Climate Q&A: Kim Hellström on H&M Group’s approach to reducing emissions

What do you mean by becoming climate positive?

This means reducing more greenhouse gas emissions than what our whole value chain emits. In short, it’s about taking responsibility for the emissions that we are the source of, then going the extra mile and doing even more than than that.
When we made our promise in 2016 (to become climate positive by 2040), I’m quite certain that this was the most ambitious goal out there. Because we committed to becoming climate positive throughout our whole value chain. That means everything, from raw materials to our customers’ use of our products, is included.

How will H&M Group become climate positive, and is your approach reliable?

For us, it’s all about credibility – that’s the absolute key. I don’t wish to criticize those who plant trees, but if we start claiming that we are climate positive through planting trees, that’s just not credible. Planting trees is not carbon reduction; it’s carbon storage.

We know that we are part of an industry that is responsible for 8-10 per cent of all greenhouse gas emissions yearly. We acknowledge that we are a part of the problem and we are determined to change that around to become a part of the solution. First by doing our part, but then the whole industry also needs to change.

When we set our goal in 2016, we did not know exactly how we would reach it. I think that’s also a sign of leadership: trying to stick your nose out a little bit and to be in the forefront. We still don’t have all the answers, but we are getting much closer to solving this puzzle.

I’d like to point out that this is a complex field outside our core business. Our expertise is clothes, therefore we always try to align with reality outside our sphere. We avoid creating our own claims on where we are and where we need to be.

That’s why it’s very important for everything we do – each decision we make, every strategy we set – to be based on science. And science is clear: decarbonization of the economy at a speed never seen before is what we need to achieve as a planet. We need to play our part in making this happen.

Since we base our strategy on scientific data (connecting it to the 1.5-degree warming target, for example), as long as we have the scientific community’s backing, I would definitely consider our approach to be reliable. But of course, we are up for debate and open to criticism and discussion…

Every company is on its own journey, with limited resources and its own specific kind of complexity, and we must be understanding of that. We have all reached different points in our journeys.

With H&M Group´s size and scale, we need to be at the forefront, supporting other companies in their journey. This is of course aimed at our supply chain, but it includes cooperating with our competitors.

What is H&M Group doing to actually reduce carbon emissions (rather than offsetting: reducing them to compensate for emissions made elsewhere)?

To me, it’s a matter of managing resources. All of our focus should be on reduction. If you gave me one dollar, I would always put that whole dollar towards actual reductions in emissions and not try to compensate for them or store them in some way.

For now, we are focusing our resources towards reducing our emissions. Some companies are offsetting their emissions, but it would be challenging for a company of our size with such a huge carbon footprint to try to divert attention from that by working with offsetting.

We have chosen “carbon law” (halving our emissions every 10 years) as a reference point to align with the 1.5-degree trajectory and Paris Agreement. Once we have managed to turn our emissions around and are in line with the pace of reductions needed according to the scientific community, then we will be able to claim that we have done our part. Only then will we be part of the solution rather than remaining part of the problem.

If at that point, we choose to do even more, we can begin to think about activities that can take us even further and achieve negative emissions. Eventually, we might then be able to claim that we are a climate-positive company.

Where will you offset?

We focus on energy efficiency because the best energy is the energy that is not used at all. Then, all the energy used in our supply chain has to come from 100 per cent renewable sources.

Even if we do everything we can in these areas, I know that there will be unavoidable emissions for different reasons – and these we have to address through some kind of compensation. At some point, we will have to manage our unavoidable emissions with carbon sinks (methods to capture carbon dioxide) as a way of offsetting.

We will develop and communicate our strategy for carbon sinks and offsetting during 2020, defining what we see as good enough. We are currently in close communication with WWF and the Science Based Targets initiative (SBTI9) on this topic and will adjust to their guidance. They are experts in the field, and we listen to them.

