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H&M, ESG, and the evolution of its business model

Recently, The Future of Fashion by Vogue Business podcast spoke with with Pascal Brun, Head of Sustainability of H&M to find out about the environmental, social, and corporate governance “ESG” efforts that H&M are implementing into the company in order to become a more sustainable company.

#NOFILTER has summarised the key take aways for fashion lovers wanting more knowledge about the life cycle of H&M’s clothing lines, and so they can make meaningful and informed decisions about where their clothes are bought from (or not bought from). Let us know your thoughts on fast fashion and H&M’s sustainability efforts by emailing info@nofilter-media.com.

H&M’s key focus areas:

  • chemical use
  • emission reductions

Pascal says that “H&M are innovators in technology and are early adaptors in recycling technologies. Fast fashion is about reacting fast on trend and nothing else. Fast fashion can be sustainable, the question is how can fast fashion becomes sustainable, and how it is enforced. The business model must depart from the traditional linear concept and become circular.”

The H&M in Stockholm is the first to launch Looop, a garment-to-garment recycling system – a container-sized machine which recycles old textiles into something new. (Read more about Looop here).

Where does sustainability sit within H&M?

H&M’s targets

H&M has targets on the team, the organisation, and performance of H&M’s suppliers.  It works together with manufacturing partner, policy makers, governments, NGOs, and advocacy companies in order to make a change faster.

Data H&M collects

The primary environmental data H&M analyses is carbon footprint impact. On social data, H&M looks at social aspects for workers, including wages, working environment, and human rights.

In the past 10 years H&M has been involved with the Higg Index, a suite of tools for the standardized measurement of value chain sustainability, and it is central to the SAC’s mission to transform businesses for exponential impact. What is important, however, is that the industry work together and measurer up against the same criteria. Pascal stresses that the next step is to make the data transparent. Here is where change can be made and when customers can make informed decisions.

However, Ayesha Barenblat, founder, and CEO of Remake disagrees. She says that it’s foolish to allow the fashion industry to decide what to measure. (Remake it a company comprised of fashion lovers on a mission to make the industry a sustainable and inclusive across the three pillars of their work: education, advocacy, and transparency).

Pascal somewhat agreed and emphasised that the data needed to be credible. He said “The right party needs to verify [the data]. In terms of fair wages, it is the job for the trade unions to work with the employees to enable a fair system and get it right.” H&M have acted on this and are now involved in the ACT initiative – Action, Collaboration and Transformation. This is how H&M’s employees have a voice on their wages.

What is ACT – Actions, Collaboration, Transformation

The formation of ACT (Action, Collaboration, Transformation) represents a significant milestone on the journey to fair wages. ACT is a ground-breaking coalition of 20 global brands, including H&M Group, and IndustriAll Global Union. The group’s mission is to transform the garment, textile and footwear industry and achieve living wages for workers through collective bargaining at industry level. (Read more here)

What is the role of the customer when making sustainable practices successful?

Pascal says “Firstly, customers play key role and that is why transparency is a key matter. H&M’s visons is to put the impact of the products and suppliers into the customers eyes. This is the first point of entry where the customers play a key role. Secondly, customers will play a key role in understanding the products they are buying, and the impact they can make by extending the life of their garments.”

Pascal stresses that H&M are moving away from a linear business model and transitioning into a circular model. He says “The entire business model focuses now on customer understanding how to repair, mend, and how to keep products longer. They can learn how to rent products, how to buy second hand. This is the circular business model which is crucial for customers to step into. Here, H&M have a lot of work to do in terms of education. It is on H&M to make these choices available for the customers.”

Where has H&M got in achieving a circular business model?

H&M has taken a holistic approach to circulatory. The five elements of the circular business model consist of:

  1. Design
  2. choice of material (Conscious collections) –  read more here
  3. educating consumers
  4. production process – read more here
  5. end use (closing the loop/ recycling)

H&M has launched rental in the Stockholm stores. The H&M group has also launched Resell in Sweden and Germany. Resell is a digital space that provides a platform to buy and sell pre-loved clothing. Pascal says that customers demand sustainable ways of re-inventing their wardrobes.

How big does Resell need to grow to offset new production volume?

Pascal suggests that it is unknown at this stage and may never have a true figure. “Resell numbers are tough to obtain as it is a consumer-to-consumer business model” says Pascal.

He goes on to say that H&M’s goal is to become climate positive by 2040 – decreasing more emissions than admitting.

Does H&M hold itself accountable for the current climate?

Pascal says “The new circular business model will compensate from the decoupling (decoupling represents the creation of gaps). Today H&M have 64% more sustainable material and recyclables. H&M aim to be 100% by 2030. Microplastic and polyester remains a problem. But the answer is not to have recyclable polyester. It is to have a fibre to fibre process.

How does H&M educate its customers?

H&M are going to university getting the word out there. It is using social media platforms at the H&M website – read more here

There is also a reward-systems in place to incentivise and encourage customers to be more sustainable.  Customers that choose last mile delivery and bring their own carrier bags will get extra points.

#NOILTER loves H&M. The brand appears to be doing their part and helping to make a change and really walking the walk down the catwalk of sustainability.

Listen to the full podcast episode of H&M head of sustainability Pascal Brun: ‘There is an urgency’ for change in fashion here.

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