How we report
We are committed to transparent reporting on the progress we make towards achieving our sustainability strategy.
We are committed to transparent reporting on the progress we make towards achieving our sustainability strategy.
The H&M group sustainability report is produced annually and includes sustainability strategies, challenges, activities, goals and performance for the global group operations of H & M Hennes & Mauritz AB (also called H&M group in this report), including all its brands (H&M, COS, Weekday, Cheap Monday, Monki, H&M Home, & Other Stories, ARKET), as well as its wholly-or partially-owned subsidiaries globally during our financial year from 1 December 2016 to 30 November 2017, unless stated otherwise. For a full list of entities, please see our Annual Report 2017.
We address key impacts (positive and negative) across our value chain, and this is reflected in our reporting wherever possible. This means that our reporting scope often goes beyond or even outside of our own operations, for example covering business partners anufacturing our products. Information limited in scope such as specific brands, parts of our operations or our value chain is clearly stated in each respective section of this report. Unless stated franchise operations are not included. The report has been reviewed by the highest executive management and external assurance has been performed for selected indicators (clearly marked where applicable, as well as in regards to materiality and stakeholder engagement). Additional stakeholder comments and interviews have been included throughout this report.
All data is collected by our sustainability teams from relevant functions within our organisation and from external parties such as business partners or implementation partners. This data is always reviewed by our internal controlling team, relevant experts in our sustainability team and expert functions following a two-tier quality control principle. Any extrapolations or estimations are clearly indicated. The same goes for any changes in data methodologies or scopes that may influence data comparability. All data is based on the best possible systems that are currently available to us and where applicable aligned with recognised standards. However, this needs to be seen in the light of continued improvements in data systems, methodologies and scientific uncertainties. For example, while our GHG emissions accounting and reporting is aligned with the GHG Protocol, the emission factors we use are from publicly-available sources such as the International Energy Agency (IEA 2017), the Network for Transport Measures (NTM), Reliable Disclosure System for Europe (RE-DISS) and supplier-specified emission factors. The global warming potential (GWP) factors used in the calculation of CO₂e are based on the IPCCs Fourth Assessment Report (AR4) over a 100-year period. GHG emission data, as with other data, is subject to inherent uncertainties due to incomplete scientific knowledge used to determine emission factors and resulting effects on measurements and estimations. The reported energy usage is based on invoiced data, data from realtime electricity meters and data as reported by transport providers. Conversion between fuel usage and energy content has been done using energy values specified by the supplier or by using tabled values provided by national bodies.
Our material reporting requires us to make assumptions on waste factors, weight per sizes, etc. We are continuously working to improve those aspects of reporting that may lead to minor updates in our yearly material consumption reporting, as well as our data systems and accuracy to report on material consumption. Unless otherwise specified, all data concerning business partners and supplier factories includes all suppliers and factories that were active and approved for production during the reporting period. Factories included in our scope are tier 1 manufacturing or processing (i.e. washing or dyeing), factories that are owned or subcontracted by our suppliers and, where stated, selected tier 2 suppliers and suppliers for non-commercial goods (such as store interior suppliers). The tier 2 suppliers we have selected so far are mostly fabric and yarn suppliers that account for about 60% of our products.
Monetary amounts are reported mainly in the currency of transaction. Additional currency values are conversions as approximate figures based on the conversion rate on 30 November 2017, unless stated otherwise. Additional information is provided at sustainability.hm.com and in our financial and corporate governance reporting. Our most recent sustainability report was published in April 2017. We are signatories to the UN Global Compact and our annual sustainability report also serves as our Communication on Progress (COP) for the UN Global Compact as well as the CEO Water Mandate.
This report is prepared in accordance with the GRI Standards: Core Option. We have additionally included material indicators from the pilot of the Apparel and Footwear Sector Supplement. You can download a detailed GRI index at sustainability.hm.com
In 2015, we were one of the first companies in the world to report on human rights in line with the UN Guiding Principles Reporting Framework. This framework is the first comprehensive guidance for companies to report on human rights issues in line with their responsibility to respect human rights set out in the UN Guiding Principles on Business and Human Rights. The detailed references to the UN Guiding Principles Reporting Framework can be found at sustainability.hm.com
As part of this, we identified our salient human rights (page 92) in a comprehensive process we conducted in 2015, involving a variety of internal and external stakeholders. Going forward, we plan to conduct this process every third year, or as deemed necessary. We will review the relevance and definitions of the issues identified and discuss emerging issues annually. This complements our materiality assessment described below which identifies human rights as a highly material topic with further detail and granularity.
