Skip to main content

Why H&M is Pushing for Mandatory Biodiversity Disclosures

As world leaders convene in Montreal to hammer out a new 10-year deal for addressing biodiversity loss, H&M Group wants to make it mandatory for all companies to declare their impacts on the natural world.

“As a global fashion retailer, we need to take responsibility in halting and reversing biodiversity loss and collaborating with others to accelerate the change,” Helena Helmersson, the Swedish retail giant’s CEO, said Thursday, indicating the so-called “action target” that lays this out in the first draft of the post-2020 global biodiversity framework. “We support an ambitious Target 15 at COP15.

The Cos and Monki owner is a backer of Business for Nature’s Make It Mandatory campaign, a group of more than 330 business and finance institutions from 52 countries with combined revenues of more than $1.5 trillion.

The coalition, which also includes Bestseller, Kering and Zara parent Inditex, has been calling on heads of state to move beyond voluntary actions by requiring businesses to assess—and divulge—their impacts and dependencies on biodiversity by 2030.

Nature-related disclosures are simply not happening at the scale and speed necessary to address these risks, according to CDP data. Just over 1,000 companies, for instance, revealed numbers on forests this year, a 20.5 percent increase from 2021. In contrast, more than 18,600 divulged climate change data, a 42 percent increase from 2021 and the highest annual increase in nearly a decade.

Related Stories

The numbers dovetail with findings from the World Benchmarking Alliance, which published its first Nature Benchmark of nearly 400 influential companies across a range of different industries on Monday. Compared with the 50 percent of firms that are taking action to reduce greenhouse gas emissions, just 5 percent have commissioned science-based assessments to determine how their supply chains affect nature and biodiversity.

“We need governments globally to transform the rules of the economic game and require business to act now,” the Make it Mandatory campaign said in a statement ahead of COP15.

Beyond disclosures, the information must be complemented by a “clear aim” to reduce negative impacts and increase positive ones in an “equitable and effective” way, it added.

The World Wildlife Fund’s latest Living Planet Report has presented a bleak prognosis for nature. Since 1970, monitored wildlife populations, including mammals, birds, amphibians, reptiles and fish, have plummeted on average by 69 percent, and roughly 1 million species now teeter on the edge of extinction. Geography-wise, Latin America and the Caribbean have been the hardest hit, with a 94 percent decrease in species between 1970 and 2018.

“We face the double emergencies of human-induced climate change and biodiversity loss, threatening the well-being of current and future generations,” Marco Lambertini, the environmental group’s director general, said when the findings were released in October. “WWF is extremely worried by this new data showing a devastating fall in wildlife populations, in particular in tropical regions that are home to some of the most biodiverse landscapes in the world.”

H&M has been working with WWF for the past decade on projects that conserve and restore biodiversity in critical landscapes close to its value chain, it said. These range from helping smallholder cotton growers in India deploy nature-friendly agriculture practices in an important wildlife corridor to working with South African sheep farmers in the Drakensberg grasslands to produce more sustainable wool through regenerative grazing and farm practices.

The world’s No. 2 apparel retailer after Inditex also recently joined the LEAF coalition, ​a public-private initiative aimed at mobilizing large-scale financing for countries committed to stemming tropical deforestation. Urgently ending tropical deforestation is a “crucial part” of meeting the global climate goal, said Leyla Ertur, head of sustainability at H&M Group, which, together with Kering, Stella McCartney and others, has vowed to purchase half a million metric tons of “low-carbon, low-footprint” alternative fibers for fashion textiles and paper packaging.

“We need to ensure that raw materials we source, such as viscose, are sourced in a way that protects nature and biodiversity,” Ertur said. “But we know that successfully meeting the global climate goal requires us to in parallel invest in climate and nature beyond our value chain. Protecting tropical forests offers one of the biggest opportunities for reducing emissions in the coming decade but it has to be done right.”

Preventing deforestation, which is responsible for some 10 percent of global greenhouse gas emissions, has also become a regulatory issue, with the European Union agreeing on Tuesday to ban the import of certain products involved in forest loss, including soy, beef, palm oil, wood, cocoa and coffee and some derived products such as leather, chocolate and furniture. Failure to comply could generate fines of up to 4 percent of a company’s turnover.

“We have made history with this world-first law against deforestation,” said Anke Schulmeister-Oldenhove, senior forest policy officer at WWF’s European Policy Office. “As a major trading bloc, the EU will not only change the rules of the game for consumption within its borders, but will also create a big incentive for other countries fueling deforestation to change their policies. The law is not perfect but it includes strong elements.”

The imperfect parts include not extending to other wooded lands such as savannahs, even though many are already under “immense pressure” from agricultural conversion, the WWF said. The commission, however, has agreed to conduct an impact assessment on the feasibility of including other non-forest ecosystems.

“It is a shame that other wooded land is not included from the start, as it would have made a huge difference for regions that are under constant threat, such as the Brazilian Cerrado—which might now face even more destruction as a result,” Schulmeister-Oldenhove said. “The European Commission must now urgently start working on the impact assessment to have it ready in a year at the latest.”

H&M has been linked to deforestation before. In a study published by Royal Holloway, University of London last year, virtually every brand operating in Cambodia had ties to suppliers that stoked their boilers with forest wood to some extent. The fast-fashion chain was named among the top 10 worst offenders, though it declined to comment at the time.

In August, H&M and WWF debuted a smartphone app that uses artificial intelligence to identify wood species. The hope is that by allowing suppliers to easily verify the type of wood they’re sourcing for power generation, they’ll be able to avoid old-growth trees in favor of the residues of plantation species like mango and cashew.

“It is exciting to pilot this new technology in Cambodia and find new ways to work with suppliers that can help reduce negative impacts on Cambodia’s natural forests,” said Christer Horn af Aminne, its Cambodia country manager, said at the time.

Next to climate reporting, corporate nature disclosures are still nascent territory, with a lack of standardization that organizations such as the Global Reporting Initiative, the Taskforce on Nature-related Financial Disclosures and the Science Based Targets Network (SBTN) are working to rectify. A robust Target 15, as part of the post-2020 global biodiversity framework being debated at COP15, could also accelerate a more harmonized approach.

Despite delays due to Covid-19, H&M says it remains “engaged” in these conversations. It has started to map its full value chain using the SBTN method and will use its findings to set targets reducing its impact on nature, it wrote in its 2021 sustainability disclosure, which it published in March.

“Like many companies, we are in the early stages of learning how to measure our impact and dependency on nature, with the ambition to set biodiversity targets,” it added. “Ongoing efforts to develop global goals, methods and standards will help guide us.”