H&M – Can the Fast Fashion Giant Transition into Green Future?

H&M – Can the Fast Fashion Giant Transition into Green Future?
Case Code: BECG184
Case Length: 13 Pages
Period: 2009-2022
Pub Date: 2024
Teaching Note: Available
Price: Rs.400
Organization: H & M Hennes & Mauritz AB
Industry: Retailing
Countries: Sweden
Themes: Corporate Responsibility, Business EthicsSustainability,Environmental Sustainability
H&M – Can the Fast Fashion Giant Transition into Green Future?
Abstract Case Intro 1 Case Intro 2 Excerpts

Abstract

Sweden-based H & M Hennes & Mauritz AB (H&M), one of the largest multinational fast fashion companies in the world, was producing 3 billion garments a year by 2020. In 2019, its revenue was around US$ 22 billion, and its unsold inventory amounted to US$ 4 billion. During the year, there were many reports that the unused clothes from H&M were burned and used as fuel to run a power plant in Sweden. Many clothes were incinerated or found their way to landfills.

H&M along with Zara, Gap, and Shein and other fast fashion companies were mainly responsible for the huge amounts of clothing waste. Every second, a truckload of clothes was either burnt or buried in landfills. Studies showed that the fashion industry was responsible in large part to microplastics entering the oceans.

Karl-Johan Persson, Chairman and former CEO of H&M, focused on reducing the impact the clothes were generating. He was looking at a circular model, where the clothes could be reused or disposed of responsibly. He was also looking at making the company climate positive by 2040, and switching completely to sustainable fabrics by 2030, and he made the UN Sustainable Development Goals a part of the company’s strategy. Helena Helmersson, who became CEO of H&M in 2019, was the sustainability head of the company prior to taking up the CEO role. She was looking at making H&M a leader in bringing sustainability to the fashion industry.

H&M took several initiatives in this direction. It started using sustainable and recycled materials for some of the clothing and accessory lines, began collecting used clothes, and came out with a line of compostable clothing. The Persson family, which owned the largest share in H&M, launched the H&M Foundation in 2012. The foundation collaborated with Hong Kong Research Institute of Textiles and Apparel to come up with a technology that recycled blended textiles made of cotton and polyester. H&M also came up with a technology called Looop that transformed old clothes into new ones. At the same time, H&M continued to produce millions of garments every year, creating a huge environmental footprint. Observers said that the company’s circular solutions were minuscule compared to the pollution and waste it created and that the company was incentivizing disposal. They suggested that H&M needed to change its business model, and should stop relying on increased volumes. However, cutting down production would mean loss of jobs and livelihoods in third world countries. At the same time, H&M needed to keep up with competitors, who were bringing out more styles at a faster pace and lower cost.

Issues

The case is structured to achieve the following teaching objectives:

  • Explain the concept and principles of fast fashion.
  • Investigate whether fast fashion companies can be environmentally sustainable.
  • Examine different types of Greenwashing
  • Explore solutions that promote sustainable production practices.
  • Draw a Virtue Matrix for a fast fashion company’s environmental sustainability initiatives

Contents

Keywords

H&M; fast fashion; principles of fast fashion; sustainability and fast fashion; Greenwashing; sustainable production practices; Virtue Matrix; sustainable design; sustainable development

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