A couple of weeks ago, I attended a double whammy in the H&M-sphere. Two events that made you proud to be part of the Swedish fashion legacy, and at the same time, forget that the fashion conglomerate is a major culprit when it comes to overproduction. Two aspects that probably correlate.
Let me explain.
H&M does a lot of good, as evidenced by both its investment strategy and its foundation work, and on Thursday, I was able to see both up close.
First out was a breakfast seminar during something they call H&M Entrepreneurs’ Day, hosted by H&M Group Ventures, a part of H&M that invests in innovations such as material inventions, resale platforms, and other tech-oriented companies. Entrepreneur’s Day was a gathering of the +30 companies in the portfolio. A mostly internal event, but with a select few external observers, of which I was one.
The coffee stations were crowded with familiar faces from the Scandinavian MIND panels and podcasts, from their Head of Sustainability, Marcus Hartmann, to entrepreneurs like Oscar Rundqvist of eComID and Erik Zetterberg of Singular Society, to operators like Erik Lagerblad, who recently switched from being head of H&M Ventures to becoming CEO of textile collector Looper.
I managed to steal a few words with H&M’s newish CEO, Daniel Ervér, and asked him what types of solutions he was actively looking for. The answer: more innovations when it comes to collecting and recycling textiles.
It makes sense. Since 2025, textile collection has been mandatory across the EU, and I’ve been surprised by how little this has been discussed in the media and society at large. Behind the scenes, I get reports of how chaotic the situation is, with warehouses filling up with discarded clothes and home textiles, with little or no strategy for dealing with them. The responsibilities are unclear, municipalities are struggling to find a proper structure for it, and every week, the mountain grows bigger.
With greater awareness of landfills in developing countries like Ghana, it’s understandable that a mega-retailer like H&M would feel pressure to take greater responsibility for the textile mountain it produces each year.
But is it a way to treat the symptoms and not the disease?
How about trying to avoid the textile mountain in the first place, by selling garments that last longer, and building systems that enable less overstock at the end of the season?
I think H&M Ventures and H&M Foundation should spotlight data-driven software engineers the same way they do material scientists and retail innovators.
Daniel Erver’s statement was indicative of the types of investments they are already doing.
H&M Ventures has its investments in four buckets: Sustainable Fashion, which focuses on materials and the development of recycled fabrics; regenerative farming; and improved dyeing processes. New Business Models, which mainly contain various versions of reselling platforms. New Growth, which are the long-term investments on bets that will actually scale, like polyester recycler Syre, the aforementioned Looper Textiles, and, for some reason, a merch company called Creator Studio.
And then we have what they call Enablers and Services, which consists of e-commerce platforms (Centra), payment solutions (Klarna), last-mile distributors (Instabee) and marketing management (Voyado). Most of the “enabling” is about selling more and reaching consumers more effectively.
What I don’t see are solutions specifically targeted at reducing the fashion value chain’s waste. At our Transformation Conference conversations over the past year, we spoke at length about how data, transparency, and tracking the product throughout its life cycle can enable a more sustainable fashion system and minimise overstock.
The closest we get is eComID, an e-commerce add-on that has built a promising narrative around minimising returns to create a more sustainable ecosystem. They are now moving into conversational discovery using AI, which I recently discussed with founder Oscar Rundqvist on the podcast.
There is a huge opportunity here for H&M to take the lead. They should know, better than anyone, the complexities of running a streamlined fashion operation and should let their own learnings guide them into a new category of investments. We need stronger feedback loops between customer behaviour and the design process. We need better transparency between retail and distribution. We need to fine-tune the relationships between the customer demand and production.
I see a path forward where H&M can be the responsible actor in a world where Temu and Shein are taking an admirable concept – made-to-order and on-demand – and turning it into sustainability slop.
You can call this emerging category “Fashion Optimisers”. Companies that don’t just make fashion greener, but also smarter. They build the invisible infrastructure that aligns what’s produced with what people actually buy: data feedback loops, real-time inventory prediction, and demand-driven design. Where sustainability startups tackle materials, Fashion Optimisers tackle inefficiency.
In the evening, I met up with many of the same people at the Global Change Award, an event held at the very same venue as the Nobel Prize – Blå Hallen at City Hall in Stockholm. If the morning was about H&M’s commercial bets, the evening was about its philanthropic mirror.
In the presence of HRH Crown Princess Victoria, H&M Foundation celebrated 10 years of the award by handing out awards to 10 winners, who had been announced earlier this year (we wrote about one of them, Renasens, here).
While the foundation shares the name with H&M Group and seemingly has a similar mission to H&M Ventures, there is no formal connection between H&M and the H&M Foundation. It runs completely separately from the communication operation and is funded by the ownership family, Persson.
It was a glittery and grandiose event, with a sense of upbeat optimism seldom heard in the fashion world of late. It was hard not to be inspired by the grit and determination of the winners, many of whom found their innovations during university and then.
Yet again, the focus was on material innovations, production, and circular business models like resale. Tangible things that either relate directly to the garment or how it’s sold. The event highlight was a captivating keynote by the first winner from 10 years ago, Ambercycle. A true underdog story about a couple of students who emerged from university with a mission to tackle textile waste, and managed to turn their award-winning idea into what is now a central production facility in Bangladesh. Their CEO, Shay Sethi, delivered their story better than most Silicon Valley founders. Bravo!
The whole thing reminded me of a column I wrote nearly two years ago, about the need for “boring tech” to save the fashion system. Without better data, even the most circular fabric will end up in the same overflowing warehouse. Sustainability isn’t just a material challenge, it’s a systems challenge. And the companies that can close that loop – connecting production to demand in real time – will be the true innovators of the next decade.
I think H&M Ventures and H&M Foundation should spotlight data-driven software engineers the same way they do material scientists and retail innovators.
The industry desperately needs it.
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