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Sustainability at H&M: Long Road Traveled, Long Road Ahead

If you're still not convinced that sustainability can be a big marketing tool for global brands, then take a glance at the latest "Conscious Actions" report from Hennes & Mauritz AB - known to clothing shoppers around the world as H&M.

Or more than a glance. The report is 92 pages long, in full color, crammed with charts, graphs and text detailing the Sweden-based apparel retailer’s efforts to promote water and energy conservation, organic materials, recycling and fair labor standards globally. Illustrated, of course, with the requisite skinny models.

Slick as the report is, you could hardly call it greenwashing. Among the independent monitors giving H&M high marks for its sustainability efforts are the Dow Jones Sustainability Index, FTSE4Good Index Series, Global 500 Climate Performance Leadership Index of the Carbon Disclosure Project, and Ethisphere’s list of The World’s Most Ethical Companies. Even Greenpeace calls H&M a “leader,” saying that the company “is matching its commitment with fashion-forward action.” In particular, the activist organization cites H&M’s progress toward phasing out the use of 11 groups of hazardous chemicals.

Nor is H&M a newcomer to the sustainability bandwagon. The company has been issuing its report for the past 12 years, tying it to the Global Reporting Initiative (GRI), an NGO-driven effort to standardize reporting on sustainability, with a subset for retailing and brands.

A lot has changed over that time, says Henrik Lampa, H&M’s environmental sustainability manager. The most dramatic development has been the explosion of social media, which give retailers and manufacturers no place to hide when they fail to live up to their pledges.

At the store level, H&M has tinkered with elements such as lighting to save on energy (and, possibly, create a more dramatic environment in which to show off its clothing). But the real work takes place further up the supply chain. Early efforts focused on eliminating toxic chemicals used in raw materials, production, washing, dyeing and finishing. Lampa says the company collaborated with other brands, through efforts such as the GRI, to come up with strict new standards for water quality.

After that, H&M began working on water conservation during production, an effort complicated by the fact that it owns no factories. It had to encourage suppliers to become “self-motivated” in the judicious use of both water and energy, says Lampa. As a result, the company has reduced water used in denim production by 340 million liters.

Next came a focus on raw materials. H&M was an early supporter of the Better Cotton Initiative, launched in 2005 to promote the use of sustainable cotton throughout global supply chains. (In addition to addressing the environmental implications of cotton production, BCI also targets unfair and abusive labor practices, which remain common in certain countries.)

H&M is now the biggest user of organic cotton, according to Lampa. Over the past two years, it has doubled its use of sustainable cotton, with 15.8 percent of that commodity certified as organic, BCI-compliant or recycled in 2013. The goal is to rely entirely on sustainable sources of cotton, with 100-percent traceability, by 2020 at the latest.

H&M is also leaning more heavily on the use of recycled wool, polyester and nylon, to create what it dubs “Conscious Collections.” At the same time, it’s encouraging the recycling of entire garments, by urging customers to take unwanted items back to the stores. Twenty percent of the company’s recycled content comes from collected garments, which have topped 3,000 metric tons so far.

No company, regardless of size, should go it alone in a global sustainability effort. In addition to participating in programs such as the GRI, H&M is part of the Sustainable Apparel Coalition, a partnership of brands, retailers, manufacturers, governments and NGOs representing around 40 percent of global purchasing power. SAC measures sustainability down to the product level, scrutinizing designs, materials, transportation modes and recycling. SAC produces the Higg Index, a suite of sustainability tools that covers manufacturing facilities, brands and products. It standardizes the measurement of environmental and social impacts of apparel and footwear across the product lifecycle.

The human side of supply-chain sustainability is more problematic to address. No amount of glossy reports or high-profile partnerships can mask the fact that serious labor abuses continue to occur around the world with alarming regularity. The string of factory fires and building collapses that occurred over the past year and a half in Bangladesh are stark reminders that corporate rhetoric doesn’t always translate into acceptable working conditions at the production level.

Lampa says H&M was the first retailer brand to sign the Bangladesh Accord on Fire and Building Safety, drawn up in the wake of the recent tragedies. Some 165 others have now joined that agreement. The company has also come out in support of higher wages for Bangladesh textile workers, even though chief executive officer Karl-Johan Persson recently said that such an increase would likely result in the loss of some production to other countries.

Lampa said H&M has endorsed worker health and safety standards established by the United Nations and International Labour Organization. It actively promotes such groups as Better Work, the Fair Labor Association and Fair Wage Network. But monitoring every single production site is an enormous task, and only a fraction of the 5,000 factories in Bangladesh alone have been inspected so far, according to Lauren Compere, managing director with Boston Common Asset Management, LLC.

It can be tough convincing suppliers to fall into line with rigorous safety and environmental practices. Efforts to promote efficiency and sustainability within the factories “have been very frustrating,” says Lampa. “We’ve not really managed to crack that nut.” For H&M, the key lies in seeking out willing suppliers and funneling its business to them.

For all their progress in promoting sustainability and human rights around the world, H&M and its counterparts in the apparel industry have a long ways to go.

Next: Going green in Bentonville.

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