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 dwelling 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 Trend Agenda, a nonprofit that encourages style manufacturers to undertake climate-friendly enterprise practices. Different corporations are being inspired to hitch the challenge, which may start operations by 2028.

Trend corporations who’ve pledged an emissions discount of no less than 50 % by 2030 and internet zero by 2050, and that may put no less than $10 million into the challenge, are eligible to take part, Ulrika Leverenz, head of inexperienced funding for H&M Group, informed GreenBiz.

“For us, this can be 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 presently depend on coal, petroleum and fuel for his or her electrical energy, in line with World Trend 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, could 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 lower the nation’s annual emissions by a projected 725,000 metric tons, in line with the developer.

“That is actually a pioneering effort. Whereas it’s turn out 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 corporations on provide chain sustainability technique.

Most style corporations 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 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 tendencies. 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 aim 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 % lower.

Copenhagen Infrastructure Companions, based mostly in Denmark, is the biggest devoted fund centered on renewable vitality tasks — particularly wind — in undeveloped “greenfield” areas; to date 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 affords technical assist and financing to suppliers who need 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 affords loans on favorable phrases to suppliers who need to displace fossil fuels.

H&M has funded 17 tasks 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 challenge was “a profitable mixture of skilled vitality evaluation, shut assist in deciding on probably the most appropriate expertise options, and a lovely financing mannequin,” stated Sumeet Nath, managing associate 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 consider the provider’s monetary scenario, the innovation stage of the expertise, our enterprise share within the unit, and the provider’s personal want,” she stated. 

Its two priorities are “massive tasks with massive suppliers aiming for optimum impression,” and people searching for to deploy revolutionary expertise that may initially be dangerous however may present longer-term advantages, Leverenz stated.