Photo by Vytautas Kielaitis/Shutterstock

H&M has its eye on Africa. It’s not the only one, either. Swedfund, a state-owned risk-capital firm that specializes in emerging companies is throwing its financial clout behind the Swedish retailer in a partnership designed to develop a “responsible” Ethiopian textile industry. Beginning this fall, the joint effort seeks to build a system of production that adheres to high social and environmental standards. A strong domestic industry is vital to job creation in the sub-Saharan nation, which ranks among the world’s poorest.

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Photo by Hector Conesa/Shutterstock


“We see the cooperation as an opportunity to get involved in Ethiopia’s growing textile industry at an early stage and to contribute to more jobs,” says Karl-Johan Persson, CEO at H&M, in a statement. “We have for many years worked in existing manufacturing countries to improve working conditions and the environment. This experience is included with the establishment of cooperation with Ethiopian suppliers.”

Ethiopia has a storied history of textile, leather, and shoe production, a relic of Italy’s occupation between 1936 to 1941. Local manufacturers couldn’t match their competition from China, however, and the industries soon languished.

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H&M and Swedfund will tackle their collaboration from their respective vantage points: H&M, with its expertise of the textile market, will purchase products from Ethiopian suppliers that Swedfund will invest in.

Both parties will be responsible for setting production-and-monitoring standards such as water use and wages.

“Through this unique partnership with H&M, our goal is to contribute to developing the textile industry in Ethiopia, thus creating jobs with good working conditions that lift people out of poverty, especially women,” says Anna Ryott, managing director at Swedfund.

+ H&M