How is Walton Hi-Tech forging a more sustainable future for Bangladesh’s high-value manufacturing sector?

Bangladesh is one of the world’s most dynamic economies,¹ with a young population, a rapidly expanding consumer sector and impressive export-led growth. Its manufacturing sector is quickly moving up the value chain, thanks to companies like Walton Hi-Tech Industries PLC, which exports a broad range of electronics and electrical goods – including fridges, air conditioners, TVs, laptops and other home appliances – to over 40 countries and regions.

Bangladesh’s long-term development, however, is threatened by environmental issues. The low-lying country ranks as the seventh most vulnerable to climate change² and faces a looming water crisis driven by declining rainfall and the rapid depletion of its groundwater reserves.³ The government is responding, with a target to reduce carbon emissions by 22% by 2030 and a holistic water management strategy, the Bangladesh Delta Plan 2100.

Walton is aligning its own growth with these national priorities. It has set clearly defined targets for reducing its greenhouse gas (GHG) emissions and groundwater consumption for every unit of production.

To support the company, HSBC has converted financing facilities totalling around USD70 million into a sustainability-linked loan. The bank worked with Walton to identify material sustainability issues and set ambitious targets to reduce GHG emissions and water consumption in the company’s operations. Meeting both targets – which will be checked and validated by a third party – over the facility’s three-year tenor will lead to a five-basis-point reduction in the interest rate.

With these goals in focus, Walton has installed solar panels and more energy-efficient machinery, and implemented initiatives to reduce, reuse and recycle industrial waste. The company has also set up a biogas plant at its factory to generate energy from food and industrial waste, along with a wastewater treatment facility and natural reservoirs to save water.⁴ On top of these initiatives, Walton will continue to invest in their facilities to drive further reductions in GHG emissions and water consumption.

“We are proud to support Walton as it seeks to reduce its energy and water usage, while helping Bangladesh advance up the manufacturing value chain in a more sustainable manner,” says Gerard Haughey, Managing Director and Head of Wholesale Banking at HSBC Bangladesh. “This shows how bespoke sustainable financing can enable growth in developing and mature economies”.

Complementing its efforts to curb its own emissions, Walton is also committed to making its products as energy efficient as possible, with a view to helping mitigate the environmental impact of Bangladesh’s growing economy.

Though the country contributes relatively little to climate change – just 0.5 tonnes of carbon dioxide emissions per capita, compared to the global average of 4.3 tonnes⁵ – its increasing affluence will be accompanied by greater use of air conditioning, electronics, appliances and personal transport.

So, for Walton, pursuing energy efficiency is a matter of urgency. For instance, the company is helping to reduce transport emissions by launching Bangladesh’s first domestically produced electric scooters at the end of 2022.⁶ Last year, the company also established a research and development centre in South Korea,⁷ where it is working on energy-efficient air conditioners.⁸

“Sustainability and environmental protection are essential to building a suitable environment for future generations,” said Walton Managing Director and CEO, Golam Murshed. "Walton is committed to running its business in a responsible, environmentally sound, and sustainable manner in production, service, and all activities throughout the organisation”.

In a country at the frontline of the fight against climate change, this is a message that will surely resonate.

Today we finance a number of industries that significantly contribute to greenhouse gas emissions. We have a strategy to help our customers to reduce their emissions and to reduce our own. Find out more: https://www.hsbc.com/who-we-are/our-climate-strategy