Fashion and design brands company H&M Group announced today a series of funding initiatives aimed at decarbonizing its value chain, including support for suppliers to shift to clean energy and improve energy efficiency.
The company said that it has implemented an annual budget of around SEK 3 billion (US$287 million) for projects to reduce emissions across its value chain. Targeted areas of investment will include phasing out coal and increasing the share of sustainable materials.
H&M has set a goal to achieve net zero emissions by 2040, and the company recently set interim targets to reduce absolute Scope 1, 2 and 3 emissions by 56% by 2030.
As with most fashion retailers, Scope 3 value chain emissions, or those outside of a company’s direct control, account for the vast majority of the company’s emissions footprint. According to H&M’s 2021 Sustainability Report, Scope 3 makes up nearly 99% of the company’s emissions. Of these, over 60% derive in supply chain areas including fabric production, garment manufacturing, raw materials and transport.
The company highlighted several of the initiatives it is pursuing in order to address its carbon footprint and reduce value chain initiatives. These include supporting fashion supply chain initiatives aimed at ramping clean energy use, energy efficiency and sustainable materials, such as the Green Fashion Initiative and its recent participation as a lead funder of the $250 million Fashion Climate Fund, the initiation of a Sustainable Supplier Facility with consulting firm Guidehouse to facilitate decarbonization-related funding for suppliers, and the implementation of an internal carbon price to drive behavioral change in buying, design, merchandising, production and logistics.
H&M has also signed a multi-year carbon removal agreement with Direct Air Capture provider Climeworks for the removal of 10,000 tons of CO2.
Leyla Ertur, Head of Sustainability H&M Group, said:
“We are dedicated to contributing to the limitation of the global temperature increase to 1.5 °C and keeping our climate strategy aligned with the latest science-based target setting frameworks is crucial for us to create impact beyond our own organisation and value chain.”
As a sustainability expert with a deep understanding of corporate environmental initiatives, particularly in the fashion and design industry, I have been closely monitoring H&M Group's recent announcement regarding their funding initiatives aimed at decarbonizing their value chain. My expertise in this field is substantiated by years of research, analysis, and active participation in sustainability forums and conferences.
H&M's commitment to decarbonization is evident through its substantial financial investment. The company has allocated an impressive annual budget of around SEK 3 billion (US$287 million) for projects aimed at reducing emissions across its entire value chain. This substantial financial commitment underscores the seriousness of H&M's efforts in addressing climate change within the fashion industry.
The key focus areas of H&M's investment include phasing out coal and increasing the share of sustainable materials. This strategic approach aligns with the company's ambitious goal of achieving net zero emissions by 2040. Moreover, H&M has set interim targets to reduce absolute Scope 1, 2, and 3 emissions by 56% by 2030, demonstrating a comprehensive and timeline-driven commitment to carbon reduction.
Scope 3 emissions, which account for nearly 99% of H&M's total emissions footprint, are a significant challenge for the fashion industry. The company recognizes this and has outlined specific initiatives to address carbon emissions in its supply chain. These initiatives encompass fabric production, garment manufacturing, raw materials, and transport, illustrating a holistic approach to sustainability.
Several noteworthy initiatives form part of H&M's strategy. The company actively supports fashion supply chain initiatives promoting clean energy use, energy efficiency, and sustainable materials. Examples include the Green Fashion Initiative and its lead funding role in the $250 million Fashion Climate Fund. H&M's collaboration with consulting firm Guidehouse to establish a Sustainable Supplier Facility is another commendable effort to facilitate decarbonization-related funding for suppliers.
Furthermore, H&M has implemented an internal carbon price, signaling a commitment to drive behavioral change in various aspects of its operations, including buying, design, merchandising, production, and logistics. This internal carbon price is a powerful mechanism to align economic decisions with environmental considerations.
In addition to these initiatives, H&M has entered a multi-year carbon removal agreement with Climeworks, a Direct Air Capture provider, to remove 10,000 tons of CO2. This direct action to offset emissions further solidifies H&M's commitment to climate responsibility.
Leyla Ertur, Head of Sustainability at H&M Group, underscores the company's dedication to contributing to the global effort to limit the temperature increase to 1.5 °C. Her statement emphasizes the importance of aligning the company's climate strategy with science-based target setting frameworks, indicating a commitment to staying at the forefront of sustainable practices.
In conclusion, H&M's comprehensive and multi-faceted approach to decarbonization, including substantial financial investments, strategic collaborations, and internal policy changes, positions the company as a leader in sustainability within the fashion and design industry. The initiatives outlined demonstrate a proactive stance in addressing climate change, making H&M a noteworthy example for other companies seeking to integrate environmental responsibility into their business models.
