Our responsibilities
H&M does not own any factories of its own. Instead our products are produced by around 700 independent suppliers, primarily in Asia and Europe. Many of our suppliers operate in developing countries where the textile industry represents a significant proportion of export revenues.
Taking responsibility for how people and the environment are impacted by our activities is important and is essential if H&M is to be able to grow while maintaining profitability.
Code of Conduct leads the way
H&M’s Code of Conduct, which is based on ILO conventions and on the UN Convention on the Rights of the Child, forms the basis for work in this area. The Code of Conduct includes the following requirements:
- compliance with local labour law
- statutory pay and working hours
- the right to organise and bargain collectively
- a ban on child labour
- a ban on discrimination
- a ban on forced labour
- health and safety in the workplace
- compliance with local environmental legislation.
All suppliers are monitored
All the factories involved in producing H&M’s products are covered by the Code of Conduct. It applies both to our suppliers and to any subcontractors that they may use. Our system for follow-up of production conditions, the Full Audit Programme (FAP), has the same scope. Producers of materials used – such as fabrics and buttons – are not covered by the monitoring programme, however.
When H&M begins collaborating with a new supplier or when an existing supplier engages a new subcontractor an extensive FAP audit is carried out. The aim is to obtain as accurate a picture as possible of conditions at the factory. The audit includes over 300 questions and each audit takes two to six working days to complete.
H&M employs around 50 auditors in total. During the audit the auditors inspect the plant, go through employment contracts, timesheets, payroll reports and other documentation and talk to factory employees and management. After each audit the findings are discussed with the supplier. The supplier is then given a certain period in which to draw up a plan for remedying any shortcomings. The implementation of such measures is followed up by the auditors. The next FAP audit will be due around two years later and forms the starting point for a new cycle of improvements.
In 2006 we focused on developing methods for followup visits. Among other things, a number of workshops were held at which the auditors met up to exchange experiences and discuss possible improvements.
Supplemented with independent monitoring
At H&M we work to bring about continual improvement. That also applies to our methods of monitoring how well our suppliers are complying with our Code of Conduct. Consequently, in 2006 H&M became a member of the Fair Labor Association (FLA).
This means that FLA carries out independent audits of our suppliers’ factories in China and also reviews H&M’s systems for follow-up of the Code of Conduct. The results will be published during 2007 on the FLA website, www.fairlabor.org.
The cooperation with FLA is an important quality assurance, but is also a way for H&M to show its stakeholders how effective its own follow-up is.
Challenges require cooperation
The challenges faced in the production countries are complex and have causes at many levels. This means that we have to cooperate with others if we are to counter the difficulties facing the garment industry.
Among other things, H&M supports the Better Factories Cambodia programme. This initiative, which is run by the International Labour Organization (ILO), aims to improve working conditions for those employed in Cambodia’s garment factories. Its work includes training and independent monitoring. H&M also participates in the MFA Forum Bangladesh. In addition to around ten buyers, other participants include representatives of the Bangladeshi government, local industry organisations, the World Bank, the global trade union organisation ITGLWF and a number of other organisations.
Global and local charity
H&M has been involved in various forms of charity for many years, on both a global and local level. We prioritise projects that strengthen social development in locations where we do business. The projects are typically focused on women, children and education. The explanation for this is that the majority of our customers are women and most people working in the textile industry are also women.
Through our partnership with UNICEF we have found a universally recognized partner who we can work with both globally and locally. The partnership with UNICEF also means that H&M is engaged in local cooperation projects in a number of markets, some of which are aimed at raising money for a variety of purposes. H&M’s stores and sales staff play an important role in these projects.
For the past five years H&M has also been supporting WaterAid, a charity organisation with British roots. During 2006, H&M contributed £58,000. The sum is equivalent to 10 per cent of the sales of a bikini which was designed especially for this purpose and sold on all H&M’s sales markets last year.
We also help disaster victims when there is an acute need for clothes or other assistance. Disasters such as war and earthquake affect people all over the world. H&M works with recognised aid organisations in every one of our sales countries. We donate clothes which, for various reasons, have failed to meet H&M’s quality standards and have therefore been rejected. Obviously we do not donate clothes that fail to meet our safety standards.
Focus on the cotton issue
H&M wants to actively contribute to reducing the environmental impact of cotton growing. Our strategy is made up of two parts: promoting organic cotton growing by contributing to increased demand, and improving conventional cotton growing. During 2006 we blended nearly 30 tonnes of organic cotton into our garments.
Our goal for 2007 is to blend at least 100 tonnes of organic cotton into selected garments. In addition, during 2007 H&M will launch collections made from 100 per cent organic cotton. H&M is also a member of the organisation Organic Exchange, the task of which is to promote organic cotton growing.
Almost all cotton is still grown by conventional methods, however. In parallel with our efforts in respect of organic cotton, therefore, we are also working to improve conventional cotton growing by taking part in the Better Cotton Initiative. The aim is to measurably reduce the negative effects of conventional cotton growing. This cooperation was initiated by the World Wide Fund for Nature in 2004.
H&M expands Eco-labelling
Since 2005 H&M has been licensed to use the European Union’s official eco-label, the Flower. The Flower represents restrictions on harmful substances and reduced water pollution throughout the production chain, from raw cotton to the finished product. In addition, the label’s quality criteria denotes the garment’s ability to keep its fit and colour.
In 2006 about 190,000 Flower-labelled baby garments were sold in our stores – a marked increase on the 75,000 garments sold in the previous year. Since these garments are in demand from our customers, in 2007 we plan to expand eco-labelling to other areas of our baby range.
Climate change: Carbon dioxide emisions
Reducing the company’s carbon dioxide emissions and thus limiting its impact on climate is an important part of H&M’s environmental work. This mainly involves efforts to reduce emissions caused by the transportation of goods and use of energy in our stores and warehouses. You can read more about this work at www.hm.com/csr.
H&M included in sustainability indexes
H&M is included in a number of sustainability indexes, including the Dow Jones Sustainability World and FTSE4Good. The aim of these indexes is to make it easier for institutional investors to choose socially and environmentally sustainable investments.
Read more about our work under Corporate Responsibility.