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This letter was originally sent to LightCastle Bimonthly Newsletter subscribers.
As we prepare to wrap up a happening 2024, Bangladesh stands at a pivotal moment in its sustainability journey. The global push toward circularity, in particular, presents unprecedented opportunities for our industries, particularly in the Ready-Made Garments (RMG) and Energy.
The RMG sector, our economic backbone, is witnessing a transformation driven by global demand for sustainable fashion. The global fashion industry is facing a pressing need for sustainable practices. Leading brands are increasingly prioritizing suppliers who demonstrate circular practices. Corporations like Adidas, H&M Group, and the Inditex Group have joined forces to significantly increase the use of recycled polyester in garments. Their ambitious target of 45% by 2025 is just the first step, with an ultimate goal of reaching 90% by 2030.
In alignment with the global momentum, the increasing demand for recycled man-made fibers (MMFs) marks a significant trend, with Bangladesh’s MMF share rising from 21.8% in 2021 to 28% in 2022. This strategic pivot follows successful models from India and Vietnam, enabling not only to cause less harm to the planet, but also to produce higher-value items like blazers, denim wear, and activewear that command premium prices globally.
The innovation doesn’t stop there. Leading brands are actively exploring the potential of other post-consumer plastics like ocean waste and packaging scraps, alongside pre-consumer waste like fabric offcuts. This closed-loop system keeps plastic waste out of landfills and oceans, preventing pollution and environmental damage. Innovative business models carved out by impact-driven startups and companies will make the most out of these growing opportunities.
Furthermore, sustainability also entails remaining energy efficient. According to a McKinsey study conducted in 2023, renewables will dominate the global power mix by 2050 and are already the lowest-cost option for new power generation in a lot of regions. Renewable energy is expected to provide 45 to 50 percent of global electricity by 2030, increasing to 65 to 85 percent by 2050, with solar being the largest contributor.
In their most recent policy, the past government revised the goals to attain 30% of energy from renewable sources by 2030. However, our committed goals have fallen far short of those of our peer nations—namely India and Vietnam.
Bangladesh, one of the world’s most densely populated countries with scarce land resources, faces challenges in adopting large-scale renewable projects like solar parks, unlike countries such as India or China. Despite these obstacles, solar power is the largest contributor to renewable energy in Bangladesh, accounting for approximately 1,080.36 MW out of a total generation of 1,374.35 MW. There has been a significant emphasis on the adoption of solar power, from Solar Home Systems (SHS) to industrial applications.
Solar rooftop installations in garment factories can reduce operational costs while meeting international buyers’ renewable energy requirements. The success of factories in Gazipur demonstrates the viability of this approach. One large RMG company’s implementation of solar panels across 2.1 million square feet of factory space generates 4.5MW of power, reducing energy costs by $1.2 million annually while cutting carbon emissions by 4,000 tons. That’s staggering.
To stay competitive in 2025 and beyond, Bangladesh needs to step up further. We have to strengthen our energy security by engaging in frequent actionable dialogues with all relevant stakeholders. The policymakers need to ensure proper facilitation of resources and put the right incentives in place for the private companies to make the investments, which is crucial for the creation of a more sustainable outlook.
Our strategic position in global supply chains, combined with our growing technological capabilities, make this the perfect time to embrace circularity. We invite you to explore these opportunities with us and join the movement toward a more sustainable future.
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