#CONSCIOUS?

GROUP 9: PHI Khanh Le | Sebastian ORDONEZ | Jia Min NG | ZHOU Yuan Qing | Shi Yun OU
#H&M’s Ethical Reputation
#Bangladesh:
Rana Plaza tragedy (2013) – Tip of the Iceberg

• Bangladesh - World’s lowest minimum wage

($38 / month)
• Management of the 5 companies forced
employees to enter the Rana Plaza, despite
cracks reported on the walls
• Conditions of the Building: Additional floors
added, factories built in the upper floors
• Consequences: More than 2500 injured -
1138 fatal victims
• Is H&M related in anyway to this deathtrap
workplaces?
#Bangladesh:
H&M in Bangladesh – The biggest buyer

Any incident reported?

• 2010: 21 workers died in a fire at their supplier Garib & Garib. Factory lacked escape routes.
• 2011: Bangladesh Government proposed the Accord on Fire and Building Safety (US$3
billion fund to improve factory conditions). H&M refused to sign.
• After Rana Plaza tragedy, Accord on Fire and Building Safety was again considered. H&M
signed. Even though in its sustainability report, H&M refused to have any relation to the
factory in Rana Plaza.
• Company committed to pay US$640.000 a year (0,02% of its profits) for factory
improvements.
#Bangladesh aftermath:
Is H&M fulfilling its commitment?

• In a study released in October 2015, Clean

Clothes Campaign and other organizations
found a significant lag (60%) in the adoption of
safety measures agreed by H&M.
• The inspection was ONLY made to “Platinum”
and “Gold” suppliers.

168,734
#Cambodia:
A “Fairer” Living Wage?

• A commitment of the company to pay 850,000 textile

workers a “fairer” living wage by 2018.
• However, H&M have not showed any substantial
change on their remuneration policies.

An example:
• In Cambodia, garment industry represents 80% of total
exports. Many H&M suppliers (e.g., Dignity Knitters)
violate constantly the labor rights (forcing workers to
work longer for less, dismissing pregnant employees and
union members, etc.)
• Minimum living wage in Cambodia is US$140/ month.
Workers are struggling to get US$177/ month.
• H&M does not take any responsibility on such
negotiations, and keep on doing business with those
factories.
#CONSCIOUS
About H&M’s existing sustainability policies

CONCEPT:
Began with the opening of the H&M Conscious Foundation in 2007, H&M’s “Conscious Lifestyle” project
aims offering fashion and quality at the best price in a sustainable way.

“It is about the best value, not the cheapest price.”

Karl-Johan Persson, CEO of H&M

• Provide fashion to conscious customers

• Choose & rewards responsible partners
• Be ethical
THE SEVEN COMMITMENTS:
• Be climate smart
• Reduce – Reuse – Recycle
• Use natural resource responsibility
• Strengthen communities
#CONSCIOUS
Evaluation of H&M’s Sustainability Policies

CATEGORY GOAL REALITY

Roll out the “Conscious” line for environmental The “Conscious” line is only a small part of the entire
friendly customers collection.

Educate customers about the right garment Customers education program is ineffective.
care process Some of H&M's organic cotton have been found
Conscious Customers contaminated with genetically modified organisms(GMOs)

Supply chain transparency is still low; H&M's use of organic

All cotton to come from more sustainable cotton has increased, but it is still a very small proportion of
sources by 2020 their total production(2013:5%)

Partnership with WWF; promote responsible use Only finished in Yangtze (China) and Brahmaputra
of water along the product's lifecycle (Bangladesh), this needs to be done at a larger scale
(educate manufacturer, farmers and
Use Natural Resource consumers)
Responsibly
Water reduction in fabric and raw material Only done with denim products
treatment processes
#CONSCIOUS
Evaluation of H&M’s Sustainability Policies
CATEGORY GOAL REALITY
“Fair living wage" policy: a wage cover Bangladesh-world's lowest minimum wage; no substantial change on
the worker and their family's basic remuneration policies yet; workers could be dismissed randomly
Choose & Rewards needs and a discretionary income.
Responsible Partners Ambiguous publicity statement and lack of numbers; H&M blames
(Wage) unauthorized subcontracting and denies having any responsibility.

Encourage suppliers providing better Deathtrap workplaces: Rana plaza tragedy; inspection was only
Choose & Rewards working conditions for workers made to certain suppliers
Responsible Partners All of H&M's primary suppliers were behind schedule in making
(Working conditions) essential safety renovations.

Animal Welfare Policy: H&M and Humane Society International collaborate on new animal
Choose & Rewards collaborations with HIS and RWS. welfare commitments to protect farm animals and ban cosmetics
Responsible Partners animal testing globally
(Animal welfare) Progressing

Customers can hand in old clothes;
launch new collections from worn
Reduce, Reuse, Recycle clothes
(Garment collecting)
In its latest marketing campaign, named 'Close the Loop,' H&M
encourages consumers to recycle their unwanted garments. H&M
collected 7,684 tons of textiles in 2014.
Only 20% of the fibers from the collected apparel are recycled and
reused, the company remains vague on what happens to the
remaining 80%.
#Pain-points
in H&M’s Sustainable Strategies

