{"id":13884,"date":"2016-11-04T17:58:58","date_gmt":"2016-11-04T21:58:58","guid":{"rendered":"https:\/\/digital.hbs.edu\/platform-rctom\/submission\/hm-environmental-steward-or-greenwashing-marketer\/"},"modified":"2016-11-04T17:59:17","modified_gmt":"2016-11-04T21:59:17","slug":"hm-environmental-steward-or-greenwashing-marketer","status":"publish","type":"hck-submission","link":"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/hm-environmental-steward-or-greenwashing-marketer\/","title":{"rendered":"H&M: Environmental Steward or Greenwashing Marketer?"},"content":{"rendered":"

The meteoric rise of the global fast fashion industry has completely upended the two-season retail shopping experience, conditioning consumers to instead expect and demand the arrival of mass-produced, affordable, and on-trend pieces at increasingly shorter buying cycles. While the business model has afforded retailers with tremendous growth that outpaces that of traditional apparel players, top-line gains were realized at the expense of environmentally sound manufacturing practices. Already the second largest polluter of freshwater resources, the fashion industry is also responsible for the production of synthetic fibers that emit N2O, a gas 300 times more damaging than CO2 [1]. Fast fashion garments, in particular, \u201cproduce over 400% more carbon emissions per item per year than garments worn 50 times and kept for a full year.\u201d [1]<\/p>\n

Amongst its peers, H&M was one of the first to integrate large-scale sustainability initiatives across its supply chain. Sustainability has played an increasingly critical role in H&M\u2019s operating model since 2011, when it launched its Conscious Collection, an annual collection produced with such eco-friendly materials as hemp, organic cotton, and recycled polyester [2]. To complement the main collection, an assortment of eco-friendly pieces under the Conscious brand were made available year-round. Other initiatives quickly followed. Launched in 2013, the Garment Collecting Program provides customers the option to recycle their old clothes and home textiles at an H&M store, regardless of the brand or condition [3]. In return, the customer is gifted with vouchers for use at H&M [3]. Over 12,300 tons of clothing was collected in FY2015 and H&M has, to-date, produced 1.3mm garments using recycled clothing from the program [4].<\/p>\n

On paper, H&M appears to have made considerable strides in realizing its sustainability aims. By the end of fiscal year 2015, 78% of H&M stores operated on renewable electricity (up from 27% in FY2014), which slashed its own greenhouse gas emissions by 56% from 2014 [5]. Committed to maximizing its usage of sustainable fibers in order to transition to a 100% circular business model, H&M has shifted its reliance on organic cotton, organic wool, recycled polyester, and recycled wool [6].<\/p>\n

\"loop\"<\/a><\/p>\n

Exhibit 1.\u00a0H&M, Conscious Actions Sustainability Report 2015<\/p>\n

Water management has been another key area of focus for the company. Fashion is a water-intensive industry, particularly due to the amount of water necessary for cotton production and fabric dye processing [7]. To achieve its aim of global water stewardship, H&M required that its ~500 supplier factories with wet processes institute wastewater treatment measures, reduced the water used during treatment processes for its denim garments, and is on track to introduce water-efficient equipment across its value chain [8]. Already one of the world\u2019s largest users of organic cotton, the company has set an ambitious goal of sourcing its entire cotton supply from sustainable sources by 2020 [9].<\/p>\n

\"conscious2\"<\/a><\/p>\n

Exhibit 2.\u00a0H&M, Conscious Actions Sustainability Report 2015<\/p>\n

H&M has incorporated eco-friendly practices in its operational strategy, but the fact remains that a fundamental tension exists between the enormous environmental footprint generated by its fast fashion business model and its aim to produce sustainable garments. The retail giant currently operates more than 4,100 stores in 61 markets [10]. Armed with an aggressive expansion strategy, H&M plans to open an additional 425 new stores in three new markets in fiscal year 2016, as well as introduce one or two new brands in 2017 [10]. Incentivizing shoppers to trade in their old clothes for a store coupon helps to reduce textile waste on one hand, but it\u2019s also a clever marketing scheme that brings the consumer back into the store to make additional purchases, which ultimately broadens the company\u2019s environmental footprint. Moreover, several of H&M\u2019s key production markets in emerging economics have regulations in place that prevent the importation of used clothes and recycled materials currently comprise of only 1% of H&M\u2019s total material use [6]. Separately, current technological limitations permit only 20% of recycled fibers to be mixed into new garments without compromising quality [11]. Closed-loop recycling is possible for pure cotton, but not for cotton that has been \u201cdyed, treated or blended with other materials.\u201d [11] For synthetic fibers, closed-loop recycling is far from commercially viable [11].<\/p>\n

