A Stitch in Time Saves Nine: H&M’s Journey to Becoming a Sustainable Brand


From the way that consumers shop, to the way that brands produce and distribute their apparel, the fashion industry has completely changed over the past decade. The digital age, along with the millennial consumers’ obsession with fast fashion, are both responsible for the complete revolution of the industry. While there have been a number of positive outcomes from these changes, (convenience to consumers and the success of retail stores such as Zara and H&M), the rise in the popularity of fast fashion has also had an extremely damaging effect on the environment. Last December, FORBES released an article that stated “The apparel industry accounts for 10% of global carbon emissions and remains the second largest industrial polluter, second only to oil.”[1] As the damaging impact of fast fashion becomes more well-known, fashion companies are becoming more accountable for the output of their supply chains. Popular fast fashion chain, H&M, has emerged as a leader in the fashion industry when it comes to addressing and reducing its carbon footprint on the planet.[2]

hm

H&M Goes Green 

H&M has taken a number of steps to combat the destructive practices of fashion supply chains. I will acknowledge, that as a person who has loved consuming fashion for as long as I can remember- through media, retailers, and even through my work- “sustainable” is not the adjective that would naturally come to mind when thinking about a desirable fashion brand. However, H&M has successfully done sustainable fashion. By addressing the role that its operational processes have played in the proliferation of climate change, H&M has made a conscious effort to reduce its amount of greenhouse gas emissions. Where H&M has been the most successful in achieving this reduction, is in its use of renewable electricity.[3] In 2015, 78% of the electricity used in the retail giant’s stores, offices and warehouses, came from renewable sources, ultimately resulting in CO2 emissions dropping by 56%.[4]

The Issue with Manufacturing

manufacturing

The real challenge for H&M comes, however, in resolving the emissions issue as it pertains to its actual production processes. Like so many other retailers, H&M relies heavily on third-party manufacturers, leaving little control to H&M for sustainability decisions.

The solution?

Partnering with Solidaridad, and the Natural Resources Defense Council (NRDC).

 

Through these  organizations, H&M has been able to implement cleaner production programs that encourage its manufacturers to set emission reduction targets via an incentives program.[5] Additionally, H&M has dramatically improved its transportation practices so that the most efficient modes of transportation are utilized throughout the supply chain.

The Value of Sustainability

ethical-h-mThe high importance to which H&M holds climate change in its corporate practices can be seen implemented through its strategies from supply chain, up to its accounting department. In 2014, H&M started reporting its climate related corporate performance to investors through the Climate Change Reporting Framework.[6] Although this framework was not required by regulation, H&M believed that investors should take into consideration the company’s strategy of managing climate change in order to determine its appropriate value. H&M recognized that the industry’s dependence on raw materials could prove troublesome for the future, considering the rate that climate change was making these materials harder and more expensive to acquire. H&M’s move to report its climate related corporate performance, is just another illustration of its view that its sustainable strategies, including that of acquiring sustainably sourced materials and using raw materials that do not contribute to deforestation, will be a future competitive advantage.[7]

The Power of the Consumer

While the fashion industry has, for many years, been overlooked in the discussion of climate change, the fact of the matter is that every stage of a traditional apparel product’s life cycle – from sourcing the raw materials to its end use – has an impact on our planet. H&M’s relatively new sustainability processes are just the tip of the iceberg in delivering results that can make a real difference in our climate. In the $3 trillion fashion industry, the opportunity for change is immense. I would argue that H&M could double down on its education to consumers. While the corporation’s internal practices greatly impact the environment, H&M believes that 26% of the greenhouse gas emissions in a garment’s life cycle happens after the product is sold to the end consumer (the disposal of the clothes, as well as the maintenance of the clothes). In order to really move the needle in the reduction of greenhouse gases, customers need to play a more significant role. As customers continue to learn about the impact of fashion on the environment, they will increasingly demand more sustainable practices from their retailers.[8] Additionally, they will be educated to do their part in protecting the environment through deliberate maintenance and recycling of their garments. (775)