Offsetting is an attempt to balance or compensate for your bad deeds with good deeds, and it’s practised outside a company’s supply chain. Here’s an example: I might have a factory in Bangladesh that is emitting 10 tonnes of carbon dioxide a year. Then I plant 2,000 trees in Africa to store that amount of carbon dioxide from the atmosphere. That has no impact on Bangladesh, my factory, my supply chain or my product. But from a mathematical, theoretical point of view, I could claim that if these trees stand for 40 years, they will store 10 tonnes of carbon dioxide, taking my net emissions to zero. But the problem is, who will check up on the trees every year? How do I know that they won’t be chopped down in five years? And if they are, what do I do then? Plant new trees? We need better guidance and it is coming soon.

What about insetting versus offsetting? 

You can also practise insetting. That’s what I want us to do, rather than offsetting. Because you should sweep around your own front door first. Insetting is a way of addressing a company’s carbon footprint within its supply chain.

You can invest in something that decreases your future emissions. You might invest in a wind park in Bangladesh, for example, then sell the renewable energy produced to your supply chain. If we can go in and support the construction of such a wind park, so that the total percentage of Bangladesh’s grid becomes 1 per cent greener, that would be a long-term reduction in emissions from our supply chain. Then we would truly be decreasing our future emissions. That’s what it’s all about. Because once you have put carbon into the atmosphere, it will always exist. Then you can store it in a tree or a sweater or whatever… but it will still be there if you don’t Push it back it down into the ground.

So it’s not just about giving money to companies that can plant trees – that’s just treating the symptoms, not the disease. There’s nothing wrong with planting trees if you’re a consulting company and the only emissions you emit are from the fan on your desk. You can buy renewable energy and incentivise your employees to take the subway instead of the car. If you want to do more, great – plant trees! But for us, as long as we’re pouring out carbon into the atmosphere through our supply chain, we need to address the problem. As a company that takes responsibility for our emissions, we must recognise that this is where our focus needs to be. Otherwise, it would be a bit like pouring oil into the Atlantic and planting trees in Africa and stating, “We’re a sustainable company”.
 

How does being climate positive affect the supply chain?

First of all, we do not claim to be climate positive; we want to become climate positive.

I want people to focus on the problem: and the problem is that we’re buying from producers that use coal, gas and oil as energy sources.

H&M Group currently emits 18 million tonnes of carbon emissions a year. Raw materials account for 8-9 per cent of these emissions. These emissions come from land use and the way farmers treat the soil as well as the energy used when chemical companies produce and transport pesticides and fertilisers. The tier-two fabric production part of the process accounts for the majority of our emissions. More than 60 per cent of these come from boilers that generate heat for the water we use for washing, steaming and dyeing fabrics. Depending on the country in question, these boilers are powered by coal, gas or the burning of rainforest products. Meanwhile, our tier-one direct suppliers use electricity from grids fed by coal-based power plants.

We need to change the core of our industry, transforming the way everything is produced, transported and used by our customers. We need to transition from a linear business model (where raw materials are dealt with in an inefficient way) to a circular one (characterized by minimal resource use, waste and emissions). That will, of course, have a huge impact on the supply chain.

And how does it affect fashion (in terms of more recycling, and less fast fashion)?

Becoming climate positive will mean the introduction of an array of new business models, including rental, re-use and re-selling – which we have already initiated. Recycling is just one part of becoming a circular industry – it’s only the final step of full circularity.

A circular business starts with the design stage. It includes the choice of recycled rather than virgin raw materials, the production process and also the way you help the consumer to care for the products.

We need to educate our customers on clothing care (washing garments at lower temperatures, for example), and cooperate with detergent and washing machine manufacturers to find optimal solutions.

People will continue to want to express themselves individually, and social media enables trends to change within ever shorter time spans. We want to be where our customers are, helping them to express themselves through fashion at affordable prices. I really don’t see the speed of fashion as the issue; it’s badly produced fashion that’s the problem.