H&M has claimed that SBTi’s decision will “weaken corporate climate pledges and makes real decarbonisation efforts within value chains less attractive.” Credit: Shutterstock.

H&M has written to SBTi’s board of trustees to express its concern around the organisation’s potential use of environmental attribute certificates for abatement purposes in scope 3.

H&M explained: “We firmly believe the priority for any climate strategy should be to take action within corporate value chains to reduce absolute greenhouse gas emissions.”

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The fashion retailer added that SBTi’s decision “weakens corporate climate pledges and makes real decarbonisation efforts within value chains less attractive.”

The company also claims the move could deter investments into needed innovation to deliver systemic change.

Collaborative finance, factory electrification and renewable electricity development were all cited as examples of innovations that would be more expensive and more complicated to implement than voluntary carbon credits and could allegedly be neglected as a result of the change.

H&M suggested the move signalled a step away from a “robust scientific foundation and a governance structure” which it said would undermine the principles of “real climate action”.

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The SBTi’s proposed suite of revisions and resources titled Financial Institutions’ Near-Term Criteria V2 (FINT Criteria V2) are due to come into effect from 30 November 2024.

SBTi had not responded to Just Style’s request for comment at the time of publication, but H&M has called on SBTi to uphold its commitment to science-based target setting and said it was open to engaging with the organisation, as well as other stakeholders, on the topic.

In the letter, H&M said: “Achieving global net-zero emissions is a shared responsibility and alongside efforts to cut emissions within corporate value chains, companies should take action to contribute to this wider goal. Therefore, we ask SBTi to continue developing science-based targets for beyond value chain mitigation, which would be an appropriate avenue for applying voluntary carbon markets or offsets.”

In December 2023, H&M teamed up with Danish retailer Bestseller to develop an offshore wind energy project in Bangladesh aimed at boosting the sector’s transition to renewable energy.

H&M also launched a green bond sale to improve the sustainability of its business in October 2023.