How H&M Sharpens its Supply Chain Sustainability Focus

H&M Group’s 2024 Sustainability Report sets out the fashion company’s renewed focus on emissions reduction, circular sourcing and social responsibility, as it continues working towards supply chain sustainability across its global operations.

The company updates progress against its key sustainability targets while facing ongoing challenges in a volatile market. With emissions falling and recycled material use rising, H&M looks to shore up its sourcing strategy and scale circular models across the supply chain.

In 2024, enhancing the decarbonisation of its supply chain and the use of lower impact materials remained a strategic priority area for H&M Group. 

Leyla Ertur, Sustainability Director of H&M Group, explains: “We remain fully committed to our ambitious sustainability agenda. We are on track to achieve our goal for all our materials to be either recycled or sustainably sourced no later than 2030, and we almost reached our 30% goal for recycled materials by 2025 a year ahead of schedule.

"Our efforts to use less and cleaner energy across our supply chain are also delivering strong results in our decarbonisation journey, aligned with our science-based targets. We are aware of the challenges ahead of us and we remain confident that we are on course to fulfil our sustainability agenda in the years to come." 

Supply chain emissions and sourcing strategy

H&M Group reports a 41% fall in Scope 1 and 2 emissions in 2024 compared to its 2019 baseline. These categories cover direct emissions from its owned and controlled operations, such as stores and warehouses. The company remains on track for its 2030 target of a 56% reduction in these areas.

More complex is Scope 3, which includes emissions from the wider value chain – such as suppliers, transportation and product use. H&M’s Scope 3 emissions fell 24% during the year, which it attributes to improvements across the supply chain.

The group is also moving forward on sourcing targets. In 2024, 89% of all product materials were either recycled or sustainably sourced, rising from 83% in 2023. Recycled material use in particular reached 29.5%, just shy of the 30% goal for 2025. The company aims for 50% recycled materials by 2030 and full sustainable or recycled sourcing across all products in the same timeframe.

In terms of energy sourcing, H&M reports that 96% of its electricity now comes from renewable sources. The target is to reach 100% renewable electricity across all operations by 2030.

H&M Group aims to phase out on-site goal entirely by 2026. The report states that the number of garment suppliers (tier 1 and 2) using these dropped to 2027 in 2024, compared to 46 factories in 2023 and 118 in 2022. 

Circular models and supply chain collaborations

Circularity remains a central plank of H&M’s sustainability work. The company expands its investment in Sellpy, a resale platform for second-hand garments. This partnership supports its goal of extending the lifespan of clothes and promoting reuse across its customer base.

To mark 20 years of designer collaborations, H&M has also launched a curated collection of pre-owned items from past partnerships. This “pre-loved” selection introduces circular sourcing to a wider audience by giving vintage pieces renewed visibility and commercial value.

In Bangladesh, H&M co-funds a supply chain decarbonisation programme alongside other global retailers. This collaborative project aims to reduce emissions at the manufacturing level, focusing on the textile production hubs where a large share of H&M’s sourcing takes place.

The combination of resale initiatives and joint action on supplier emissions reflects a broader push to embed circularity and sustainability directly into supply chain structures.

Social responsibility and operational outcomes

In addition to its environmental and supply chain targets, H&M continues to report on progress in social responsibility. Women held 65% of leadership roles across the business in 2024, a rise that supports the company’s diversity and inclusion goals.

H&M Move, a sub-brand focused on activewear, extends its social impact work through a partnership with Women Win’s ONSIDE Fund. This two-year collaboration backs grassroots groups using movement-based projects to challenge inequality, particularly in underrepresented communities.

However, the company also faced challenges during the year. Net sales declined slightly to SEK234bn (US$23bn) from SEK236bn (US$23.6bn) in 2023. The fall is attributed to store closures and market conditions, with global store numbers reduced to 4,253.

Despite the drop in sales, H&M reports improved profitability. Operating profit climbed to SEK17.3bn (US$1.7bn), up from SEK14.5bn (US$1.5bn) in 2023. The company links this gain to tighter cost controls and a sharpened focus on supply chain efficiency.

Looking ahead, H&M reaffirms its long-term goals. These include using only sustainably sourced or recycled materials by 2030, scaling circular business models and reducing emissions across all categories. The company also aims to innovate with new materials and production methods that lower environmental impact without curbing growth.

“Thanks to the commitment and contribution from our teams and a strong plan, I am optimistic about our potential,” says Daniel Ervér, CEO H&M Group. 

“We will take significant steps forward in 2025 and keep working to build the foundation for continued profitable and sustainable growth.”

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