H&M's CEO on How the Brand Plans to Make Fast Fashion More Sustainable

From Style.com, Published 23 April 2015

H&M may have bowed an impressive 379 stores in 2014, but in 2015 the company is poised for an even more substantial growth spurt, with 400 doors slated to open internationally by the year’s end. Earlier in April, it also released its 13th annual sustainability report, an epic of more than 100 pages outlining the brand’s plans to correct its impact. And while such a report from a company with a global footprint as massive as H&M’s has attracted its fair share of media criticism, the fact remains that the Swedish behemoth has been expanding with an eye to the environment long before that particular cause was in vogue. So how is one of the biggest brands in the world planning to diffuse the impact of fast fashion? We caught up with Karl-Johan Persson, CEO of H&M, to find out.

Obviously you’re taking steps to make the company more sustainable, but how do you plan to reconcile that with the massive consumer demand that a brand like H&M faces?

It’s something that we’re investing a lot in, and that’s super-important for us for two reasons. One, if you have financial strength and are a big company like us, you should have a wider responsibility than just thinking about profits. And then I also think it makes good business sense, because customers are caring more and more; colleagues are caring more and more; and the media is also focusing more on sustainability. So there is a good case [to be made], even though it’s costing more in the short term.

Do you see a shift in retail on the whole toward more awareness about sustainability and its impact on the industry?

Absolutely. It’s going at a good pace, and companies are doing more, which I think is great. With greater demand from customers, we see it increasing in all markets, but I think the interest is—today, it’s higher in the Scandinavian countries, the U.K, Germany, the U.S., and it’s a bit less in Asia. But we see it growing in all markets, which is good.

Are your efforts in some ways spurred by consumer interest in sustainable products, or do you see yourself as setting the tenor for the market?

I think it’s both. We really believe in the long-term. We don’t yet see customers willing to pay more for sustainable materials such as organic cotton. So even though we pay a premium for buying it—it’s an investment for us that’s actually, in the short term, costing a lot, but we see it as a good long-term case. Because interest is growing and we see that in the future, demand will continue to increase for companies taking a big responsibility when it comes to sustainability.

You’re continuing a major international expansion in 2015; how are you planning to temper the environmental impact of that?

We are continuing to expand, but at the same time we have a goal to reduce our footprint, which we’ve managed to do. So less CO2 emissions, even though we’re growing. We’re using more renewable energy and we’re trying to be more green in the logistics and the store operations and so on. And we also try to use our scale to take part in some good initiatives, like the recycling program we have in all our stores, in which customers can hand in garments that they no longer want or use. We’re getting those fibers back into production, so we can close the loop. I don’t think the solution is to consume less—because consumption is also good on the sustainability side, as it creates a lot of jobs and reduces poverty—but rather to continue to consume, and consume from companies that are working on sustainability, and also then invest a lot in finding new technologies and innovations and how to reduce the environmental impact.

As a mass-market retailer, how do you see your sustainability comparing to those of a luxury brand like Kering, which has introduced a lot of new programs lately?

I think there are a lot of good companies on the high street, like H&M and some other ones as well. But there are also brands [on both sides] not doing anything. I don’t think one should look at the price [point] we charge our customers—quite often the products are produced at the same suppliers, so there are the same salaries and so on—but rather at the sustainability reports of all brands, and then really try to understand what the different companies are doing.

For more information regarding sustainability, please refer to the following links:
Fashion Forward to Innovation with Sustainable Clothing
Understanding a Product’s Recyclability
ESG: A Growing Interest for Business Investors