The H&M Group has launched a collaborative finance tool to help accelerate the adoption of green initiatives across its supply chain.
- Suppliers to the Group will get access to financing from DBS and technical support from sustainability consultant Guidehouse to embark on factory upgrades to decrease their climate impact.
- The programme will directly provide financing with “highly favourable terms” to suppliers for specific GHG emission reduction activities, as approved by the H&M Group.
The tool: The collaborative finance tool completed earlier this year the first successful transaction with a manufacturer in India to fund capital expenditures to reduce Scope 3 GHG emissions.
- With the support of the loan, supplier Raj Woollen financed the installation of solar panels, energy-efficient motors, as well as water conservation technologies to conserve resources and reduce carbon emissions.
The backdrop: The move, the Group said, was in line with its ambition to achieve net-zero CO2e emissions by 2040.
- Its Green Fashion Initiative enables supplying factories to invest in the technologies and processes needed to reduce energy demand and replace fossil fuels across the fashion industry.
- The H&M Group had identified collaboration as a cornerstone of its climate action framework and collaborative financing efforts as the only way to create rapid change at scale. Existing collaborative financing models and those currently under development have the potential to build an ecosystem of solutions.
- The Group is encouraging other brands and financial institutions to join its initiative and its COP28 delegation is looking forward to meeting stakeholders at the conference to continue the dialogue.
What they said:
H&M Group has been engaged in climate mitigation for years and we continuously push ourselves to demonstrate climate leadership within our industry. We see that our industry is committed to tackle its negative climate impact. But we also see that impactful climate action requires collaborative financing. For us, sustainability investments are not only a responsible approach but a strategic necessity for future success.
— Ulrika Leverenz
Head of Green Investment
H&M Group
Accelerating net zero for supply chains requires the rapid scaling of low-carbon technologies and new, innovative financing models to drive adoption. The collaborative finance tool is a prime example of how we can create impact for suppliers. DBS is excited to be harnessing our extensive network in Asia, in partnership with H&M Group, to provide access to sustainable financing in a practical way – by directly funding factory upgrades to help suppliers improve their energy efficiency and decarbonise.
— Tan Su Shan
Group Head of Institutional Banking
DBS
