Sweden’s H&M Group is investing in Bangladesh’s first offshore wind undertaking, a utility-scale set up being developed by Copenhagen Infrastructure Companions. Bangladesh is house to many factories that sew the retailer’s clothes.
H&M, together with Danish retailer Bestseller, will co-invest unspecified quantities as a part of a $100 million company pool being organized by Copenhagen Infrastructure Companions and the International Trend Agenda, a nonprofit that encourages vogue manufacturers to undertake climate-friendly enterprise practices. Different firms are being inspired to hitch the undertaking, which may start operations by 2028.
Trend firms who’ve pledged an emissions discount of not less than 50 % by 2030 and internet zero by 2050, and that may put not less than $10 million into the undertaking, are eligible to take part, Ulrika Leverenz, head of inexperienced funding for H&M Group, advised GreenBiz.
“For us, it is a nice instance of how a collaborative strategy on sustainable financing options and coverage work can go hand in hand to beat industry-wide challenges,” stated H&M Group CEO Helena Helmersson, when the deal was introduced throughout COP28.
‘A pioneering effort’ within the vogue {industry}
An estimated 70 % of vogue {industry} emissions come from upstream actions, together with manufacturing, and lots of of these operations at the moment depend on coal, petroleum and gasoline for his or her electrical energy, in response to International Trend Agenda.
Bangladesh accounts for near 8 % of world clothes exports, making it the third-largest exporter of those items after China and the European Union. The undertaking, with a deliberate capability of about 500 megawatts, can be the primary utility-scale offshore set up for Bangladesh. It goals to provide 40 % of the nation’s energy by 2041. As soon as accomplished, the set up would minimize the nation’s annual emissions by a projected 725,000 metric tons, in response to the developer.
“That is actually a pioneering effort. Whereas it’s develop into extra widespread for different industries to take an strategy that’s extra vertically built-in, the style {industry} doesn’t have that very same historical past,” stated Nicole Rycroft, founder and govt director of Cover Planet, which collaborates with attire firms on provide chain sustainability technique.
Most vogue firms have some operational footprint in Bangladesh, stated Rycroft. “What’s essential is that this helps coal energy be decommissioned,” she stated. “It helps the grid at a bigger stage. This can be a provide chain that’s reworking in real-time.”
H&M is one of many world’s largest “quick vogue” manufacturers, a time period used to explain attire that strikes rapidly from retail to manufacturing to fulfill fast-moving type developments. The corporate reported Scope 3 emissions of 5.65 million metric tons in its newest sustainability report, for 2022. (Scope 3 contains emissions from the corporate’s provide chain.) That was a 3 % discount from 2021. Its purpose is to realize a 56 % discount in Scope 3 emissions by 2030, primarily based on a 2019 baseline; as of 2022, it had managed a 7 % minimize.
Copenhagen Infrastructure Companions, primarily based in Denmark, is the most important devoted fund centered on renewable power initiatives — particularly wind — in undeveloped “greenfield” areas; up to now it has raised about $28.4 billion for these actions.
H&M steps up financing of provide chain sustainability
H&M’s deliberate wind farm funding builds on the corporate’s Inexperienced Trend Initiative, which gives technical assist and financing to suppliers who wish to cut back their emissions. In late November, the corporate prolonged these efforts with the creation of a financing program in collaboration with Southeast Asia’s largest financial institution, DBS. The useful resource gives loans on favorable phrases to suppliers who wish to displace fossil fuels.
H&M has funded 17 initiatives as of January 2023, with a possible annual discount of 190,000 metric tons yearly, stated Leverenz. About 50,000 metric tons are attributable on to H&M’s manufacturing, she stated.
One in every of H&M’s producers in India, Raj Woollen, labored with H&M in early 2023 to finance the set up of photo voltaic panels, energy-efficient motors and water conservation applied sciences. The undertaking was “a profitable mixture of knowledgeable power evaluation, shut assist in choosing probably the most appropriate know-how options, and a sexy financing mannequin,” stated Sumeet Nath, managing companion for Raj Woollen.
One other metric to observe: In 2022, 70 of the corporate’s suppliers used on-site coal boilers, down from 91 in 2021.
Any provider in good standing can apply for H&M financing, Leverenz stated. “We think about the provider’s monetary state of affairs, the innovation stage of the know-how, our enterprise share within the unit, and the provider’s personal want,” she stated.
Its two priorities are “large initiatives with large suppliers aiming for max affect,” and people searching for to deploy modern know-how which may initially be dangerous however may present longer-term advantages, Leverenz stated.
