H&M is the second largest fashion retailer in the world with revenues of $21.7B. \u00a0It operates in 61 countries, has 3,700+ stores and employs ~132,000 people.<\/p>\n
Climate change poses a significant threat to H&M as well as the broader the textile manufacturing industry. Textiles such as cotton are one of the biggest cost components for H&M. Global warming is expected to reduce in crop yields, due to changing temperatures, flooding and drought conditions.[1] Given this, H&M may find it hard to source quality raw materials at a competitive price and with consistent supply. Raw material suppliers that are in water-stressed areas may also see a lot more regulatory requirements for water usage and waste discharge \u2013 leading to higher raw material costs.<\/p>\n
Additionally, H&M and its suppliers have manufacturing and processing facilities located in ~33 countries around the world [2]. Many these of are in areas susceptible to the adverse impacts of climate change, such as rising sea levels, floods, and other extreme weather conditions. Unforeseen weather conditions\u00a0could result in a\u00a0temporary shutdown of these facilities, leading to production losses. Like what Nike faced in 2008 when flooding in Thailand caused four of its factories to shut down. [3]<\/p>\n
Adverse weather conditions can also have an impact on H&M\u2019s logistics and supply chain, leading to temporary or permanent damage to their supply chain infrastructure and assets, causing a disruption in operations and sales.<\/p>\n
Climate change and global warming will also result in changing and variable consumer preferences. Since H&M and other retailers plan their manufacturing cycles based on seasonal collections, drastic weather fluctuations could throw off production cycles, change how long collections stay on the shelf\u00a0and determine what distinct changes need to be made across collections.<\/p>\n
In light of this, H&M has undertaken several initiatives to reduce the impact of climate change on its business as well as to reduce its emissions footprint.<\/em><\/strong><\/p>\n Cotton is the raw material H&M uses the most, but is it also the most susceptible to the impacts of climate change as it requires a lot of water to grow. Hence H&M has begun sourcing cotton from more sustainable sources, and their aim is for all cotton to They have also increased their reliance on the use of more sustainable materials, such as [4]<\/p>\n H&M is also committed to reducing its emissions footprint across the value chain to help curb climate change. To this end, their mission is to use only renewable energy in the operation of all their stores, offices, and warehouses. In 2015, 78% of all the electricity used by them came from renewable sources. They are also committed to increasing their energy efficiency in their stores with a target of reducing electricity use by 20% per store sqm by 2020, compared with 2007. [5]<\/p>\n H&M\u2019s hybrid approach to design and production cycles\u00a0will also allow it to be more sensitive to changing consumer needs. It is vertically integrated with its own distribution network\u00a0and offers two primary collections every year (Spring and Fall) with longer lead times [6]. However, within each season, there are sub-collections with shorter inventory that enables H&M to be more sensitive to changes in consumer demand.<\/p>\n Going forward, H&M could also bolster partners in their value chain to be more environmentally responsible and adopt best practices with regards to water management, energy consumption, and waste disposal.<\/p>\n Word Count [640]<\/p>\n References<\/p>\n [1]\u00a0Adapting to Climate Change: A Guide for the Consumer Products Industry: https:\/\/www.bsr.org\/reports\/BSR_Climate_Adaptation_Issue_Brief_CP.pdf<\/p>\n [2]\u00a0http:\/\/sustainability.hm.com\/en\/sustainability\/downloads-resources\/resources\/supplier-list.html<\/p>\n [3] http:\/\/www.nytimes.com\/2014\/01\/24\/science\/earth\/threat-to-bottom-line-spurs-action-on-climate.html?_r=0<\/p>\n [4]\u00a0http:\/\/about.hm.com\/en\/sustainability\/sustainable-fashion\/materials.html<\/p>\n [5]\u00a0http:\/\/sustainability.hm.com\/content\/dam\/hm\/about\/documents\/masterlanguage\/CSR\/2015%20Sustainability%20report\/HM_SustainabilityReport_2015_final_com_4.pdf<\/p>\n [6]\u00a0http:\/\/www.forbes.com\/sites\/gregpetro\/2012\/11\/05\/the-future-of-fashion-retailing-the-hm-approach-part-3-of-3\/#6e0358606dbf<\/p>\n [7]http:\/\/sustainability.hm.com\/content\/dam\/hm\/about\/documents\/masterlanguage\/CSR\/2015%20Sustainability%20report\/HM_SustainabilityReport_2015_final_com_4.pdf<\/p>\n","protected":false},"excerpt":{"rendered":" H&M attempts to reduce its dependence on unsustainable raw materials and clean up its act. <\/p>\n","protected":false},"author":2369,"featured_media":9331,"comment_status":"open","ping_status":"closed","template":"","categories":[],"class_list":["post-9250","hck-submission","type-hck-submission","status-publish","has-post-thumbnail","hentry"],"connected_submission_link":"https:\/\/d3.harvard.edu\/platform-rctom\/assignment\/climate-change-challenge-2016\/","yoast_head":"\n
\ncome from sustainable sources by 2020. [4]<\/p>\n\n