CEO Message

Interview with Karl-Johan Persson, CEO

The future success of any company today, including H&M, depends on long-term sustainability work and responsible processes. CEO Karl-Johan Persson gives his view on H&M’s progress in terms of sustainability, what he thinks about sourcing from emerging markets and what results have been achieved when it comes to the fair living wage strategy.

How sustainable is H&M?

I am really proud of what H&M has achieved and the positive impact we are making. We are leading the way today within several sustainability areas and I want us to continue to raise the bar. This is why I am so happy to see that sustainability is on the minds of so many people at H&M – every day and in all departments. When I hear collagues discussing sustainability over coffee, 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.

What does sustainability mean to you?

Just as when my grandfather founded H&M in 1947, we are a company with a long-term view and strong values. Our sustainability commitment is deeply rooted in our culture. We are well aware of what a gift it is to grow up and live in a democratic state that respects the environment and human rights, and it is in this spirit that we also want to operate globally – today and tomorrow. I believe that the future success of any company, including H&M, depends, amongst other things, on efficient and long-term sustainability work. We are genuinely interested
in how healthy H&M will be for future generations.  

What do you think about buying clothes from countries such as Bangladesh and Cambodia?

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? For many countries, the textile industry is the first step on this path. H&M indirectly creates employment for over a million people, not least women, in the countries that manufacture our products. According to the World Bank, the textile industry is an important contributor to poverty reduction. 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. So the question for us is not whether we should be present in developing countries, but how we do it. With that said, I want customers to feel proud of wearing clothes made in countries such as Bangladesh and Cambodia, but also to make sustainability demands on the companies they shop from.

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

Wages are a very complex issue. This is why we seek guidance from wage experts such as global trade unions, the ILO and the Fair Wage Network. They
believe our role as a brand and buyer is not to set the level of wages. Rather, wages should be negotiated between the parties on the labour market. We share
this view. It would be devastating if foreign companies such as H&M determined wage levels in any countries. In addition, the fact that we share suppliers with many other companies – both high-end and high street brands – makes collaboration even more important to be able to deal 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. 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. As collaboration is crucial, our strategy involves not only buyers such as H&M, but also suppliers, textile workers and national governments. We also collaborate with trade unions and NGOs, making it possible to contribute to change throughout the industry. And I am happy to say that our work within wages is showing progress. For example, we signed a global framework agreement with the global trade union IndustriALL and the Swedish trade union IF Metall to further push development forward. We share the belief that a well-functioning dialogue between the parties on the labour market and the strengthening of workers’ rights to collective bargaining are necessary for lasting improvements for workers in the textile industry.

All in all, we want to contribute to a well-functioning process that enables a fair living wage in every way we can. An important part of our fair living wage strategy is the Fair Wage Method, which has been developed by the independent Fair Wage Network. It focuses on establishing good pay structures as well as strengthening the ability for workers to regularly negotiate wages fairly.

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 thereby lift themselves out of poverty. If people
stopped consuming, society would be affected negatively. H&M wants to continue growing, but we are committed to growing responsibly. Our growth must always be balanced by sustainable practices.

Like other industries today, the fashion industry, however, is too dependent on natural resources and we need to change the way fashion is made. This is why we are so committed to our 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 and by investing in new innovation and technology, we are taking important steps towards a circular economy. To further speed up this development, the H&M Foundation has initiated the Global Change Award, an innovation challenge to find great new ideas that help close the loop on textiles. We are currently in the process of setting new goals that will take our sustainability work to the next level, across various key sustainability topics: circularity, climate, transparency, equality and fair jobs, for example. We do this in dialogue with our stakeholders, experts, scientists and many others. We follow a science-based approach aimed at setting new standards for the fashion industry.

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 fibres, suppliers paying their employees a fair living wage and the ambition to increase transparency so
customers can make informed choices. We have taken several important steps
towards a more transparent fashion industry. First, we have invested significant resources in developing our suppliers and building strong longterm relationships based on mutual trust and transparency. Second, we were amongst the first fashion companies to publish our supplier list to which, as the first fashion company, we have now added the second-tier suppliers. Third, this year’s reporting on our work related to human rights has been carried out in accordance with the UN Guiding Principles Reporting Framework. We are also committed to transparent reporting on our sustainability performance. One goal is to develop a
consumer labelling system that allows customers to compare products’ sustainability performance, including between different brands. This work is done in collaboration within the Sustainable Apparel Coalition, SAC. This will make it possible for customers to influence companies to a much greater extent than today. The more informed customers become, the more pressure they will put on companies to act sustainably. I have high hopes for this collaboration.

You can only drive real change if you have a collaborative mindset, no matter if it is collaboration about consumer labelling or something else. You cannot do it on your own; it is as simple as that. 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 such as the ILO, local and global trade unions, the UN Global Compact, NGOs, the WWF and Solidaridad. All of this makes it possible for us to set new even more ambitious sustainability goals that will be released in 2016 and that we hope will lead the way to a sustainable fashion future.


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