H&M is making good on the promise it made more than one year ago to grow its supply chain with the help of Swedfund, a Swedish state-owned risk capital company that specializes in investing in emerging markets.
In particular, H&M and Swedfund are directing their combined effort on Ethiopia. The partnership, which will begin this fall, is intended to contribute to the development of a responsible textile industry in Ethiopia with high social and environment standards. Together H&M and Swedfund aim to set standards for sustainable production, as well as water use and wages.
A joint statement revealed that H&M will apply its expertise in the textile market, sustainability and purchase of products from suppliers that Swedfund will invest in. Swedfund will offer local market knowledge and expansion investments in suppliers to H&M.
The Dagens Industri reported that Swedfund will inject $8.6 million in investments to H&M suppliers.
H&M CEO Karl-Johan Persson, said, “We see the cooperation as an opportunity to get involved in Ethiopia’s growing textile industry at an early stage and to contribute to job creation. We have for many years worked in existing manufacturing countries to improve working conditions and environment. This experience is included with the establishment of cooperation with Ethiopian suppliers.”
Job creation is a crucial part of the initiative. Swedfund CEO Anna Ryott, added, “Through this unique partnership with H&M, our goal is to contribute to developing the textile industry in Ethiopia, thus creating jobs with good working conditions that lift people out of poverty, especially women.”