While H&M has made meaningful progress in achieving its mission of sustainability, it remains to be seen whether it can truly succeed in closing the loop for fashion or is simply employing greenwashing tactics to capitalize on the growing contingent of environmentally-conscious consumers.<\/p>\n

Word Count: 716<\/strong><\/p>\n

Sources<\/strong><\/span><\/p>\n

[1] James Conca, \u201cMaking Climate Change Fashionable \u2013 The Garment Industry Takes On Global Warming,\u201d Forbes, December 3, 2015, http:\/\/www.forbes.com\/sites\/jamesconca\/2015\/12\/03\/making-climate-change-fashionable-the-garment-industry-takes-on-global-warming\/#32482c17778a<\/a><\/p>\n

[2] H&M, 2011 Annual Report, pg 10 http:\/\/about.hm.com\/content\/dam\/hmgroup\/groupsite\/documents\/en\/Annual%20Report\/Annual_Report_2011_P1_en.pdf<\/a><\/p>\n

[3] http:\/\/www.hm.com\/us\/garment-collecting<\/a><\/p>\n

[4] H&M, Conscious Actions Sustainability Report 2015, pg 87 http:\/\/about.hm.com\/content\/dam\/hmgroup\/groupsite\/documents\/masterlanguage\/CSR\/reports\/2015%20Sustainability%20report\/HM_SustainabilityReport_2015_final_FullReport.pdf<\/a><\/p>\n

[5] H&M, 2015 Annual Report, pg 37 http:\/\/about.hm.com\/content\/dam\/hmgroup\/groupsite\/documents\/masterlanguage\/Annual%20Report\/Annual%20Report%202015.pdf<\/a><\/p>\n

[6] H&M, Conscious Actions Sustainability Report 2015, pg 93 http:\/\/about.hm.com\/content\/dam\/hmgroup\/groupsite\/documents\/masterlanguage\/CSR\/reports\/2015%20Sustainability%20report\/HM_SustainabilityReport_2015_final_FullReport.pdf<\/a><\/p>\n

[7] H&M, Conscious Actions Sustainability Report 2015, pg 99 http:\/\/about.hm.com\/content\/dam\/hmgroup\/groupsite\/documents\/masterlanguage\/CSR\/reports\/2015%20Sustainability%20report\/HM_SustainabilityReport_2015_final_FullReport.pdf<\/a><\/p>\n

[8] H&M, Conscious Actions Sustainability Report 2015, pg 98 http:\/\/about.hm.com\/content\/dam\/hmgroup\/groupsite\/documents\/masterlanguage\/CSR\/reports\/2015%20Sustainability%20report\/HM_SustainabilityReport_2015_final_FullReport.pdf<\/a><\/p>\n

[9] H&M, 2015 Annual Report, pg 39 http:\/\/about.hm.com\/content\/dam\/hmgroup\/groupsite\/documents\/masterlanguage\/Annual%20Report\/Annual%20Report%202015.pdf<\/a><\/p>\n

[10] H&M, Nine-month report, pg 1 http:\/\/about.hm.com\/content\/dam\/hmgroup\/groupsite\/documents\/en\/cision\/2016\/09\/1789234_en.pdf<\/a><\/p>\n

[11] Jared T. Miller, \u201cFast Fashion is Creating An Environmental Crisis,\u201d Newsweek, September 1, 2016, http:\/\/www.newsweek.com\/2016\/09\/09\/old-clothes-fashion-waste-crisis-494824.html<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

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