The world of fast-fashion has dramatically changed consumer expectations and increased the production cycles of the retail industry, but at what cost?
The number of clothing items purchased by customers increases by 60% annually, and product lifecycles are half as long as they were 15 years ago. With this immeasurable growth, fast fashion retailers are unable to match environmental efforts at the same rate [1]. Retailers have an especially important role as they have supply chain control, from agricultural inputs to customer education, and can act as a middle-man between the producer and the end-user [2]. Additionally, apparel production drives a significant use of chemicals and water. Coupled with consumers’ increasing awareness of climate change and willingness to pay for social impact, sustainable practices can act as a competitive advantage [3].
The Swedish-based apparel retailer has made it their responsibility to change the face of sustainable fast-fashion. According to CEO Karl-Johan Persson, H&M’s vision is to “lead the change towards circular and renewable fashion” [5]. By 2040, H&M has committed to a climate positive value chain through a multi-step plan that focuses on using energy from renewable sources and reducing the energy need across 1) raw materials, 2) production processes, and 3) distribution/in-store activities [4].
A Sustainable Supply Chain in Today’s World
With a goal of using 100% renewable energy in its own operations, H&M has already made notable moves: in 2016, 96% of their energy came from renewable sources, up from 78% in 2015. Carbon dioxide emissions were reduced by 47% in the same year [4].
H&M has incorporated both suppliers and consumers in their sustainability efforts:
They became a founding member of the Sustainable Apparel Coalition, an “industry-wide alliance working towards sustainable production”. From which, the Higg Index was created to assess the performance of social and environmental measures, and to recognize areas of improvement. H&M was one of the first global fashion houses to roll this initiative out to their Tier 1 and 2 factories [5].
H&M set up a garment collecting platform as a tool to empower the customer: for a 15% discount, customers donated no-longer-worn items, which were later re-used to produce new clothes. Since 2013, they have collected 40,000 tons of clothing and aim to collect an additional 25,000 by 2020. This program reduces the climatic impact of production and emphasizes H&M’s promise to increase their use of sustainable materials and to improve recycling technologies [6].
The company has also established key partnerships with organizations focused on creating systematic changes in the fashion industry, including: Canopy, Better Cotton Initiative, and Cradle to Cradle Products Innovation Institute [5].
By 2030, H&M has committed to the following across their supply chain as part of being “100% Circular and Renewable” [5]:
- Raw materials: use 100% sustainable cotton by 2020, 100% recycled or other sustainable materials by 2030
- Production Process: Zero discharge of hazardous chemicals, reduced waste, and introduction of water-efficient equipment. Climate neutral Tier 1-2 supply chain.
- In-store: 25% reduction in electricity.
However, more action is needed to reach a carbon-positive footprint by 2040, an aggressive goal for a retailer this size [7].
Much of H&M’s plan highlights preventative measures and therefore lacks mindfulness on how to react to the current climactic issues that can be devastating for a company with a complex value chain. Changing temperatures, rising sea tides, and unexpected storms will affect raw material costs, shipping routes, and manufacturing operations [8]. H&M’s focus on mitigation does not address what can be done in immediate times to protect shareholder value and customer satisfaction in the face of unpredictable weather patterns.
Looking to the Future of Fast-Fashion
As one of the world’s largest apparel retailers, H&M has the opportunity to be the leader in the sustainable fashion movement.
Sustainability, although a competitive advantage for now, will be the expectation for go-forward supply chain processes. In the future, H&M should share best practices with other companies specifically as it relates to training suppliers, establishing benchmarks for factory and in-store operations, and implementing renewable energy sources.
As it relates to the customer, education is key. Marketing and store associate training can complement H&M’s efforts and communicate the importance of eco-friendly purchases. While there exists a subset of customers who are willing to pay premiums for impact-driven clothing, it is imperative to get everyone, from the producers to the consumers, on board.
Some questions I will leave you with:
- Is it realistic for a company to continue growing and to minimize their carbon footprint, at the same time? Consider the emergence of e-commerce in the retail industry.
- Who is responsible for bearing the additional costs these sustainable initiatives will demand: the company, the suppliers, or the customer?
[Word Count: 780]
________
[1] Remy, N., Speelman, E. and Swartz, S. Style that’s sustainable: A new fast-fashion formula. (2016, October). McKinsey & Company: Sustainability & Resource Productivity. Retrieved from https://www.mckinsey.com/business-functions/sustainability-and-resource-productivity/our-insights/style-thats-sustainable-a-new-fast-fashion-formula
[2] Wiese, A., Kellner, J., Lietke, B., Toporowski, W. & Zielke, S. 2012, “Sustainability in retailing – a summative content analysis”, International Journal of Retail & Distribution Management, vol. 40, no. 4, pp. 318-335.
[3] Shen, B. (2014). Sustainable Fashion Supply Chain: Lessons from H&M. Sustainability, 6(12), pp.6236-6249. Retreived from http://www.mdpi.com/2071-1050/6/9/6236/htm#B1-sustainability-06-06236
[4] H&M Kicks Off Climate Week In New York. (2017, September 29). Market Watch. Retrieved from https://www.marketwatch.com/story/hm-kicks-off-climate-week-in-new-york-2017-09-19
[5] THE H&M GROUP SUSTAINABILITY REPORT 2016. (2017, April 4). H&M. Retrieved from https://sustainability.hm.com/content/dam/hm/about/documents/en/CSR/2016%20Sustainability%20report/
[6] Marfil, L. H&M Launches Campaign to Recycle Clothing. (2017, January 25). Women’s Wear Daily. Retrieved from http://wwd.com/business-news/marketing-promotion/hm-launches-campaign-recycle-clothing-10766946/
[7] Winston, A. There’s a Leadership Vacuum on Climate Change. Business should fill it. (2017, April 21). Harvard Business Review. Retrieved from https://hbr.org/2017/04/theres-a-leadership-vacuum-on-climate-change-business-should-fill-it
[8] Boynton, J. H&M’s Bold New Journey to ‘Climate Positive’. (2017, April 4). Triple Pundit. Retrieved from http://www.triplepundit.com/2017/04/hms-bold-new-journey-climate-positive/
