IFC, a member of the World Bank Group, and fashion retailer, H&M Hennes & Mauritz (H&M), launched a joint partnership to boost the use of clean, renewable energy in the garment sector, while also slashing greenhouse gas emissions.
Renewable energy already powers 96 percent of H&M’s own global operations, and this partnership aims to expand this climate-friendly approach to the independent garment factories that produce its fashions throughout the world. H&M products are manufactured by around 790 independent suppliers, indirectly creating jobs for around 1.6 million people, of whom about 65 percent are female.
H&M will partner with IFC to guide its strategic tier one and two suppliers in China, India and Bangladesh in adopting renewable energy solutions, thereby improving environmental sustainability within the H&M global supply chain. H&M and IFC will develop a platform for implementation of practical renewable energy solutions on the ground to achieve meaningful reductions in greenhouse gas emissions through adoption of clean energy sources such as solar, wind, and hydro power; an approach that will be initially taken in three countries of high importance to H&M but which can ultimately be replicated in other markets.
Climate change poses a fundamental threat to economic development, and per the World Bank, could push an additional 100 million people into poverty by 2030.
“H&M has an ambition to work with a climate neutral supply chain (Tier 1 and Tier 2) by 2030 and we see IFC as an important partner in this journey. IFC’s vast experience working with renewable energy and climate related topics in several developing countries will be very valuable in driving this agenda together with our business partners. We believe that this partnership will not only have a positive climate impact on H&M’s supply chain but also on the fashion industry as a whole” said Pierre Börjesson, Sustainability Business Expert - Climate Change and Water Stewardship, H&M
H&M is committed to a goal of 100 percent renewable energy usage in its own operations, and is one of the first companies in the industry to start setting climate-change and renewable energy goals along its value chain.
“Cutting greenhouse gas emissions is crucial for the environment, but importantly, this project will create a low-carbon roadmap that shows how it makes good financial sense for firms too,” said Milagros Rivas Saiz, Global Head Advisory at IFC.
IFC has a proven track record of supporting the development of renewable power. Since it started tracking climate-related investments in 2005, IFC has committed more than $7.6 billion for renewable energy from own account. This includes almost $5 billion in large-scale on-grid renewable energy generation, $500 million in renewable energy component manufacturing, and $2.2 billion through financial intermediaries and other sectors.
IFC Senior Energy Specialist Jeremy Levin added “In several countries distributed solar power can be cheaper than grid-provided power, and is far less costly for those suppliers who have to rely on expensive diesel generator sets to meet their power needs. This roadmap will provide direction on how to capture these savings.”
IFC, a member of the World Bank Group, is the largest global development institution focused on the private sector in emerging markets. Working with 2,000 businesses worldwide, we use our six decades of experience to create opportunity where it’s needed most. In FY16, our long-term investments in developing countries rose to nearly $19 billion, leveraging our capital, expertise and influence to help the private sector end extreme poverty and boost shared prosperity.
H&M Hennes & Mauritz AB (publ) was founded in Sweden in 1947 and is quoted on Nasdaq Stockholm. H&M’s business idea is to offer fashion and quality at the best price in a sustainable way. In addition to H&M, the group includes the brands & Other Stories, Cheap Monday, COS, Monki and Weekday as well as H&M Home. The H&M group has more than 4,300 stores in 65 markets including franchise markets. In 2016, sales including VAT were SEK approximately 223 billion. The number of employees amounts to more than 161,000.