1. Identification: Mapping aspects and creating a gross list
On a yearly basis, we review our gross list of aspects based on an analysis of external standards, such as the GRI Standard topic list, legislation, investor and NGO questionnaires, peer reviews, business intelligence, lifecycle assessment results, stakeholder dialogues and stakeholder reports, and media coverage. The gross list has been checked against GRI’s Sustainability Context and Stakeholder Inclusiveness tests most recently in 2016.
2. Prioritisation: Scoring and prioritising topics**
To prioritise the most material topics from this gross list, we scored the different aspects in regards to their frequency raised by stakeholders and their significance for economic, environmental and social impacts. Both categories were broken down into a number of different categories, such as frequency raised by key defined sustainability stakeholders and experts (weighted x3), frequency featured in media (weighted x1) and frequency raised in key sustainability benchmarks, rankings and indices (weighted x1) as well as social and environmental impacts (weighted x1) and importance to business strategy (weighted x2). Scores were given by at least two internal experts per category and were based on lifecycle assessment (LCA) data and existing strategy documents. Additionally, we selected at least one representative from each of our key stakeholder groups (which includes customers, colleagues, communities, suppliers and their employees, industry peers, NGOs, IGOs, policymakers and investors). Eleven stakeholder representatives were asked to provide feedback on this materiality matrix. Such full-on materiality assessments were conducted in 2013 and 2016, with reviews conducted in all other years since.
3. Regular review of our materiality matrix with key stakeholders*
We review our materiality matrix on an annual basis. This can mean conducting a full materiality analysis (as conducted in 2013 and 2016) as described in 1 & 2 or a review of previous year’s matrix considering feedback received.
In spring 2017, we launched our updated sustainability strategy, which has been developed in close cooperation with several external and internal key stakeholders, partners and experts. In connection to this, we arranged a large-scale stakeholder meeting inviting over 300 representatives from our stakeholder communities to a full day of workshops and discussions, including feedback on our report and the focus areas chosen in our strategy.
Additionally, we have introduced a standardised stakeholder survey. The survey was developed together with Business for Social Responsibility (BSR), which also conducted the 2017 survey. The survey assesses both the quality of our stakeholder engagement work as well as feedback on our strategy and performance towards it. The feedback we received widely confirmed our materiality matrix, with some adjustments made, such as an increased focus on diversity & inclusiveness.
H&M group conducted a thorough process of identifying its salient human rights issues in 2015. Salient human rights issues are the human rights at risk of the most severe negative impact because of our operations and supply chain. This process supplements our materiality analysis in the area of human rights, with an understanding of risk to people.
We started out by defining who we impact through our business activities throughout our value chain, especially recognising those who potentially are more vulnerable and hence are more at risk, such as migrant workers, women and children. The result of this mapping was a list of both potential and actual human rights impacts. From this list, we identified those which were salient by applying two criteria: the severity of the potential impact and the likelihood that this impact will occur.
Consultations regarding the method and input to the identified salient human rights issues were held (both internally and externally) with almost 100 people. Internally, consultations were held through workshops and dialogues on all levels of the company and across functions. Externally, consultations were held with experts, organisations, academia and local stakeholders.
This process does not only guide us on the human rights issues relevant to report on according to the UNGP’s Reporting Framework, it also informs our strategies and work to address these issues going forward. To ensure our list of salient human rights issues remains relevant, we will review these issues annually, and the full process, including input from external stakeholders, will be conducted approximately every three years, or more frequently if necessary.
While we take steps to mitigate all risks, salience guides us in what to focus on within human rights and hence informs our strategies and work. The most recent review took place at the end of 2017 and resulted in slightly adjusted definitions on, for example, social security, highlighting that we refer to social security linked to employment. We also expanded child labour to the broader children’s rights due to the various ways our activities directly and indirectly impact children, while still recognizing child labour as an issue of great severity.
Identification, prevention and remediation of our salient human rights issues are found throughout the report. They are also referenced in our annual update of salient issues presented on page 92 in the Sustainability Report 2017.
*Please find an independently-verified assurance statement on defining report content and topic Boundaries GRI 102-46 on pg 97. ** Please find an independently verified assurance statement on list of material topics GRI 102–47 on pg 97.
We are committed to transparent reporting and want to provide information in a way that is most valuable to our diverse stakeholders.
We dedicate major resources to monitor our suppliers` sustainability performance and support them in making improvements.