H&M Releases 2025 Sustainability Report: Scope 3 Emissions Down 34.6%, 91% of Materials Now Sustainable

On March 26, Swedish fashion company H&M Group announced its Annual and Sustainability Report for 2025.

According to the report, the company reduced greenhouse gas emissions across its value chain (Scope 3) by 34.6% compared to 2019 levels. In addition, emissions from its own operations (Scope 1 and 2) fell by 41% over the same period, indicating progress across multiple areas of its decarbonization strategy.

The report also revealed that 91% of materials used in its products are either recycled or sustainably sourced. Recycled materials alone accounted for 32%, exceeding the company’s 2025 target of 30%.

H&M aims to increase this share to 100% by 2030.

Balancing Business Growth and Environmental Impact

CEO Daniel Ervér commented in the report: “We are strengthening our offering and showing that growth, profitability and reduced emissions can go hand in hand.”

H&M continues to position sustainability not as a standalone CSR initiative, but as a core component of its business strategy. In 2025, the company invested SEK 2.8 billion in decarbonization and material innovation, accelerating structural changes across its supply chain.

Progress has also been made in reducing water usage. Freshwater consumption in wet processing among garment suppliers decreased by 22.8% compared to a 2022 baseline.

These efforts are supported not only by large-scale investments, but also by improvements in operational efficiency and value chain optimization.

Slight Decline in Sales, Amid Structural Transformation

In 2025, H&M reported net sales of SEK 228 billion (approximately $24.2 billion), marking a 3% decrease compared to the previous year. This decline is believed to reflect factors such as store optimization and shifts in market conditions.

However, sales increased in local currencies, alongside improvements in profitability and operational efficiency. Rather than signaling contraction, this points to an ongoing phase of structural transformation.

Since its founding, H&M Group has pursued the vision of making fashion accessible at an affordable price. Today, the company is integrating sustainability as an essential component of that vision, driving transformation across material sourcing, supply chains, and customer experience.