PVH Corp. Launches Financing Program for Suppliers With High ESG Marks
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PVH Corp. is trying to accelerate progress on its climate commitments by incentivizing suppliers to take action and develop their own targets.
The Calvin Klein and Tommy Hilfiger owner, which released its annual Corporate Social Responsibility (CSR) report this week, made several strides toward climate accountability last year. PVH conducted its first climate-risk scenario analysis and enhanced its carbon accounting capabilities “to better understand climate risks across our operations and more precisely measure emissions reductions,” chief sustainability officer Rick Relinger wrote.
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With Scope 3 emissions, which come from non-owned or operated parts of the supply chain, making up the bulk of apparel companies’ carbon impact, PVH decided last year to partner with its suppliers to set their own greenhouse gas (GHG) emissions reductions goals, and develop actionable plans to meet them. It launched a supply chain financing program that provides manufacturers with better financing rates based on sustainability performance last year.
“Our Scope 3 emissions continue to account for the majority of our total emissions, representing 97 percent of our GHG footprint for 2022,” PVH wrote. Partnerships with banks including HSBC, Standard Chartered and DBS will now give suppliers competitive access to capital, with rates based on their environmental and social performance. Setting science-based targets and providing healthy, safe workplaces and fair compensation and benefits will earn them more favorable terms. Meanwhile, supplier progress will be gauged against PVH’s own supply chain guidelines and other industry tools like the Social & Labor Convergence Program and the Higg Facility Environmental Module (Higg FEM).
Today, 89.6 percent of the global suppliers for PVH meet its minimum standards for environmental sourcing. The company has also taken a stand for the rights of workers, signing onto the Pakistan Accord, which extends legally binding agreements between brands and trade unions to improve worker safety. In Bangladesh, PVH launched a five-year, $5 million project to fund development programs that reach 100,000 women, underscoring existing efforts in Tunisia, Vietnam, India and Sri Lanka.
The company is also working to drive down emissions by making lower-impact design decisions. PVH organized training sessions for more than 800 of its design professionals across the globe, teaching them to design and develop products using environmentally preferred materials based on the PVH Circular Design Framework. The standards take into account a material’s efficiency, durability and end-of-life possibilities, as well as opportunities for resource conservation.
PVH is using Textile Exchange’s Preferred Fiber and Materials Matrix methodology, theSustainable Apparel Coalition’s Material Sustainability Index data, and Fashion for Good’s technical insights and data “to inform how we categorize materials and fibers into a global framework for preferred material sourcing,” it said. “This framework provides our product development teams with actionable information to drive increased adoption of materials with lower environmental impact.”
PVH is aiming to curb its reliance on standard cotton and virgin polyester, and build up programs that utilize alternative materials like hemp, which appears in the Tommy Jeans line. Fifty-six percent of the materials used last year were classified as environmentally preferred, up from 44 percent in 2021. Cotton accounts for the majority of material used across product lines, with 69 percent deemed environmentally preferred in 2022. Meanwhile, 38 percent of polyester met the company’s framework for environmental preference, along with 15 percent of viscose and 13 percent of wool.
PVH tested and seeded textile recycling programs using recovered fibers, yarns and fabrics from its supply chains, and adopted Infinited Fiber Company’s technology, which transforms cellulosic materials into new fibers. The first commercial shirts using the upcycled materials were released under the Tommy Hilfiger brand in Europe. The brand also teamed up with textile-to-textile recycling firm Renewcell on a line of products for Tommy Jeans, and joined forces with the Ellen MacArthur Foundation’s Jeans Redesign program, developing 43,000 garments using the organization’s guidelines.
The company also touted its water conservation progress. It said it fully achieved its goals to improve water usage and the health of bodies of water in the areas from which it sources three years ahead of schedule. PVH has successfully stopped the flow of 80 percent of hazardous chemicals and microfibers from its wet processing facilities, and is on track to reach 100 percent by 2025, according to the report.
To catalyze the fashion supply chain’s decarbonization efforts, PVH has committed $10 million to the Apparel Impact Institute’s Fashion Climate Fund, Relinger wrote. “With greater action, we can enable suppliers to transition to renewable electricity, improve energy efficiency, eliminate coal in manufacturing, and scale sustainable materials,” he added.
