H&M Issues Annual Sustainability Report

The report details the steps the Swedish fast-fashion giant is taking in countries such as Bangladesh and Cambodia to improve wages and factory conditions.

H&M’s 12th annual sustainability report will be released April 10, detailing the steps the Swedish fast-fashion giant is taking in countries such as Bangladesh and Cambodia to improve wages and conditions for factory workers.

This story first appeared in the March 27, 2014 issue of WWD.  Subscribe Today.

“The past couple of years have led to initiatives such as the launch of the Fair Living Wage Road Map, which we did in November,” said Helena Helmersson, global head of sustainability at H&M. “We’re trying to raise the bar. It’s a road map for how we can push for higher wages.”

The document’s key points include how H&M can improve its own purchasing practices and how suppliers can improve wage structures within their factories. The road map also discusses empowering factory workers through dialogue and education, and influencing government.

Karl-Johan Persson, H&M’s chief executive officer, in 2012 met with Bangladesh Prime Minister Sheikh Hasina to discuss the importance of raising the country’s minimum wage. The meeting followed two letters sent in 2010 by H&M to the government. After the letters were sent, the country’s minimum wage was increased by up to 81 percent, but systems for annual reviews are still lacking. H&M’s leadership also met with Cambodian Prime Minister Hun Sen in October, three months before there was a deadly government crackdown on protestors seeking higher wages in the nation’s apparel industry.

Helmersson said a major part of these discussions involved how to create healthier industrial relations to create stability in the market. “The result of these meetings might be a little bit long term, but we’re very encouraged by what has happened,” she said. “They put together a wage committee and wage board.”

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In Bangladesh, there’s very low union representation in textile factories. This is due to the unions themselves, Helmersson said, adding, “They’re scattered and not unified and strong.

“We’re empowering workers to negotiate their own rights,” she said. “We’re trying to build the right structure in these societies. We’re working with our suppliers. We have a pilot with suppliers that shows successful results in Bangladesh. We’re strengthening the relationship between workers and factory management. We’re working with democratic elections and worker participation committees. We’re helping out with training of both workers and managers. We can see great results. With democratically elected committees, there are heavy questions coming up, such as overtime hours and compensation.”

Workers won’t wait for the factory owners and government to catch up. “By 2021, Bangladesh will be considered a middle-income country,” said Helmersson, who lived in Bangladesh with her family for two years and worked as human resources manager for the 400-person office in Dhaka. “If you live there, you can see the improvement. When Rana Plaza happened, we have policies against that.” The collapse of the Rana Plaza factory building last April killed more than 1,000 workers in the deadliest disaster in the garment industry’s history.

H&M backs the Accord on Fire and Building Safety in Bangladesh. “With that will come big changes,” said Helmersson. “The accord is happening in parallel to the government’s efforts.” So far, Inditex, H&M, PVH Corp., Britain’s Tesco and Primark, and COFRA Holding AG’s C&A have given their support. There is a May 15 deadline to sign more brands.

“I believe in collaboration,” Helmersson said. “To a large extent, we have been collaborating with different stakeholders for 10 years. More initiatives today are with multistakeholders.” An example is the Sustainable Apparel Coalition. H&M has been involved with developing sustainability assessment tools called the Higg Index 2.0. Helmersson said 40 percent of the apparel market uses the Higg Index.

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The latest report coincides with the launch of H&M’s latest Conscious collection and Exclusive Conscious collection, also bowing on April 10, which is Earth Day.

The two Conscious collections have moved forward with new materials and fibers that help preserve the earth.

H&M is also closing the gap on the textile loop. The retailer was the first fashion company to give customers around the world a way to recycle old clothes from any brand in any condition. The retailer partnered with Global Green. Now H&M is beginning to use some of the donated garments in new clothing. “These jeans I’m wearing consist of 20 percent fibers from our garment collection that customers gave us,” said Helmersson.

“With all the technology, our goal is to find ways to use the fibers over and over again. “A big challenge is how to decrease the environmental footprint and use less water.”