HM Group – owner of H&M, Cos, & Other Stories – has credited renewable electricity matching in Australia as a key driver of its global emissions drop, with renewable electricity matching in the local market helping lower overall Scope 1 and 2 emissions year-on-year.
In the HM Group’s latest Sustainability Report 2025, the global retailer reported a 41 per cent reduction in these emissions compared to 2019, while significantly increasing its use of virtual power purchase agreements (VPPAs) as part of a broader shift in energy procurement strategy.
A VPPA is basically a financial deal, not a power supply deal. This means the company agrees to financially support a renewable energy project and gets credit for the clean energy, but it still buys its actual electricity from its usual provider as normal.
The update comes as H&M continues to improve store-level efficiency, with electricity intensity across its retail network down 32 per cent against a 2016 baseline.
“The reduction since last year was mainly driven by the matching of renewable electricity with consumption in Australia, which contributed to lower emissions despite a marginal decline in our overall renewable electricity share from 96 percent in 2024 to 95 percent in 2025 due to updated RE100 criteria preventing matching in Romania and Serbia,” HM Group shared in the report.
RE100, a global initiative led by the Climate Group, has tightened its technical criteria, requiring companies to use recognised renewable energy certificates and match electricity within defined market boundaries.
That shift is elevating countries like Australia while limiting what can be counted in markets that don’t meet these criteria.
HM Group operates around 4,100 stores globally, with 940 stores across Asia, Oceania (including AU/NZ) and Africa. H&M operates around 32 stores across Australia, while Cos operates five stores here. Cos and & Other Stories also sell through online retailer The Iconic.
The group’s Asia, Oceania and Africa market makes up around 12 per cent of global sales, at least according to the company’s 2025 annual report, with that market making 27.7 billion Swedish Krona (~A$4.27 billion).
At the end of 2025, HM Group’s Asia, Oceania and Africa market had 940 stores.