The Tamesis
As H&M set out its roadmap to decarbonize its supply chain, the challenge was clear: the vast majority of fashion’s emissions are upstream, in a network of dispersed factories that are not owned by the brand, making it difficult and expensive to move away from fossil fuels. Its latest sustainability report provides an early indication of whether its ambitions are translating into measurable progress.
In 2025, H&M’s scope 1 and scope 2 emissions were 41% lower than the 2019 baseline, mainly due to the increase in renewable electricity (renewable electricity accounted for 95% of the group’s supply chain in 2025). At the same time, Scope 3 emissions, which account for the majority of the industry’s emissions, fell by 34.6%. Leyla Ertur, Chief Sustainability Officer of H&M Group, attributes this to “investments in material innovation and our activities to reduce energy and water needs in our suppliers’ factories, increase the use of renewable electricity and replace fossil fuels”.
“The most tangible progress is in replacing fossil fuels and sourcing materials that are recycled or sourced in a more sustainable way,” Ertur said. (H&M defines sustainably sourced materials through an internal assessment of environmental impact, social risks and traceability). “On the supply chain side, we’ve seen huge progress, with the factories we work with almost completely eliminating on-site coal-fired boilers.” The challenge, she said, is that many production processes have not yet been fully electrified, and some countries lack renewable electricity or the legal framework to set up power purchase agreements. “That being said, we are committed to continuing to advocate for this.”
H&M said it will invest 2.8 billion Swedish kronor ($298 million) in decarbonization and materials innovation by 2025. The investment comes in conjunction with a shift in how H&M works with its suppliers. The number of apparel suppliers (tier 1, 2 and 3) reporting the use of on-site coal-fired boilers has decreased by 108 since 2022, with the goal of complete phase-out by 2026. According to the brand’s own definition, 91% of H&M’s materials were recycled or sustainably sourced in 2025. The proportion of recycled materials was 32%, exceeding the company’s target of 30% this year, and Ertur said the company is “well on track” to meet its 2030 target of 50%.
In addition to emissions, reducing resource intensity, especially water consumption, is another key lever to reduce supply chain impacts. By 2025, H&M apparel suppliers (tier 1 and tier 2) will reduce absolute freshwater use in wet processing by 22.8% compared to the 2022 baseline, exceeding the company’s target of a 10% reduction this year. H&M’s current priority is investing in heat pumps, thermal storage solutions and waterless technology at suppliers’ factories to help them reduce energy and water use. Ertur said the investments are measured in terms of greenhouse gas emissions reductions, not financial gains.
In addition to its decarbonization strategy, H&M recently set science-based targets for nature, following in the footsteps of luxury group Kering, which was the first fashion house to do so in 2024. This includes sourcing only materials that meet H&M’s sustainability and risk mitigation standards to avoid the conversion of natural ecosystems; increasing the proportion of recycled materials to 50% to reduce the land footprint associated with agricultural materials such as cotton, wool and leather; and providing financial support for restoration programs such as WWF’s cotton cultivation and sheep grazing projects in India and South Africa respectively.
A key barrier identified across the industry is how to fund decarbonization at the supplier level, particularly in markets where manufacturers face tight margins and limited access to capital. H&M said it is making supply chain decarbonization a shared responsibility with its suppliers. “Working with best-in-class suppliers who share our values and ambitions, and building long-term relationships with them, has always been how we develop our production and sourcing strategies,” Ertur said. “As a brand, we recognize the role we play in developing a framework of financing solutions for green investments.”
