circular economy of H&M

1. CIRCULAR ECONOMY

3.  INTRODUCTION
H & M Hennes & Mauritz AB or H&M Group (abbreviated H&M) is
a multinational clothing company based in Sweden that focuses
on fast-fashion clothing for men, women, teenagers, and children.
Founded in 1947, H&M’s design team creates sustainable fashion
following a low-cost principle.
 The collections include everything from dazzling party collections
to quintessential basics and functional sportswear – for women,
men, teenagers and children, and for every season or occasion.
In addition to clothes, shoes, bags, jewelry, makeup, and
underwear there is also H&M Home – fashionable interiors for
children and adults

4.  In the year of 1946 the 30-year-old Swedish entrepreneur
Erling Persson goes on a road trip through the USA.
In New York, the idea of selling women’s fashion in a new way is
born. The following year, 1947, Persson opens a new
womenswear store in Västerås, Sweden. He calls it Hennes,
Swedish for “Hers”. The soon-to-be-famous Hennes logotype is
designed by the founder himself. A first store in Sweden’s capital,
Stockholm, opens in 1952. When a second Stockholm store
opens in 1954, the popularity is already at fever pitch. That same
year, Hennes takes out a full-page color ad in Sweden’s largest
daily; a pioneering belief in the power of marketing. The 1950s
closes with the opening of a flagship store in the first of five
skyscrapers built in the Hötorget area in central Stockholm.

5.  In 1968, Hennes acquires the Stockholm-based hunting
apparel and fishing equipment retailer Mauritz Widforss,
and the name is changed to Hennes & Mauritz. This is the
start of offering of men’s and also children’s clothing,
leading to H&M offering clothes for the entire family.
The expansion is rapid: by 1969, Hennes & Mauritz has 42
stores. During these decades, the international growth
begins. Norway comes first, followed by Denmark, U.K.,
and Switzerland.

6. In 1973, Hennes & Mauritz starts selling underwear. The same year,
ABBA-member Anni-Frid Lyngstad becomes the first “supermodel” to be
photographed for the company, wearing make-up from the new cosmetics
range.
The growth pace increases even further, with five or six new stores
opening every year.
In 1974, Hennes & Mauritz is listed on the Stockholm Stock Exchange.
The same year, the stores are rebranded with
the abbreviation “H&M”.

7. CIRCULAR ECONOMY: The circular economy is a systems
solution framework that tackles global challenges like
climate change, biodiversity loss, waste, and pollution.
In our current economy, we take materials from the
Earth, make products from them, and eventually throw
them away as waste – the process is linear. In a circular
economy, by contrast, we stop waste being produced in
the first place.

11. BUSINESS PRACTICES OF THE FIRM
At H&M Group, we are working hard to reduce our
climate impact. To do this, we need to become a
circular business, maximising the value of products and
resources by reusing and repairing them as much as
possible before finally recycling them.

12. H&M has taken the lead in introducing sustainable
practices in the circular economy. The brand has
implemented a mindset shift in how clothes are
developed and worn. That too Without changing its main
value proposition of providing customers trendy and
affordable clothes.
Aside from maximising the use extracted from existing
fabrics, the circular approach has
has resulted in new business models being developed
for revamping each stage of the value chain of a
garment.
While the group is far from their ambitious goals, their
existing supply chain and circular initiatives serve as a
work-in-progress blueprint for other industry players to
build upon for a sustainable future in the garment

14. Our circular strategy
We work extensively with the Ellen MacArthur Foundation (EMF), a charity
leading global efforts to shift to a circular economy. Our circular strategy supports
EMF’s vision for a circular economy and covers all parts of our business
including:
Products and customer offerings.
Supply chain
Non-commercial goods, such as packaging and items used in-store interiors,
offices and distribution centres.
To have the biggest impact, we will build on the connections between these
areas, work collaboratively and integrate circularity into everything we do.

16. A circular ecosystem
We aim to create a circular ecosystem, which will help us to achieve net-
zero and have a net positive impact on biodiversity.
Circular products:
Create products that are made to last, from safe, recycled and sustainably
sourced materials and that can be repaired, reused and remade multiple
times.
Circular supply chains:
Help build supply chains that keep products in circulation and support
circular production processes and material flows.
Circular customer journeys:
Make it easy for our customers to experience and engage in a circular
fashion where products are used more, repaired, reused and recycled.
By changing how we make and use products, we can keep products and
resources circulating around the multiple loops of our ecosystem for
longer.

19. How did H&M Make Their Own Supply Chain Circular?
H&M’s value proposition derives from the aim to deliver
affordable trendy clothes.
They accomplish this by not using any factories, to
maintain low inventory, and developing a responsive just-
in-time production system. As a result, H&M maintains high
production for in-season clothes which sell like hot cakes.
The flexibility provided by just-in-time production puts an
emphasis on responsiveness.
For the circular economy approach, H&M aims to
maximize the value derived from resources, in each stage
of the value chain. It goes beyond simple recycling and
digs into the sourcing, treatment and design process
involved in developing garments.