• Notorious example of poor working condition and low wages

for worker. Despite the fact that H&M claimed it has little
power in influencing how much factories pay their workers, as
the biggest players in the supply chain, it has the power to
switch factory partners easily, but H&M did not act on this
aggressively.
• About taking responsibility: Hiding behind layers of
outsourcing and subcontracting to avoid responsibility;
• Lack of international standards, especially those stipulated
under the Global Organic Textile Standard or World Fair
Trade Organization.
• As cheap production cost is one of the key factors of its
successful business model, H&M simply cannot be compared
to brands that were born with the idea of building sustainable
collections and that are really fighting the machine to do
thing their own way.
#Insights
to improve H&M’s Sustainable Strategies

• The main issue for H&M is that it has a tainted reputation in

the textile industry when it comes to protecting human
rights. Therefore, the most urgent matter which H&M needs
to work on is to emphasize on improving both living and
working condition of its factory partners, as these issues
have decisive impacts on H&M’s reputation.
• At the same time, H&M needs to follow and stay true to
the seven commitments. However, the industry would
require H&M to adjust its actions under these commitments
and make them more achievable, as well as to provide
concrete figures to verify its results.
• To improve faster its brand reputation, H&M needs to focus
more on initiatives which it has total control over.
• Additional actions which H&M can take to improve its
sustainable strategies are depicted in the next session of
this presentation.
#Development Initiatives
to bring about comprehensive sustainable strategies
CATEGORY NEW ACHIEVABLE PROPOSALS
No PVC, no sand blasting
Conscious Customers
To set a clear number in the increase of the portion of organic cotton used to produce clothes
Using more sustainably certified wood
Use Natural Resource Responsibly
Switch to use renewable in their stores globally

Responsible sourcing: track and monitor the whole process, instead of paying contracts with
Choose & Rewards Responsible Partners parents factories, subcontracted companies should also meet the brand's sustainability standards
(Wage) Ethical trade: ensuring parent companies and outsourcing companies are free from discrimination,
especially towards women

Change KPI: working conditions (free, safe and equal) should be considered when evaluate the
Choose & Rewards Responsible Partners partnerships between H&M and its suppliers
(Working conditions) Speak it out: take responsibility of worker’s life. Instead of hiding behind, H&M could mark and
learn from the incidents like Bangladesh tragedy

Choose & Rewards Responsible Partners Next step: stop using leather, skins, feathers or fur in any products, collaborations or licensed
(Animal welfare) products

Reduce, Reuse, Recycle

Educate consumers on how to properly maintain their clothes when washing and caring
(Garment collecting)
#Implementations
Provide fashion for conscious customers

• Change the slogan to “Provide consciousness for fashion customers”

• New slogan covers a wider segment of customers, improves H&M’s image and reflects
greater commitment on strengthening the link between its sustainability efforts and its
customers

Extract from the Proof?

website of H&M:

Vague statements
#Implementations
Responsible Partners

• Hiring an independent third party to

audit and assess the wage and
working conditions and publishing a
report that would be released to the
public

• Consider the capacity of the factories

against placing urgent bulk orders –
Instead of merely negotiating wages
with suppliers, consider first the validity
of your own demands – allowing
suppliers to say NO
#Implementations
Reduce Waste
• No concrete evidence of what happens to the garments that have been collected for
recycling
• We only know from H&M websites and their youtube videos that they aim to ‘close the
loop on textiles’

Extract from the

website of H&M:

What to do: Vague statements,

• Reinforce transparency in the processing of all materials unconvincing and
from recycling campaigns perfunctory
• Independent third party audit reports on the recycling
statistics on the H&M webpage should be made available
#Evaluation
of the revamped sustainable strategies
Actions Evaluation

• Generate more interest within customer

1. Change of slogan
segments, increase their consciousness
• Reinforces the credibility of H&M’s
sustainability efforts
2. Responsible partners
• Improve working conditions , factory
environment and wage policies
• Clear communication to people who
have donated their old clothes
• Knowing how their old clothes are
3. Total transparency in recycling efforts making significant impact, e.g. in new
season arrivals, or donated to the less
fortunate, will motivate more customers
to follow suit and take recycling seriously
#Bibliography
• http://qz.com/516038/report-most-of-hms-best-factories-in-bangladesh-still-dont-have-working-fire-exits/
• http://www.theguardian.com/world/2015/jun/01/rana-plaza-collapse-dozens-charged-with-murder-bangladesh
• http://www.nytimes.com/2013/11/13/opinion/a-living-wage-in-bangladesh.html?_r=0
• http://corpwatch.org/article.php?id=15840
• http://www.huffingtonpost.com/judy-gearhart/fast-fashion-giant-workers-rights_b_8247764.html
• http://www.cleanclothes.org/resources/publications/hm-bangladesh-september-2015.pdf
• http://jezebel.com/h-ms-cambodian-garment-workers-are-only-asking-for-177-1748477514
• http://www.cleanclothes.org/news/press-releases/2015/04/09/h-ms-sustainability-promises-will-not-deliver-a-living-wage
• http://www.fastcompany.com/1526476/why-­‐hm-­‐selling-­‐fake-­‐organic-­‐cotton
• http://fashionhedge.com/2014/10/01/hm-­‐and-­‐sustainability/
• http://www.theguardian.com/business/2012/apr/07/hennes-­‐mauritz-­‐h -­‐and-­‐m
• https://fashionunited.uk/news/fashion/is-­‐h-­‐m-­‐really-­‐a s-­‐green-­‐as-­‐t hey-­‐seem-­‐to-­‐be/2015100917940
• http://www.peta.org/about-­‐peta/milestones/
• http://about.hm.com/en/About/sustainability/commitments/conscious-­‐fashion.html#cm-­‐menu
• http://about.hm.com/en/About/sustainability/commitments/reduce-­‐waste/garment-­‐collecting.html