#ImWithH&M

the new retail campaign platform: reconciling profitability with sustainability

In early December 2015, nearly two hundred key government officials from around the world gathered in Paris for the 21st UN Climate Change Conference. Nearly a year later, 94 nations ratified (and 192 signed) an agreement to limit an increase in the average global temperature to 2° Celsius and it entered into force.(1)

Although the conference itself received much press, there was a lesser known group of supporters rallying for the cause from the retail sector. A declaration issued to UN officials to ratify the agreement was signed, among others, by top executives from Levi’s, Adidas and the CEO of H&M, Karl-Johan Persson.(2)

This may seem ironic, as building an international, multi-billion dollar fashion empire that uses (and arguably wastes) natural resources to create every product is hardly compatible with the UN’s green agenda. But Persson has decided to argue otherwise and H&M is committed to integrating the two goals.

Going Green from Within

Although H&M is ahead of the industry, its commitment to sustainability is nothing new. For nearly a decade, the company has worked to reduce environmental impact from its stores and products, both in electricity consumption and materials used. In 2015, 78% of all the electricity used in H&M’s operations came via renewable sources, with a commitment to increase this number to 100%.(3) To formalize that promise, H&M joined RE100, a global initiative that brings together companies such as Google, BMW and Nike, which are all committed to using only 100% renewable energy. But even with an overall reduction in electricity use, the company has been steadily increasing emissions on a per store sqm basis, leaving room for improvement in energy efficiency.

emissions-1

Beyond the company’s energy conservation efforts, in 2013, H&M established an initiative to allow customers to recycle clothing in nearly every store.  This initiative was started after studies revealed that one-third of clothing in the UK goes to landfills (WRAP) and textile waste occupies nearly 5% of all landfill space in the US (EPA) when actually ~95% of this material is reusable or recyclable.(4) Since then, H&M has collected over 22,000 tons of garments to give them a new life. In 2015 alone, the company collected 12,341 tons or the equivalent of 61 million t-shirts.(5) With current technology, H&M is able to create apparel that contains 20% recycled material without any impact on quality or longevity.

Cleaning Up the Whole Supply Chain

Although H&M has been able to make big changes in the production processes that it owns, the company is also trying to influence parts of the supply chain that are not directly under its control. One of the largest of these efforts is a push for water conservation in the production process. Water is a resource that is extremely sensitive to global warming, with changes in rainfall, surface temperatures, overall quality and aquasystems being the most visible.(6)

value-chain-breakdown

To lessen its impact on this critical resource and key element in its production process, H&M has engaged in several partnerships and initiatives. Currently, nearly 87% of H&M’s water footprint comes from its raw material production.(7) In recent years, the company has worked with the WWF in order to develop and build sustainable water consumption business practices. All H&M partners are being transitioned to a model compliant with the Business for Social Responsibility Water Group’s quality definitions (currently 75% compliant), with a focus on China and Bangladesh and a promise to transition to solely sustainable cotton by 2020. Additionally, the company has developed e-learning initiatives for its employees around the subject of water conservation, with 52,000 employees (35% of total) having taken the courses.(8)

(3)4 More Years

Although H&M is committed to reducing emissions through 2050 in compliance with the UN’s agreement and has made great strides already, “closing the loop” with recycled materials presents a large opportunity. Currently, H&M’s recycled materials still only comprise 1% of its total material usage and overall awareness of the sustainability campaign is low.(9) A combination of a campaign for awareness – of both H&M’s efforts and for consumer reduction of use – and a true push to use recycled products seems to also be the most direct fix to environmental impact. Among other things, this will reduce water consumption and chemical emissions associated with the growing, dyeing and processing of cotton and also reduce landfill waste on the back end. While this may be expensive in the short term, requiring additional R&D for more efficient ways to combine recycled and new cotton and to start going beyond just cotton to other material combinations, there is long-term potential for cost reductions. In an industry heavily reliant on natural resources with many disjointed touch points across the production process, H&M can set the example for others of how to reconcile profitability with sustainability.

