#CONSCIOUS?

GROUP 9:

PHI Khanh Le | Sebastian ORDONEZ | Jia Min NG | ZHOU Yuan Qing | Shi Yun OU

#H&Ms Ethical Reputation

#Bangladesh:
Rana Plaza tragedy (2013) Tip of the Iceberg
Bangladesh - Worlds 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&Ms existing sustainability policies
CONCEPT:
Began with the opening of the H&M Conscious Foundation in 2007, H&Ms 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

THE SEVEN COMMITMENTS:

Provide fashion to conscious customers

Choose & rewards responsible partners
Be ethical
Be climate smart
Reduce Reuse Recycle
Use natural resource responsibility
Strengthen communities

#CONSCIOUS
Evaluation of H&Ms Sustainability Policies
CATEGORY

GOAL
Roll out the Conscious line for environmental
friendly customers

The Conscious line is only a small part of the entire

collection.

Educate customers about the right garment

care process

Customers education program is ineffective.

Some of H&M's organic cotton have been found
contaminated with genetically modified organisms(GMOs)

Conscious Customers
All cotton to come from more sustainable
sources by 2020

Use Natural Resource

Responsibly

REALITY

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

cotton has increased, but it is still a very small proportion of
their total production(2013:5%)

Partnership with WWF; promote responsible use

of water along the product's lifecycle
(educate manufacturer, farmers and
consumers)

Only finished in Yangtze (China) and Brahmaputra

(Bangladesh), this needs to be done at a larger scale

Water reduction in fabric and raw material

treatment processes

Only done with denim products

#CONSCIOUS
Evaluation of H&Ms Sustainability Policies
CATEGORY

Choose & Rewards

Responsible Partners
(Wage)

Choose & Rewards

Responsible Partners
(Working conditions)

Choose & Rewards

Responsible Partners
(Animal welfare)

Reduce, Reuse, Recycle

(Garment collecting)

GOAL

REALITY

Fair living wage" policy: a wage cover

the worker and their family's basic
needs and a discretionary income.

Bangladesh-world's lowest minimum wage; no substantial change on

remuneration policies yet; workers could be dismissed randomly

Encourage suppliers providing better

working conditions for workers

Deathtrap workplaces: Rana plaza tragedy; inspection was only

made to certain suppliers
All of H&M's primary suppliers were behind schedule in making
essential safety renovations.

Animal Welfare Policy:

collaborations with HIS and RWS.

H&M and Humane Society International collaborate on new animal

welfare commitments to protect farm animals and ban cosmetics
animal testing globally
Progressing

Customers can hand in old clothes;

launch new collections from worn
clothes

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%.

Ambiguous publicity statement and lack of numbers; H&M blames

unauthorized subcontracting and denies having any responsibility.

#Pain-points
in H&Ms 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&Ms 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&Ms 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
Conscious Customers
Use Natural Resource Responsibly

NEW ACHIEVABLE PROPOSALS

No PVC, no sand blasting
To set a clear number in the increase of the portion of organic cotton used to produce clothes
Using more sustainably certified wood
Switch to use renewable in their stores globally

Choose & Rewards Responsible Partners

(Wage)

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

Choose & Rewards Responsible Partners

(Working conditions)

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

Choose & Rewards Responsible Partners

(Animal welfare)

Next step: stop using leather, skins, feathers or fur in any products, collaborations or licensed
products

Reduce, Reuse, Recycle

(Garment collecting)

Educate consumers on how to properly maintain their clothes when washing and caring

#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&Ms image and reflects
greater commitment on strengthening the link between its sustainability efforts and its
customers
Extract from the
website of H&M:

Proof?

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:
Reinforce transparency in the processing of all materials
from recycling campaigns
Independent third party audit reports on the recycling
statistics on the H&M webpage should be made available

Vague statements,
unconvincing and
perfunctory

#Evaluation
of the revamped sustainable strategies
Actions

Evaluation

1. Change of slogan

Generate more interest within customer

segments, increase their consciousness

2. Responsible partners

Reinforces the credibility of H&Ms

sustainability efforts
Improve working conditions , factory
environment and wage policies

3. Total transparency in recycling efforts

Clear communication to people who

have donated their old clothes
Knowing how their old clothes are
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