H&M Group launches collaborative financing solutions for climate action

H&M Group launches collaborative financing solutions for climate action
H&M Group and Southeast Asia's largest bank, DBS, have launched a green loan program to support the decarbonisation of fashion supply chains. The initiative aims to facilitate supply chain decarbonisation in the apparel industry. H&M representatives will attend the 28th Conference of the Parties of the UNFCCC (COP 28) in Dubai to participate in discussions on emerging policies and share innovative solutions. COP 28 is the highest decision-making platform on climate issues, bringing together leaders, experts, and civil society to address the global challenge of climate change and build on past successes.
“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 tackling 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”, says Ulrika Leverenz, Head of Green Investment, H&M Group.
To achieve net-zero CO2e emissions by 2040, H&M Group launched the Green Fashion Initiative. The initiative enables suppliers to invest in technologies to reduce energy demand and replace fossil fuels. H&M Group collaborated with DBS and Guidehouse to develop a finance tool that supports suppliers' GHG emission reduction activities. The program provides highly favorable financing terms and technical support from sustainability consultants to suppliers seeking to decrease their climate impact.
“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”, says Tan Su Shan, Group Head of Institutional Banking, DBS.
Earlier this year, a collaborative finance tool successfully funded a capital expenditure project for a manufacturer in India. The project aimed to reduce scope 3 greenhouse gas emissions by installing solar panels, energy-efficient motors, and water conservation technologies. The loan was provided to Raj Woollen, who used it to finance the project. The H&M Group recognizes the complexity and scale of the climate challenge and considers collaboration as a critical element of its climate action framework. Collaborative financing efforts are seen as the only way to achieve rapid change at scale. Existing models and those currently under development can create an ecosystem of solutions. However, brands and investors need to show more commitment to co-invest and share the financial responsibility of projects. This approach will provide more alternatives to support suppliers in their decarbonization journey.
Source: IANS