Sweden’s H&M Group is investing in Bangladesh’s first offshore wind challenge, a utility-scale set up being developed by Copenhagen Infrastructure Companions. Bangladesh is residence 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 World Vogue Agenda, a nonprofit that encourages style manufacturers to undertake climate-friendly enterprise practices. Different firms are being inspired to affix the challenge, which may start operations by 2028.

Vogue firms who’ve pledged an emissions discount of at the least 50 % by 2030 and internet zero by 2050, and that may put at the least $10 million into the challenge, are eligible to take part, Ulrika Leverenz, head of inexperienced funding for H&M Group, instructed GreenBiz.

“For us, it is a nice instance of how a collaborative method 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 style {industry}

An estimated 70 % of style {industry} emissions come from upstream actions, together with manufacturing, and plenty of of these operations at present depend on coal, petroleum and fuel for his or her electrical energy, in accordance with World Vogue Agenda.

Bangladesh accounts for near 8 % of worldwide clothes exports, making it the third-largest exporter of those items after China and the European Union. The challenge, with a deliberate capability of about 500 megawatts, can be the primary utility-scale offshore set up for Bangladesh. It goals to produce 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 accordance with the developer.

“That is actually a pioneering effort. Whereas it’s grow to be extra frequent for different industries to take an method 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 style firms have some operational footprint in Bangladesh, stated Rycroft. “What’s vital is that this helps coal energy be decommissioned,” she stated. “It helps the grid at a bigger degree. It is a provide chain that’s remodeling in real-time.”

H&M is one of many world’s largest “quick style” manufacturers, a time period used to explain attire that strikes rapidly from retail to manufacturing to satisfy fast-moving type traits. The corporate reported Scope 3 emissions of 5.65 million metric tons in its newest sustainability report, for 2022. (Scope 3 consists of emissions from the corporate’s provide chain.) That was a 3 % discount from 2021. Its objective is to realize a 56 % discount in Scope 3 emissions by 2030, based mostly on a 2019 baseline; as of 2022, it had managed a 7 % minimize.

Copenhagen Infrastructure Companions, based mostly in Denmark, is the most important devoted fund targeted 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 Vogue Initiative, which provides technical help and financing to suppliers who wish to scale 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 provides 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 all 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 challenge was “a profitable mixture of professional power evaluation, shut help in choosing probably the most appropriate expertise options, and a beautiful financing mannequin,” stated Sumeet Nath, managing associate for Raj Woollen.

One other metric to look at: 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 consider the provider’s monetary scenario, the innovation degree of the expertise, our enterprise share within the unit, and the provider’s personal want,” she stated. 

Its two priorities are “huge initiatives with huge suppliers aiming for max impression,” and people in search of to deploy modern expertise which may initially be dangerous however may present longer-term advantages, Leverenz stated.