H&M CEO Answers All The Tough Questions in Sustainability Report

The future success of any company today, including H&M, depends on its long-term sustainability efforts and efficient, socially-responsible processes. In the company’s latest sustainability report, CEO Karl-Johan Persson offers insight into H&M’s progress in this area, including sourcing products from developing countries and the results achieved when it comes to the company’s Fair Living Wage strategy.

“I am really proud of what H&M has achieved and the positive impact we’re making,” Persson wrote in the report. “We are leading the way today within several sustainability areas and I want us to continue to raise the bar. I honestly feel we have come a long way. But, it is a very complex issue and we are certainly not at the end yet -- there is more to do, for us and the entire industry.”

H&M accomplished quite a bit in 2015. More than 12,000 tons of textile waste was collected in stores, and over 1.3 million pieces were made with closed-loop material, a 300 percent increase from the previous year. The use of renewable energy in all stores, offices and warehouses jumped from 27 percent to 78 percent, and CO2 admissions dropped drastically by 56 percent.

The company was named one of the 100 most sustainable global corporations of 2015 and one of the world’s most ethical companies. However, despite doing everything in its power to build a better, more sustainable and ethical brand, the company is still demonized for the role it plays in the fast fashion industry.

Many people are questioning whether or not fast fashion can really be sustainable and attacking the company for promoting consumption and unethical labor. But, in the spirit of transparency, H&M has done an incredible job addressing these concerns head on.

What do you think about buying clothes from developing countries?

When asked what he thinks about buying clothes from developing countries such as Bangladesh and Cambodia, Persson had this to say:

“Buying products made in developing countries is the most effective way to lift people out of poverty and give them opportunities for a decent life. I would say it is extremely important that developing countries have access to international markets -- how else can they make progress? H&M indirectly creates employment for over a million people, mostly women, in the countries that manufacture our products.”

“But obviously, we cannot just lean back and be content with the fact that many jobs are being created. With our size and global presence, we are working to ensure that these jobs are good jobs and that the way we do business makes places better.”

H&M is an incredibly large company with stores and suppliers in over 61 markets around the world. The company admits to having an impact on these communities, both good and bad, without a doubt. However, the brand is working to embrace the positive impacts and reduce the negative ones throughout the entire value chain.

What kind of results have you achieved with your Fair Living Wage strategy?

“Wages are a very complex issue,” Persson explained. “That is why we seek guidance from wage experts such as global trade unions, the ILO and the Fair Wage Network.” He went on to explain that the role of a brand or buyer is not to set the level of wages, but rather wages should be negotiated between the parties of the labor market.

It is not the role of H&M or any foreign company to determine wage levels in any country, Persson attests. In addition to this, the company shares suppliers with many other brands, which makes collaboration even more important for dealing with this challenge. It is a shared responsibility.

“We believe that everyone working in the textile industry, no matter what brand they are producing for, should earn a fair living wage,” Persson said. “For H&M, this is indisputable and the reason why we have developed a global fair living wage strategy that I am really proud of.”

This strategy involves not only buyers but also suppliers, textile workers and national governments. H&M also collaborates with trade unions and NGOs to contribute to the change happening throughout the industry.

An important part of the company's Fair Living Wage strategy is the Fair Wage Method, which was developed by the independent Fair Wage Network. It focuses on establishing good pay structures as well as strengthening the ability of workers to regularly negotiate wages fairly. The company has set the ambitious goal to increase wages for at least 60 percent of the garment workers in its supply chain by 2018.

What is your view on consumption?

“Consumption is necessary for jobs, generating taxes that pay for schools, hospitals and infrastructure, but also for developing countries to become part of international trade and lift themselves out of poverty,” Persson said. “If people stopped consuming, society would be affected negatively. H&M wants to continue growing responsibly. Our growth must always be balanced by sustainable practices.”

He went on to explain that, like many other industries, fashion is too dependent on natural resources, "therefore we have to change the way that fashion is made." This is why H&M is so committed to its mission to reuse garments and close the loop on textiles. By collecting old clothes and turning them into new, updated styles instead of letting them go to waste, the company is taking an important step toward a circular economy.

What are the main sustainability challenges for H&M and the fashion industry as a whole?

“It’s all about closing the loop by reusing textile fibers, suppliers paying their employees a fair living wage, and the ambition to increase transparency so customers can make informed choices,” Persson said.

The company has taken several important steps toward a more transparent fashion industry. From working with the U.N. to report on human rights-related work, to developing a consumer labeling system that allows customers to compare products’ sustainability performance.

However, “you can only drive real change if you have a collaborative mindset,” Persson said. “This is why we want to cooperate within the industry as well as across industry borders. This is why we treasure our dialogue with innovators and experts that help us develop new ideas. This is why we are so proud of our ongoing cooperation with stakeholders. All of this makes it possible for us to set even more ambitious sustainability goals and that we hope will lead the way to a sustainable fashion future.”

Image credits: 1) H&M 2) Flickr/Mike Mozart