Friday, February 23, 2024

HSBC and PVH Group Will Finance Suppliers Meeting Sustainable and Social Metrics

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PVH Corp., parent company to Calvin Klein and Tommy Hilfiger, and HSBC, have announced a first-of-its-kind sustainable supply chain finance program.

With metrics based on sustainability rankings among other criteria, PVH’s suppliers will be eligible for a new funding program through HSBC, the world’s leading trade bank.

The assessment involves critical science-based environmental targets as well as social elements including safe work environments, benefits and compensation programs, as well as the absence of forced labor, child labor, and abuse.

“PVH’s commitment to environmental stewardship and enhancing human rights in our supply chain is core to our Forward Fashion strategy. The availability of accessible financing is pivotal to ensuring our suppliers are empowered to invest back into their businesses and people, and contribute to our collective goal of creating an innovative and responsible global supply chain,” Sarah Clarke, PVH’s Chief Supply Chain Officer, said in a statement.

Tommy Hilfiger SS22
Tommy Hilfiger SS22 Collection | Courtesy

“We are proud to leverage our international and sustainability expertise to help one of the world’s largest apparel companies make progress against their ESG goals,” said Marissa Adams, Regional Head of Global Trade and Receivables Finance for HSBC North America.

The announcement follows research from HSBC and Boston Consulting Group that found a gap in global supply chains. According to that research, to achieve net-zero targets, supply chains need $100 trillion in financing by 2050.

The lender says as much as half of that is required by small to medium-sized enterprises. “Sustainable supply chain finance is one way to help leading companies and key sectors like the apparel industry ensure that progress is made to advance their targets and commitments,” the groups said.

“With this announcement, HSBC continues to show their leadership in critically needed sustainable supply chain finance to fund the textile, apparel and footwear industry’s transition to net zero,” said Lewis Perkins, President of the Apparel Impact Institute. “We estimate the total cost for the decarbonization of this industry to be $1 trillion between now and 2050, the majority of which will go towards capital investment in the supply chain.”

Shawn Mendes Tommy Hilfiger
Shawn Mendes for Tommy Hilfiger | Courtesy

HSBC and PVH will measure the suppliers to the fashion group’s Human Rights and Environmental Supply Chain standards and will use industry-aligned tools to measure progress including the Social Labor Convergence Program, for human rights and labor standards, and the Sustainable Apparel Coalition’s Higg Facility Environmental Module, for environmental standards.

Sustainability at PVH

The news follows several sustainability initiatives at PVH. Tommy Hilfiger recently announced a partnership with singer Shawn Mendes for its sustainable apparel. The label is also helping offset the emissions linked to Mendes’ world tour.

The label also recently threw its hat into the rental arena in a partnership with British resale platform, My Wardrobe HQ, as a step to help reduce its carbon footprint and that of its customers.

Calvin Klein ad
Calvin Klein ad | Courtesy

“We’re working toward an inclusive and circular future for fashion,” Esther Verburg, executive vice president sustainable business and innovation at Tommy Hilfiger Global and PVH Europe, the parent company of the brand and Calvin Klein, said in a statement. “As part of our vision, we have set ambitious targets on circularity, vowing to be fully circular by 2030.”

PVH is also exploring innovations in materials. Last December, it joined mycelium material platform Ecovative as part of a coalition of brands pursuing sustainable alternatives to leather. Ecovative’s Forager Hides initiative is working to reach the masses with biomaterials. It’s also partnered with Pangaia and Vivobarefoot, among others.

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