Fashion and design brands company H&M Group announced today a series of funding initiatives aimed at decarbonizing its value chain, including support for suppliers to shift to clean energy and improve energy efficiency.

The company said that it has implemented an annual budget of around SEK 3 billion (US$287 million) for projects to reduce emissions across its value chain. Targeted areas of investment will include phasing out coal and increasing the share of sustainable materials.

H&M has set a goal to achieve net zero emissions by 2040, and the company recently set interim targets to reduce absolute Scope 1, 2 and 3 emissions by 56% by 2030.

As with most fashion retailers, Scope 3 value chain emissions, or those outside of a company’s direct control, account for the vast majority of the company’s emissions footprint. According to H&M’s 2021 Sustainability Report, Scope 3 makes up nearly 99% of the company’s emissions. Of these, over 60% derive in supply chain areas including fabric production, garment manufacturing, raw materials and transport.

The company highlighted several of the initiatives it is pursuing in order to address its carbon footprint and reduce value chain initiatives. These include supporting fashion supply chain initiatives aimed at ramping clean energy use, energy efficiency and sustainable materials, such as the Green Fashion Initiative and its recent participation as a lead funder of the $250 million Fashion Climate Fund, the initiation of a Sustainable Supplier Facility with consulting firm Guidehouse to facilitate decarbonization-related funding for suppliers, and the implementation of an internal carbon price to drive behavioral change in buying, design, merchandising, production and logistics.

H&M has also signed a multi-year carbon removal agreement with Direct Air Capture provider Climeworks for the removal of 10,000 tons of CO2.

Leyla Ertur, Head of Sustainability H&M Group, said:

“We are dedicated to contributing to the limitation of the global temperature increase to 1.5 °C and keeping our climate strategy aligned with the latest science-based target setting frameworks is crucial for us to create impact beyond our own organisation and value chain.”