Supply chain monitoring
Factory audits
Agreement with suppliers
Each supplier undertakes to abide by H&M's Code of Conduct. Not all our suppliers meet every one of our requirements from the start, but they must commit themselves to implementing the changes required to do so in order to be accepted as a supplier to H&M. Certain basic requirements must always be met. For example, a supplier who refuses to allow trade unions or has employees who are younger than the law and our Code of Conduct allows will not be accepted as a supplier. We also require that our suppliers tell us all the subcontractors that may be used for the manufacture of H&M products, so that we can be sure that we have control over where our clothes are produced.
Factory audits
We employ staff at our production offices to check that H&M's suppliers and their subcontractors carry out the improvements necessary to meet our requirements. We now have 19 offices in the biggest production markets and a total of around 50 auditors whose full-time job is to check that our Code of Conduct is being observed.
Our auditors work their way through a form containing over 300 points. They interview the company management and employees, inspect all factory premises and check documentation such as payroll reports and time cards.
Reporting inspection results
After each audit we collate the results in a report, specifying the areas where improvements are needed, and the supplier must draw up an action plan within a specified period. The auditors then follow up whether the improvements have been made. We carry out both pre-arranged and unannounced inspections.
Thanks to IT support, both the production offices and the head office always have access to information on different factories. The buyers who send out orders can also access summaries of the results of the audits, which can make the choice of supplier easier.
Long-term relationships with suppliers
We try to build up long-term relationships with our suppliers. To help our suppliers understand and live up to the requirements of our Code of Conduct we provide the opportunity for them to participate in workshops on international labour standards and how these are implemented. These workshops are usually organised by H&M, but sometimes by external partners such as the American organisation, BSR (Business for Social Responsibility), of which H&M is a member.