H&M Group and EY have jointly released a new industry white paper outlining how financing supply chain decarbonisation can protect business value, reduce risk, and deliver long-term financial returns across the fashion industry.
The report, developed with insights from HSBC and the Apparel Impact Institute (Aii), emphasizes that sustainability is no longer optional—but a core component of risk management and long-term competitiveness.
Decarbonisation as a Strategic Business Imperative
Titled “Accelerating Fashion Decarbonisation – An Efficient Approach to Unlocking Corporate Value and Financing the Supply Chain Transition,” the white paper highlights the urgent need for industry-wide collaboration and investment to reduce emissions across global fashion supply chains.
The report underscores that climate inaction carries significant financial risks, including supply chain disruptions, rising operational costs, and long-term threats to corporate value.
Adam Karlsson, CFO of H&M Group, emphasized the evolving role of finance leaders in this transition:
“The cost of inaction on climate change is simply too high—for the planet and for our industry. CFOs have a responsibility to safeguard long-term resilience, not just short-term profitability.”
Financing Models to Accelerate Industry Transition
The white paper provides practical guidance on how fashion brands can structure and scale financing solutions to support decarbonisation across their supply chains—particularly in reducing Scope 3 emissions, which account for the majority of the industry’s environmental impact.
Rather than prescribing a single solution, the report introduces a flexible framework that helps companies:
- Align climate goals with investment strategies
- Integrate sustainability into capital allocation decisions
- Develop collaborative financing models across value chains
According to the report, these approaches can enhance operational resilience, improve cost efficiency, and strengthen long-term competitiveness.
Collaboration Key to Scaling Impact
A central message of the report is that no single company can achieve supply chain decarbonisation alone.
Anna Ryott, Nordic Chief Impact Officer and Partner at EY, highlighted the importance of collective action:
“Fashion brands must be active stewards of their value chains, not just customers of them. The foundations for collaboration already exist—now is the time to scale impact.”
The report points to growing momentum across the industry, with brands increasingly open to shared investment models and joint sustainability initiatives.
Role of Finance Leaders in Climate Transition
The white paper also positions CFOs and finance leaders as key drivers of climate action, responsible for embedding sustainability into financial decision-making processes.
Clair Smith, Head of Sustainable Trade Solutions at HSBC, noted that:
“Investing in climate mitigation today can reduce long-term costs and business risks. Finance leaders play a critical role in enabling this transition.”
By integrating climate risk into financial planning, companies can not only meet environmental commitments but also unlock new sources of value creation.
Building a Resilient and Future-Fit Supply Chain
The report concludes that accelerating decarbonisation requires close collaboration between brands, suppliers, financial institutions, NGOs, and policymakers.
Through shared infrastructure, aligned standards, and innovative financing mechanisms, the fashion industry can build resilient, low-carbon supply chains that are better equipped to navigate future challenges.
Read more: Recover™ Secures Multi-Year Recycled Cotton Agreement With H&M
As the industry faces increasing pressure to meet climate targets aligned with the Paris Agreement, the message from H&M Group and EY is clear:
Decarbonisation is not just an environmental necessity—it is a strategic investment in the future of the business.
