy use of these factories, however usually do little to nothing for the well-being, safety or alleviating the poverty experienced by the workers.”

But over the long term, the hope is that such changes will strengthen the economy and open up new opportunities.

Back at Brandix in Arayampathy, the shift to sustainable production of garments such as Nike shirts for children is seen as a timely answer to Sri Lanka’s limited international market share and scale. “Maintaining green compliance is where the sector is heading,” one of the factory’s managers said. “Green-friendly brands are the future.”