[1]James Conca, Making Climate Change Fashionable – The Garment Industry Takes on Global Warming, FORBES, 3 Dec. 2015,

http://www.forbes.com/sites/jamesconca/2015/12/03/making-climate-change-fashionable-the-garment-industry-takes-on-global-warming/#1f67cacc778a

[2]H&M, H&M ACHIEVES POSITION OF LEADERSHIP FOR CLIMATE CHANGE ACTION, (2013),

http://about.hm.com/en/media/news/hm-achieves-position-of-leadership-for-climate-change-action.html

[3]H&M Conscious Actions Sustainability Report 2015 http://about.hm.com/content/dam/hmgroup/groupsite/documents/en/CSR/reports/2015%20Sustainability%20report/HM_SustainabilityReport_2015_final_FullReport_en.pdf

[4]H&M Conscious Actions Sustainability Report 2015

http://sustainability.hm.com/content/dam/hm/about/documents/masterlanguage/CSR/2015%20Sustainability%20report/HM_SustainabilityReport_2015_final_com_4.pdf

[5]H&M Conscious Actions Sustainability Report 2015

http://about.hm.com/content/dam/hmgroup/groupsite/documents/en/CSR/reports/2015%20Sustainability%20report/HM_SustainabilityReport_2015_final_FullReport_en.pdf

[6]Mike Hower, H&M, Unilever Commit to Climate Change Disclosure as Matter of Fiduciary Duty, 30 Sep, 2014,

http://www.sustainablebrands.com/news_and_views/leadership/mike_hower/hm_unilever_commit_climate_change_disclosure_matter_fiduciary_d

[7]H&M, Sustainably Sourced Materials,

http://about.hm.com/en/sustainability/sustainable-fashion/materials.html

[8]Tensie Whelan and Carly Fink, The Comprehensive Business Case for Sustainability, Harvard Business Review, 21 Oct, 2016,

https://hbr.org/2016/10/the-comprehensive-business-case-for-sustainability

 

 

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14 thoughts on “A Stitch in Time Saves Nine: H&M’s Journey to Becoming a Sustainable Brand

  1. This was very interesting because I didn’t think of H&M as sustainable in any way. Much like IKEA, I consider them to be contributing to the problem rather than solving it. They are, after all, encouraging high consumption through low prices and a fast turnaround of styles copied from runways. I think the next steps you alluded to in your conclusion of finding some recycling program could be greatly beneficial to them, and would go a long way to convincing me that they are sustainable. I’m imagining a donation program or a recycling program located in-store. That being said, the sustainability initiatives you described are a good start.

  2. Loved this great summary of H&M’s practices and movement towards sustainability.

    The fast fashion industry does seem like a tricky one to implement sustainability in as their business model requires customers to purchase tons of cheap clothing often. The recycling point you bring up is a great idea to help alleviate this issue. I actually was at an H&M in Boston the other day and noticed a clothing recycling bin. I had never seen this in any of their stores before, so I just took a look at their website. The recycling program is a newer initiative and has already had really strong results: “Since we launched our garment collecting initiative in 2013, we have gathered more than 32,000 tonnes of garments to give them a new life – that’s more fabric than in 100 million t-shirts” (http://about.hm.com/en/sustainability/get-involved/recycle-your-clothes.html). I think it is key that they continue to implement this program and educate more consumers about it.

  3. Piersten, I echo the above comments and take the perspective of the hyper-conscious consumer who reads books like “Wear No Evil” (lol). In the spirit of the recommendation you provided, this education has actually led me to stop shopping at places like H&M and Forever21, and for reasons beyond their climate impact. It’s not because I have money to do so, but because I have access to secondhand shops, my roommate’s closets, and the like. So, there is a possibility that consumer education may reduce H&M’s sales, unless I am an entirely isolated case.

