The group shares a full history of Scope 1 – 3 emissions over the last 3 years including a full category breakdown of Scope 3 emissions in CDP Disclosure,[38] and discloses Tier 1 and a partial list of Tier 2 suppliers. [39] However, H&M Group does not yet disclose data on its supply chain energy and electricity consumption and sourcing, including a breakdown of renewable electricity and thermal energy by type. The company should prioritize this disclosure in order to show accountability to its targets.

H&M Group’s 2023 emissions continue to show a steady and effective decline since their 2019 base year,[40] which shows the company to be on track to reduce emissions by 55% by 2030, which is commendable and shows the results of effective decarbonization programs. 

Despite being the only brand with a 100% renewable electricity target for its supply chain, the company does not provide evidence of its progress, and therefore does not score in this area. 

Although H&M Group does report examples of coal phase out, including a Pakistani denim manufacturer supported by GFI to phase out a 10-tonne coal boiler, [41]the company does not provide an overview of its progress on phasing out coal and transitioning its thermal energy. Neither does it report the extent to which its supply chain has transitioned to biomass over electrification.

Step 1: H&M Group provides evidence on how it is providing non-financial support to suppliers on energy efficiency, renewable electricity and coal phase out measures. This includes its partner commitment, supplier sustainability performance index, energy efficiency team, training on SBT, and more. It states it targets to improve energy efficiency by 20-25% by 2030 in suppliers that cover 80% of Tier 1-2 emissions.[42]

Step 2: Through the Green Fashion Initiative, it claims to support suppliers financially in replacing fossil fuels, and is the only brand assessed to offer this kind of financial support. As of January 2023, it recorded 17 approved projects with a potential annual reduction of 50,000 tonnes CO2e in H&M Group’s supply chain, and an additional reduction of approximately 140,000 tonnes beyond the company’s own value chain. [43]It is important to note that H&M Group emphasizes that returns are measured in emissions reductions. H&M Group is also developing a facility to enable brands to co-invest in supplier decarbonization, an essential part of an effective industry-wide transition.[44]

Step 3: The company does require climate requirements to be included as a condition of contracts, including actively mitigating its impacts on climate change and air quality by continuous improvement in energy management and efficiency. H&M Group has also set cut off dates for onboarding new suppliers with coal boilers. 

H&M Group provides support for a coal phase out by 2030, including financing the transition away from coal for suppliers. In correspondence with Stand.earth, H&M Group refers to it as a transitional on-site energy source and uses suppliers in Asia that burn biomass. [45]

H&M Group has demonstrated significant levels of advocacy with governments within its supply chain in support of legislative changes to improve access to renewable energy. Key examples include engaging with the Bangladesh government on its National Solar Roadmap to open access to Power Purchase Agreements, and reports many other examples in its CDP disclosure to improve electricity grid connectivity in its markets of production.[46] H&M Group also reported engagement on EU policies and legislations such as the Energy Efficiency Directive (EED), Renewable Energy Directive (RED), EU strategy for sustainable and circular textiles and more.[47]

In a clear example of direct financing, in December 2023 H&M Group announced that it was investing in a proposed 500MW off-shore wind project in Bangladesh, designed to meet demand by suppliers in Bangladesh’s fashion supply chains. [48]In 2023, the company also issued a €500 million sustainability-linked bond with the aim of financing the accelerated transition to recycled materials and reduction of GHG emissions (Scope 1, 2 and 3) in its supply chain.[49]

Supply Chain Movement

​​From the 16 suppliers linked to H&M Group in the Supply Chain Map, 7 share details of their decarbonization plans. For instance, Makalot aims to reduce GHG emissions by 50% by 2030 from a base year of 2020.  A handful of these suppliers have set out renewable transition plans. For example, Pacific Jeans has the target to increase the ratio of renewable energy to 50% by 2030 from a base year of 2018 and Pratibha Syntex Ltd hopes to achieve this by 2025. 

In line with H&M Group’s coal phase out targets, Makalot has clear plans to ban the use of coal as a fuel at all operating locations by 2025 and says it is already phasing out coal fired boilers.