H&M Group and EY release industry white paper revealing how financing supply chain decarbonisation protects business value and delivers long-term returns

The cost of inaction on climate change is simply too high – for the planet and for our industry. CFOs have a fiduciary responsibility to safeguard long-term business resilience, not just short-term profitability. As CFOs, our role is not to debate whether sustainability targets should be met, but to ensure how they are delivered. This requires a conversation combining cost efficiency and value creation: reducing risk, strengthening resilience, and safeguarding long-term corporate value.

Adam Karlsson, CFO H&M Group

The paper, Accelerating Fashion Decarbonisation – An Efficient Approach to Unlocking Corporate Value and Financing the Supply Chain Transition, provides insights on how to accelerate sustainability investment in the fashion industry by advocating how a scaled approach to supporting and enabling financing for supply‑chain decarbonisation may be structured and supported. It furthermore seeks to support change by sharing solutions and best practices that demonstrate the ability of fashion brands to add and protect corporate value through investing in this area – augmenting the business case for investment, collaboration and scale. In doing so, it highlights sustainability not only as an environmental imperative but as a strategic value driver, enhancing operational resilience, reducing long-term risk exposure, and improving the financial performance and competitiveness of fashion value chains. The actionable insights show how financial tools, governance, and partnerships can drive measurable progress on scope 3 emissions, boost supply-chain resilience, and enhance business performance. Investing in decarbonization solutions not only meets environmental imperatives but also strengthens operational resilience and competitiveness.

This paper serves as a resource for finance leaders, offering practical guidance on sustainable finance solutions for decarbonising supply chains with different risk sharing and return profiles. It does not prescribe a single model but offers a framework to translate climate ambition into executable investment pathways.

Fashion has a unique opportunity to work together to solve these challenges. We are seeing growing momentum for industry-wide collaboration and an openness to explore new financing models that can help accelerate the green transition. Many industry leaders already recognise that supply-chain decarbonisation not only strengthens resilience but also builds long-term confidence, and they understand that this is the moment to act. The case studies in this paper show that the foundations are already in place, and the ongoing initiatives signal that this is the time to strive for greater impact and global collaboration. Fashion brands must be active stewards of their value chains, not just customers of them.

Anna Ryott, Nordic Chief Impact Officer and Partner, Ernst & Young AB

Investing in climate mitigation today can help to reduce long-term costs and business risk. CFOs can play a critical role by embedding climate risk into capital allocation decisions and championing collaborative financing models.

Clair Smith, Clair Smith, Head of Sustainable Trade Solutions at HSBC

Crucial to all of this will be close collaboration between brands, as well as with other organisations such as NGOs, financial institutions and governments. H&M Group and EY aim to inspire more CFOs, finance leaders and fashion brands to engage with the insights and opportunities outlined, and see a clear opportunity for fashion brands, suppliers, financial institutions, NGOs and policymakers to join forces. The white paper offers the opportunity to use these tools in capital allocation, risk management, and collaboration, to accelerate decarbonisation in a way that strengthens both individual business resilience and the long-term resilience of the industry.

By acting together, they can build the shared infrastructure, standards and financing models required for improved, resilient and future-fit supply chains.