We can all acknowledge this past year has been a very unpredictable and challenging one. While we are hopeful for the future, our day-to-day existence is still very much affected by the impact the pandemic has on us all. Thanks to the efforts of our talented and committed colleagues, we have not let circumstances discourage us from staying true to our values, pursuing our goals and meeting our customers’ evolving needs.
Letter from our CEO
Although we have made good progress advancing our sustainability agenda, the last 12 months have further highlighted the importance of sustainability and the need to accelerate this work. We all need to play our part in transforming our industry into one that is genuinely built around circularity and social justice. While I know we have much work to do, I am inspired by what we have achieved so far and confident H&M Group can continue leading this change.
A key part of our transition to a more circular fashion future is to make sustainable products and services more accessible, inspiring and affordable to our customers. This will lead to both strengthening our current relationships with our valued customers as well as attracting new ones. It will expand the lifecycle of products whilst making our business more resilient as we move into the next decade.
During 2020 we have taken many positive steps. We’ve embraced new breakthroughs in fabric recycling technology — including the world’s first collection using the mixed-fibre textile recycling Green Machine, and the first commercial products made from Renewcell’s Circulose®. These innovations show that garment recycling can be scalable and commercially viable, bringing us closer to our new goal of using 30 per cent recycled materials by 2025. To help us reach this and other circular goals, we’re embedding the principles of circularity into the design process and continuing to test and scale pioneering materials — including some made from textile, plastic and agricultural waste. With the expansion of the second-hand platform Sellpy into new markets, and through launching new services such as COS Resell and Arket Rental, we are helping customers access and enjoy fashion in a more sustainable way.
We stand by our responsible purchasing practices and agreements with suppliers, and are in close dialogue with them in order to support their businesses during these uncertain times. At the same time, H&M Group’s updated wage strategy will take a localised approach to improving working conditions for the people in our supply chain. We’ve also had a big focus on advancing our inclusion and diversity work this year — including new partnerships, increased transparency, and improving representation across the business.
We are continuing to increase transparency around our sustainability plans and performance, as well as the sustainability credentials of our products. I’m particularly pleased we’re pushing forward with product transparency initiatives to help our customers make more informed purchasing decisions.
Furthermore, the highly successful launch of our sustainability-linked bond in February 2021 is testament to the appetite for sustainability-driven initiatives. Not only does this type of bond create another example of transparent commitments and incentives, it also contributes to the positive transformation of the fashion industry. The bond is linked to H&M Group meeting a number of sustainability targets, such as by 2025 reducing emissions from our own operations by 20 per cent. We are also committed to reduce absolute Scope 3 emissions from garment manufacturing, fabric production, upstream transport and raw materials by 10 per cent.
There’s much more to do, and our direction is clear. We’ll continue inspiring and building meaningful relationships with our customers, offering more sustainable products and scaling circular business models. We want to empower everyone to be able to express themselves, to be proud of who they are and the choices they make. But we can’t do this alone. We need to continue working with others and build deeper partnerships within and outside our business. Our work alongside close partners such as the Ellen McArthur Foundation, IndustriAll, WWF and the UN Global Compact, to mention a few, is vital to achieve this.
As we continue with and accelerate our own transformation with a new sense of urgency given how the world is changing, I’m excited for the year ahead. By being open to new possibilities and embracing collaboration and partnerships, H&M Group has the power to change something much bigger than ourselves. We want to achieve sustainable growth that makes a positive difference to people and the planet.