DBS and fashion retailer H&M Group have launched a green loan programme to help the apparel sector decarbonise its supply chains

According to a Nov 27 press release, suppliers can access financing from DBS and technical support from sustainability consultant Guidehouse via the “collaborative finance tool”. 

This green loan programme is different from traditional banking solutions as it provides direct financing with “favourable terms” to suppliers for specific greenhouse gas (GHG) emission reduction activities approved by H&M Group. This enables suppliers to upgrade their factories to reduce carbon emissions. 

According to the release, a first successful transaction of the programme took place this year with a manufacturer in India. With the support of the loan, supplier Raj Woollen financed the installation of solar panels, energy-efficient motors and water conservation technologies to conserve resources and reduce carbon emissions.

Ulrika Leverenz, head of green investments at H&M Group, says the organisation has been engaged with climate mitigation for years, and continuously pushes to demonstrate climate leadership within their industry. 

“For us, sustainability investments are not only a responsible approach but a strategic necessity for future success,” says Leverenz.

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Ahead of the upcoming 28th Conference of the Parties of the UNFCCC (COP28) in Dubai starting Nov 30, H&M Group says further commitment from brands and investors is needed to co-invest and share the financial responsibility of a project and give further alternatives to support suppliers in their decarbonisation journey.

“H&M Group encourages other brands and financial institutions to join its initiative and the Group’s COP28 delegation is looking forward to meeting involved stakeholders at the conference to continue the dialogue.”
 
Meanwhile, DBS’s group head of institutional banking Tan Su Shan says this collaborative finance tool is a prime example of how institutions can create impact for suppliers. 

“DBS is excited to be harnessing our extensive network in Asia, in partnership with H&M Group, to provide access to sustainable financing in a practical way — by directly funding factory upgrades to help suppliers improve their energy efficiency and decarbonise”, says Tan.

Shares in DBS closed 11 cents lower, or 0.35% down, at $31.63 on Nov 28.


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