STRM Document

Shared Transition, Shared Responsibility: Twenty Procurement Reforms to Share the Cost and Risk of Energy Transition in Pakistan’s Textile and Apparel Sector

A policy brief by ADS under the Shared Transition Responsibility Movement (STRM) proposing twenty procurement reforms in five areas to share the cost and risk of energy transition between brands and suppliers in Pakistan’s textile and apparel sector.

Summary

Pakistan’s textile and apparel industry earned US$17.9 billion in FY26, almost 60% of export receipts, yet suppliers are asked to decarbonize under high energy costs, expensive finance and short seasonal orders. Heat recovery and heat pump projects take from under two years to as long as eight years to pay back, and industrial boilers are replaced only every 15 to 20 years, while most buyer commitments run season by season. This policy brief by ADS, written under the Shared Transition Responsibility Movement (STRM), argues that procurement is the critical lever: if brands expect suppliers to decarbonize, procurement must make that transition investable. It sets out twenty procurement reforms in five areas, namely certainty of orders and purchasing, sharing cost and risk, finance and access to renewable power, capability and data, and fair compliance and a just transition. The reforms are grouped by the cash they require from buyers, followed by a roadmap from low cost commitments in 2027 to co investment and commitments matched to asset life by 2030, and recommendations for international buyers, national brands, government, banks and development finance institutions, and exporter associations.

Key Points

1How brands buy, more than what they demand, decides whether Pakistani suppliers can invest in clean energy. Season by season orders, late changes and cost only negotiation make long lived assets such as solar plants and heat pumps very hard to finance.
2This brief sets out twenty practical procurement reforms in five areas: certainty of orders, shared cost and risk, access to finance and renewable power, capability and data, and fair compliance.
3Most reforms cost buyers little or nothing in cash. Where co investment is needed, it can be scaled for each buyer’s share of a supplier’s output, and the resulting reductions are counted in the buyer’s own Scope 3 inventory.
4The reforms can begin in 2027 with low cost measures, such as forecasts, faster payment and a commitment to keep sourcing while a supplier follows its plan, and deepen to guarantees, co investment and commitments matched to asset life by 2030.
5Government, financiers and exporter associations each have a part to play: recognise reforming buyers, accept their commitments as credit support, and table model contract clauses collectively.

STRM Document

Key Figures & Data

Indicators of current purchasing practice. Brands scored 66 out of 100 on the Better Buying Purchasing Practices Index 2025, one point lower than in 2024, with aggressive price negotiation still reported. 52% of textile suppliers had accepted orders below the cost of production, and only 6 of 42 major brands were financing supplier decarbonization, with just one doing so without adding new debt. Sources: Cascale and Better Buying Institute, 2025; ILO, 2017; Stand.earth, 2025.

The twenty procurement reforms by area: (A) certainty of orders and purchasing, (B) sharing cost and risk, (C) finance and access to renewable power, (D) capability and data, and (E) fair compliance and a just transition. Reforms are numbered in sequence across the five areas.

Aggregation enables mid size suppliers to clear the entry threshold of the competitive power market. Five suppliers of 0.3 to 0.7 MW each fall below the 1 MW minimum on their own, but pooled with buyer credit support they form a 2.5 MW supplier group. Further hurdles include an 800 MW auction (400 MW in the first phase), a 160 MW cap per bidder and wheeling charges of about Rs12.55 per unit.