    The key question I believe the consideration of the hyper-conscious consumer brings up for H&M is: what would it take to keep an increasing pool of conscious consumers who have the ability to choose other options? For me, if H&M could not only eliminate its impact (in more ways than just GHGs) so that per unit of clothing it produced less negative impact than the industry standard, I would put my money behind this.

    In the extreme case of the most hyper conscious consumer, though, I would imagine he/she would say that H&M should account for all its historical negative impacts and eliminate *all* historical negative impacts through strategic manufacturing operations it shares with other clothing companies to reduce impacts outside its own; for this extreme consumer, this is the only way H&M could be redeemable: by having net zero impact throughout its existence in the world. (Imagine, this person grows 100% of their food in his/her backyard, uses recycled everything and recycles all his/her stuff — he/she holds any/every company to the same standard.) That said, outside of the environmental impacts, this extreme consumer could likely never be satisfied due to the worker deaths resulting from H&M’s operations, which would be impossible to redeem… but that aside, for the purposes of thinking about what companies — i.e. we as leaders of companies — really need to do for our world to survive the climate crisis is to think about how to have a less-than-zero climate impact, which is much more broadly applicable beyond H&M 🙂

  4. A very interesting post. While I’m not one to typically wager my opinions on fashion-related issues, my connection to Sweden and my recent rendezvous on the runway has opened my eyes and ears somewhat. I really liked the way you laid out the current practices that H&M has initiated as well as your recommended actions, which I really agree with. In line with your view, I see H&M’s required actions as three-fold:

    1) Set ambitious sustainability goals and then provide in-depth tracking and performance reporting
    2) Educate consumers on the environmental impact of their business and what people can do to help
    3) Help the entire supply chain to profitably improve their sustainability, including creating more sustainable products and end-of-life options (e.g. recycling)

  5. I never would have imagined that the apparel industry is second largest industrial polluter! To your point, I also don’t associate a good retail brand with sustainability. This leads me to question one claim that you made above, that H&M sees this commitment to sustainability as a competitive advantage moving forward. Unless you think their attention to sustainability will help increase supply of raw materials and enable them to avoid and pricing pressure, I’m not sure how much of a competitive advantage this will lend them from the consumer’s point of view. As we saw in the IKEA case, there is a big question as to whether the consumer will actually know or care about the practices behind something such as a bookshelf or sweater.

  6. Piersten – this is really interesting, thanks for sharing. I was at an H&M recruiting event and they had a really big emphasis on their sustainability programs and the extent of the social impact they were making. A few things strike me as interesting. First, I think sustainability is a clear initiative to take given their young demographic, which cares about sustainability. As such, it seems to be an expected part of their strategy and also seems to be a bit of a marketing effort to appeal to this demographic. Second, as one of the first movers in fashion sustainability, I think H&M has the power to engage in certain initiatives, release some metrics and “call” it sustainable since there is no true frame of reference. That is, they may be “checking the box” for sustainability – especially relative to their peers – but still be engaging in detrimental emission-intensive and/or wasteful operations.

  7. Thanks for the interesting post, I’ve noticed H&M’s marketing as conscious in their products, but didn’t realize they were such leaders in the industry. I think you bring up a great point at the end with regards to the end cycle of clothing also being particularly important to really make a dent in the fashion industry’s impact to the environment, what is H&M currently doing to address this? Are they manufacturing any clothing out of recycled material? (I realize this may be very difficult in large quantities, but I wonder to what extent they could do this since it seems like Nike was able to do this for some of the products they launched during the Olympics in South Africa)

  8. Great post Piersten,

    Situations like this, where the company’s operations is a primary contributor to climate change, are tricky. On one hand, it is reasonable to think, “Why doesn’t H&M completely discontinue any business functions that are damaging the environment?”, on the other hand, one may consider, “Is it reasonable to expect businesses to be environmentalist in conjunction with operating their core business?”. I’m not sure if I know the answer. I am curious how H&M would measure the impact of making continued efforts to educate its customers and whether the financial implication are sustainable (no pun intended). Going forward, H&M must be more introspective and determine what type of company it wants to be.