(Word Count: 790)

Sources:

  1. United Nations, “Paris Agreement – Status of Ratification,” http://unfccc.int/paris_agreement/items/9444.php
  2. “Apparel company CEOs call for strong climate deal,” Ceres press release (Paris, France, December 3, 2015). https://www.ceres.org/press/press-releases/apparel-statement
  3. H&M Hennes & Mauritz AB, “Climate & Emissions,” http://about.hm.com/en/sustainability/sustainable-fashion/climate-emissions.html
  4. H&M Hennes & Mauritz AB, “Reduce, reuse, recycle – our Conscious Actions,” http://sustainability.hm.com/en/sustainability/commitments/reduce-reuse-recycle/about.html
  5. H&M Hennes & Mauritz AB, 2015 Sustainability Report, p. 92, http://sustainability.hm.com/content/dam/hm/about/documents/masterlanguage/CSR/2015%20Sustainability%20report/HM_SustainabilityReport_2015_final_com_5.pdf
  6. EPA, “Addressing Climate Change in the Water Sector,” https://www.epa.gov/climate-change-water-sector
  7. H&M Hennes & Mauritz AB, 2015 Sustainability Report, p. 100, http://sustainability.hm.com/content/dam/hm/about/documents/masterlanguage/CSR/2015%20Sustainability%20report/HM_SustainabilityReport_2015_final_com_6.pdf
  8. H&M Hennes & Mauritz AB, 2015 Sustainability Report, p. 106, http://sustainability.hm.com/content/dam/hm/about/documents/masterlanguage/CSR/2015%20Sustainability%20report/HM_SustainabilityReport_2015_final_com_6.pdf
  9. H&M Hennes & Mauritz AB, 2015 Sustainability Report, p. 93, http://sustainability.hm.com/content/dam/hm/about/documents/masterlanguage/CSR/2015%20Sustainability%20report/HM_SustainabilityReport_2015_final_com_5.pdf

Previous:

Monsanto: Problem Solver or Problem Creator?

Next:

Malaria: A Hot Mess in a Hot World

3 thoughts on “#ImWithH&M

  1. I found your post very interesting, particularly because it is very noticeable that H&M is leading the industry towards sustainable practices and I share your skepticism of the ample room left to improve. Nevertheless, I remain far more critical on H&M and the entire Fast Fashion industry because how are you going to reconcile a mission of selling more and more product every year, reducing the time a consumer takes to purchase new clothes (increasing frequency), but at the same time, trying to remain sustainable? It appears completely contradictory, especially with the volume and scale that H&M manages. The effort that H&M is putting into recycling used clothes is key to achieve their sustainability mission, nevertheless, if H&M wants to significantly reduce their overall footprint in the environment they should reduce the volume they’re managing. Of course, to ensure profitability levels are maintained this has to be done in a smart way, but my point is, is this a sustainable business model? Right now, it appears that it isn’t.

    Please see links below for articles supporting this point of view:
    http://qz.com/380055/hms-sustainability-report-hides-the-unsustainable-reality-of-fast-fashion/
    http://sweden.closettour.com/ideas/bartlett.html

  2. Great article, however it makes me wonder whether there is even a future for the fast fashion industry. While I commend H&M for its sustainability efforts, I question whether fast fashion’s business model fundamentally stands in opposition of creating more sustainable efforts. After all, the reason why this industry exists is because consumers want clothing that is cheap enough that wearing it once or twice is enough to justify purchasing it. If H&M moves towards 100% recyclable clothing, how much will that increase its costs and retail prices, and will consumers be willing to pay a premium for that?

  3. Really interesting read, thanks Asafina! I’m really interested to understand how H&M will really be using recycled cotton going forward. I wonder if this is just a marketing gimmick? Given that most of the clothing is manufactured in Asia, and (I assume) most of the recycled clothing is collected in the Western countries, it must be prohibitively expensive to transport old clothes back to factories to use in production of new clothes. Trying to do this at scale must be very expensive, and in a competitive landscape (especially as H&M expands into more developing countries) I can’t see how they can manage this going forward.

Leave a comment