Apparel group H&M has partnered with one of Southeast Asia’s largest banks, DBS Bank, to offer financing solutions to operations across the supply chain to drive decarbonization.
Specifically, a joint financing program was developed through which suppliers can access financing from DBS and technical support from sustainability consultancy Guidehouse to modernize their factories and thus reduce their climate impact.
“Unlike traditional banking solutions that indirectly promote such environmentally friendly activities, this program offers delivery companies direct financing on extremely favorable terms for certain greenhouse gas emissions reduction measures approved by the H&M Group,” the company explains in a press release.
“We see that our industry is committed to tackling its negative impact on the climate. But we also see that effective climate protection measures require joint financing. For us, sustainability investments are not just a responsible approach, but a strategic necessity for future success,” comments Ulrika Leverenz, head of green investments at the H&M Group.
Raj Woolen in India has already been able to take advantage of loans
The first successful transaction has already been completed with manufacturing company Raj Woolen in India, which used the loan to install solar panels, energy efficient engines and water saving technologies to conserve resources and reduce carbon emissions.
“This joint project with H&M Group, Guidehouse and DBS is a successful combination of expert energy assessment, close support in selecting the most suitable technical solutions and an attractive financing model. We are confident that this will deliver the best possible results on our decarbonization journey and we are grateful for this partnership,” said Sumeet Nath, Managing Partner at Raj Woolen Industries in Panipat, Haryana.
Representatives from H&M Group and DBS will meet at the 28th Conference of the Parties to the UNFCCC (COP 28) in Dubai from Thursday to exchange new strategies and discuss best practices and innovative solutions. COP 28 aims to build on previous successes and pave the way for future ambitions to effectively address the global challenge of climate change.
“Accelerating net zeroing of supply chains requires rapid scaling of low-carbon technologies and new, innovative financing models to drive adoption. The collaborative financing tool is a great example of how we can make a difference for delivery companies. DBS is pleased to leverage its extensive network in Asia in partnership with H&M Group to provide access to sustainable finance in a practical way – by directly financing factory upgrades to help delivery operations improve their energy efficiency and decarbonise “To support this,” explains Tan Su Shan, Group Head of Institutional Banking at DBS.