21. “It takes more than 20,000 litres (5,283 gallons) of water to produce
just one kilogram (2.2 pounds) of cotton, which roughly equals one T-
shirt and a pair of jeans.”
H&M has already implemented multiple steps to ‘close’ its value chain.
By 2030, the brand aims to source only sustainable raw materials. This
includes finding better treatment methods for materials such as cotton,
which requires large amounts of water and chemicals. By 2022, H&M
wants to reduce water consumption by 25% for its independent
supplier’s garment production.
Aside from design and production, the circular approach places an
emphasis on reuse and recycling. H&M offers garment collection in its
stores. It has collected almost 29,000 tonnes of material for recycling.
It has also developed a new focus on prolonging the life of these
materials for restoration and re-use.

22. IMPACT OF CIRCULAR BUSINESS PRACTICES ON
PERFORMANCE OF BUSINESS:
This past year, I have grown to appreciate how
clothes represent us as an individual. From
silhouettes to color palettes, clothes help us express
ourselves with our own sense of ‘style’.
But like our personalities, our styles change and
grow. In the process, we have ramped up the
consumption of materials such as polyester by 157%
over the past 20 years. It is estimated that the textile
industry would need to throw 20 million tonnes of
plastic micro-fibres into the ocean by 2050. This is
one of the significant consequences made by fast
fashion trends that needs to be addressed.

23.  With fast fashion, retail brands such
as H&M developed a business model that delivers
trendy clothes at an affordable price for the
consumer. Hennes and Mauritz (H&M) was founded
in Sweden in 1947 with a focus on affordable
clothing. As of 2019, 57% of the group’s materials
are recycled or sourced in a sustainable manner, on
track to reach 100% by 2030.
As a leader in affordable fashion retail, H&M has
taken a step further by redesigning the product
development life cycle for their clothes. They want to
lead the industry through this sustainability
positioning using the circular economy approach.

25. What strategic advantages did H&M achieve with circular economy?
With this closed loop strategy, there are three main advantages H&M
achieves:
Optimized Use of Resources
With the circular approach, H&M aims at 100% renewable energy for its
operations. In 2018, they procured 96% of electricity from renewable
sources. As a result, the group cut costs by EUR 4 million.
New sustainability Business Models
With the circular business model, new initiatives are being developed to
improve each stage of the value chain, from material development to re-
use and packaging. H&M launched a B2B service called Treadler, which
helps other apparel retailers accelerate sustainable changes in their value
chains, by offering access to its own supply chain.

26. Creating lasting change
One company can’t change an entire industry alone. To
make a lasting difference on a large scale, we all need to
work together. That’s why we’re teaming up with
businesses, advocacy organizations and policymakers.

28.  We support legislation that advances a circular fashion industry. In
2020, we engaged with Swedish Government officials to advocate for
impactful policy on chemicals content
 We petitioned the German Government to ensure efficient garment
collecting legislation
We participated in European Union (EU) consultations on textile
strategy, energy-efficient building requirements and circular economy
We signed Global Fashion Agenda’s 2020 Commitment to express our
ambition to build circularity into every product’s design and we’ve joined
its Circular Fashion Partnership
Government incentives for promoting the circular economy


29.  circular.fashion supports us in circular product design and we work
together on standardising digital product passports for circularity.
 Along with other leading global fashion and textile companies, we’ve
committed to Fashion Pact’s goals on climate, biodiversity and oceans.
 We work closely with the Ellen MacArthur Foundation on several
initiatives including Make Fashion Circular Initiative and New Plastics
Economy Global Commitment
 I:CO is our garment sourcing and recycling partner. They manage our
in-store garment collecting programme


30. Future perspective to make the economy more circular.
100% sustainable materials by 2030
 The H&M group is working to achieve its goal that by 2030, all the group’s
brands will use only recycled or sustainably sourced materials in their
collections – a goal that reflects the vision of a circular fashion industry. In 2017
the share of the overall product range made of recycled or sustainable materials
was 35 percent
 According to the Textile Exchange Preferred Fiber Market Report, the H&M
group is already one of the world’s largest users of organic and recycled cotton,
recycled polyester, lyocell and responsibly produced down. Responsible use of
water and chemicals is another important element of sustainable textile
production.
 The H&M group’s chemical restrictions are among the strictest in the industry.
The goal for 2020 is for suppliers’ production processes to have no chemicals
that we have identified as hazardous. The H&M group also has a global water
strategy, produced jointly with conservation organisation WWF, aimed at better
water resource management throughout the garment life cycle.