Our value chain around the world

Our value chain is connected to countless people, communities, ecosystems and other businesses around the world – that is what it means to be part of the global economy. Our business’ social, environmental and economic impact is significant and far-reaching, and we want it to be as positive as possible.

This means creating positive change along our value chain – from the farms and factories that supply us to our millions of customers. We can do this in our own operations, but what about the parts of the value chain that lie outside of our direct control? Our strategy is grounded on the idea that we must use the size and scale of our business to leverage change and create maximum positive impact and minimum negative impact. One particular focus area is the protection and improvement of human rights along our value chain.

Sustainability starts at the drawing board. We need to create fashion without compromising on design, quality, price or sustainability. Our choice of materials and our designs impact the environment and the people who make and wear our clothes. We can make our impact more positive, for example, by choosing sustainable materials and reducing what ends up on the cutting room floor.

Processing raw materials such as cotton is an area we must pay close attention to. It involves high water and chemical use, and it is often associated with poor working conditions. There is a potential risk of child and forced labour, and concerns around land rights issues (identified as salient human rights issues for us). There are also considerable traceability challenges as we do not always have full insight on where our conventional cotton comes from. Our choices matter, which is why we work to use raw materials as efficiently as possible, making and promoting sustainable raw material choices and working towards our 100% circular ambition.

When our business partners buy yarn and fabric, we need to consider water use (a salient human rights issue for us), chemical use, working conditions and greenhouse gas emissions. Generally speaking, we do not have direct business relationships with mills. Instead, we work with organisations such as Solidaridad and the Natural Resources Defence Council (NRDC) to help mills improve their performance. We have already integrated fabric and yarn mills that are involved in making about 56% of our products into our supplier assessment system.

Over 1.6 million people work in the factories of our business partners, 65% of whom are women. Social security, wages, freedom of association and collective bargaining, health and safety, and working hours are all salient human rights issues. Our industry must ensure fair living wages, reductions in overtime and workplace safety to become socially sustainable.

Transport represents approximately 2% of the greenhouse gas emissions in a garment’s lifecycle. By choosing the right modes of transport, we can reduce this impact even further. And as an important customer of the transport companies we work with, we have the opportunity to influence their awareness and action on environmental issues as well.

We have over 4,351 stores across 64 markets. As we grow, enter new markets and employ new people, we need to keep living up to our values and ensure an inspiring and healthy working environment. Discrimination and harassment are human rights issues and our internal policies, such as our Global Diversity, Inclusion and Equality Policy and Non- Harassment Policy, are vital to ensure a good workplace. Our customers rightfully expect good quality products and shopping experiences. As part of that, we need to ensure the privacy of their and our colleagues’ data, and to advertise in a responsible way.

Caring for clothes at home represents about 18% of the greenhouse gas emissions in a garment’s life. Our challenge is to create affordable fashion that our customers will love from season to season and that is easy to care for in a low-impact way. We need to inspire our customers to be more conscious in the way they care for their garments and make it easy for them to not let fashion end up in landfills.

Our influence
High
Climate impact
0%
Water impact
0%
Social impact
Low
Our influence
Medium
Climate impact
11%
Water impact
87%
Social impact
High
Based on countries with organic cotton or Better Cotton production for H&M. Cotton is our most important raw material. Conventional cotton is not currently traceable. Our goal is to by 2017 create full traceability for cotton and by 2020 use only cotton from more sustainable sources (such as organic cotton, Better Cotton or recycled Cotton).
Our influence
Medium
Climate impact
47%
Water impact
6%
Social impact
High
Based on data available for fabric mills involved in about 80% of our total production volume.
Our influence
Medium
Climate impact
6%
Water impact
1%
Social impact
High
Our influence
Medium
Climate impact
2%
Water impact
0%
Social impact
Low
Our influence
High
Climate impact
5%
Water impact
0%
Social impact
High
Our influence
Low
Climate impact
18%
Water impact
8%
Social impact
Medium

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