Fashion and design brand company H&M Group has announced a green loan program in collaboration with Singapore-based financial services group DBS. This program aims to facilitate decarbonization in the fashion sector by providing H&M’s suppliers with access to financing from DBS, offering “highly favorable” terms for suppliers with specific greenhouse gas (GHG) emission reduction activities. Suppliers in the program will also receive technical support from sustainability consultant Guidehouse to undertake upgrades reducing their climate impact.
H&M Group has committed to achieving net-zero emissions by 2040, with interim targets of reducing absolute Scope 1, 2, and 3 emissions by 56% by 2030. The majority of the company’s emissions come from Scope 3 value chain emissions, which account for nearly 99%, with over 60% from supply chain areas such as fabric production, garment manufacturing, raw materials, and transport.
The green loan program is part of H&M Group’s broader initiatives, including the Green Fashion Initiative, a SEK 3 billion annual budget for value chain emissions reduction projects, participation in the $250 million Fashion Climate Fund, the Sustainable Supplier Facility with Guidehouse, and the implementation of an internal carbon price to drive behavioral change.
The program has already completed its first transaction with India-based manufacturer Raj Woollen, funding the installation of solar panels, energy-efficient motors, and water conservation technologies to reduce carbon emissions. Ulrika Leverenz, Head of Green Investment at H&M Group, emphasized the importance of collaborative financing for impactful climate action.
By FCCT Editorial Team
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