Circularity and our value chain

The climate crisis and resource depletion are two of the biggest challenges facing the planet. A linear, unconstrained model of production and consumption is not sustainable, and we are determined to lead our industry towards a better, circular, way of working. This means driving change throughout our business and our entire value chain.

A circular business model maximises resources and minimises waste. In the conventional linear business model — take, use, discard — resources are used to make products which are then discarded after use. Less than one percent of materials used in industry are recycled. In the circular model, resources stay in use for as long as possible before being converted into new products and materials, resulting in a reduction in waste and harmful impacts.

We are implementing a circular mindset into every step of our value chain (see below); from designing products and packaging to enabling our customers to care for — and later, part with — our products in a sustainable way. It’s why most of our brands offer in-store garment collection and why we started our Take Care initiative, offering inspiration, guidance and services to prolong the life of our clothes. We’re always exploring new ways to expand our circular approach, from introducing clothes rental and pre-owned options, to investing in fabric recycling and innovative low-impact materials.  

And of course, a business model like this can only be completely circular if it’s powered by renewable energy. We are moving closer to our goal to use 100% renewable electricity throughout our operations.  Ultimately, the plan is to achieve a climate positive value chain — one that creates a net positive impact on the climate by 2040. And our circular approach will be one of the most important tools to achieve this goal. Our circular strategy also applies to buildings and the interiors of stores and offices.

We have set a vision to become 100% circular in everything we do.

Making fashion circular is good for business because it boosts efficiency and cuts waste. We are working closely with the Ellen McArthur Foundation and its programmes Make Fashion Circular and The New Plastic Economy Initiative

Read more about our many collaborations

A value chain is the full range of activities it takes to make, market, use, repair, reuse and recycle a product – with value added at every link in the chain.

Our value chain is connected to countless people, communities, ecosystems and other businesses around the world. Our social, environmental and economic impact is significant and far-reaching, and we want it to be as positive as possible.

Our strategy is guided by our commitment to use the size and scale of our business to leverage positive change in our industry. This ranges from manufacturing techniques to respecting human rights. 

Check out the map to see where the different stages of our value chain take place. 

Design
Sustainability is a natural part of everything we do. The designer’s drawing board is the first step towards a mindful fashion choice. Choosing the material, style, quality, and recyclability — these decisions will affect the environment and people across our value chain. Our testing of circular design principles currently covers less than 1% of our total assortment but is an important step towards formalising our circular design framework. 

 

Raw materials
By 2030 at the latest, we will only source recycled or other sustainably sourced raw materials. Processing raw materials such as cotton, is often associated with concerns for working conditions and intense water and chemical use. By choosing sustainably-sourced cotton and other materials, like recycled polyester or lyocell, we can significantly reduce impacts.  

 

Fabric and yarn production 
From making yarn to final fabrics, there are concerns regarding water, chemicals, carbon emissions and working conditions. Generally, we do not have direct business relationships with mills, but work with organisations such as WWF and the Swedish Textile Water Initiative (STWI) to help them improve their sustainability performance. We are integrating all identified fabric and yarn mills involved in making our products into our Sustainable Impact Partnership Programme. We operate one of the strictest Chemical Restrictions List in the industry. 

 

Garment production 
H&M group does not own any factories − instead we work with independent suppliers. Many of our products are made in some of the world’s poorest countries, and garment production is often the first step out of poverty for many of these countries. Together with our suppliers, we have made great improvements in developing better social and environmental standards at the factories. Achieving fair living wages, reducing overtime and ensuring workplace safety are key focus areas. 

We want to encourage dialogue between factory owners and textile workers, which is why we invest to enable democratically elected workers’ representation and collaborate with the International Labour Organization (ILO), IndustriALL Global Union and Swedish trade union IF Metall

Back in 2017, the total water consumption of the factories we use and their processing facilities amounted to 295 billion litres (including production for non-H&M Group brands). We are working together with our suppliers to reduce our water consumption by 25% per unit produced by 2022. 

 

Transport
Upstream transport represents around 3% of the greenhouse gas emissions in a garment’s lifecycle. By choosing the right modes of transport and placing orders closer to sales markets, we can reduce this impact even further. We use ships and trains to transport over 90% of our products from the suppliers to our warehouses. We also set standards to encourage the transport companies we use to reduce their social and environmental impacts and collaborate on solutions such as electrical trucks for last mile delivery in China and delivery to customers by bike in the Netherlands. 

 

Sales
We have 5,076 stores across 74 sales markets and 51 online markets. As we grow, enter new markets and employ new people, we need to make sure we live up to our values across the organisation and ensure an inspiring and healthy working environment for our colleagues. For example, 96% of the electricity used in our stores, offices and warehouses comes from renewable sources. We ensure the privacy of personal data and we advertise responsibly.   

 

Customers
Caring for clothes at home, such as washing and drying, accounts for 13% of a garment’s total carbon emissions. We want to inspire our customers to be conscious of the way they care for their clothes. For example, washing garments at 30°C instead of 60°C and hanging the laundry to dry cuts energy use — and saves money. As part of our H&M Take Care initiative, we offer guidance online as well as repair services in selected stores.  

 

Reuse and recycling 
Around 73% of all discarded textiles end up in landfill or being incinerated. Less than 1% is recycled to make new clothing. Think about the natural resources that could be saved if it was possible to reprocess the textile fibres in old clothes — and create new fashion pieces. We consider it our job to make it as easy as possible for our customers to recycle, regardless of brand or condition. It’s why most of our brands offer garment collection and in 2019 around 29,000 tonnes were collected for recycling and reuse — equivalent to 145 million t-shirts. We’re also testing new ways to prolong the life of garments through reuse by investing in re-sale, restoring damaged garments and offering rental services. Read more about these new business models. 

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