    Also, what are other fast-fashion retailors doing? H&M is taking the lead in embracing sustainability, I’d like to know whether other fashion companies are following suit.

  9. Great topic, Piersten. I often wonder if fast fashion encourages some of the same unsustainable consumer habits that we discussed during our recent IKEA case. One could argue that fast fashion consumers simply buy much more clothing than necessary thanks to retailers’ lower prices, lower quality, and ability to keep up with rapidly changing trends. Consumers may not be buying these items for long-lasting value because they can always just go back to H&M to get the latest look. Therefore, is the whole fast fashion business model unsustainable? Check out: https://www.theguardian.com/lifeandstyle/2011/may/08/fast-fashion-death-for-planet. It would be really interesting to see H&M implement consumer programs that encouraged education around this topic (i.e. offer opportunity to recycle clothing with H&M to obtain a discount on a future purchase and launch a line of products made of recycled materials).

  10. Piersten – Awesome post outlining H&M, fast fashion, and the global warming challenges, as I’m also interested in this industry and its sustainability. Wearing the management hat for second, I’m most curious what the financial tradeoffs are there for being more sustainable or are there strategic plays that can make sustainability an even more profitable option. And lastly, is there a trend towards “faster fashion” or “slower fashion,” as my hypothesis is that it will be “faster” in the sense that consumers would want more options for low cast, and it’ll be more rental, and I’m hoping that industry adapts in a sustainable way.

    Thanks for the post!

  11. This was a very interesting post not because I am a interested in fashion, but more so because it is an industry which I will have interactions with for the rest of my life. That being said, there are inherent obstacles in manufacturing industry where it is difficult to expand into different markets, while maintaining the partnership with Solidaridad. Firstly, the margins are extremely low in apparel manufacturing industry and thus there are limited room to increase cost for sustainability. Also, the environments in developing countries significantly differ from developed countries where it makes it impossible to leverage Solidaridad into actual production.
    Thus, there should be additional actions that should be enacted, in additional to consumer education, to fundamentally disrupt how people perceive manufacturing.

  12. Great post, Piersten! I especially like the dialogue this post has generated as our classmates reflected on the similarities between H&M and our case on Ikea. My initial reaction was that we may be holding these companies to unreasonably high standards but after reflecting on the fact that “the apparel industry accounts for 10% of global carbon emissions and remains the second largest industrial polluter, second only to oil,” I think they have responsibility to operate sustainably and for us as consumers to demand it.

    Additionally, consumers’ acceptance of sustainability seems to vary within the apparel industry as well. I say “acceptance” because I think in the apparel industry, sustainability is sometimes associated with lower quality. For example, Nike (in our marketing case) was reluctant to market their football jerseys as sustainable due to potential negative concerns about performance from consumers.

  13. Very interesting post! Thank you. I didn’t know apparel industry accounts for 10% of global carbon emissions!
    H&M efforts for reducting footprint from its factories and energy consumption are impressive. However, I do think the main role H&M could have in the future is educating the masses. Leveraging the brand mass marketing campaigns to introduce global warming related issues to millions of people could create tremendous social impact.
    Interestingly, some new tools are being created that might soon trigger competition among apparel brands in the field of carbon footprint (http://www.cleanmetrics.com/html/clothing_carbon_footprints.htm).

  14. Very interesting post! I was not aware that the garment industry such as H&M was so environmentally responsible. I have to say, every day, passing by the giant H&M stores on fifth avenue in New York, I cannot help but wonder what a waste of electricity it is to keep all the stores light up even after shopping hours. It is great to learn that at least much of the energy is made from sustainable sources. It will be interesting to find out what other companies, especially the luxury brands have done in terms of fighting the climate change since I would imagine that the luxury brands will have higher margin and therefore can potentially contribute more to the discussion of climate change.

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