Climate Change Data

Environmental Metrics

ESG Focus Areas

• Working conditions
• Labour standards
• Human Rights
• Environmental impact
• Product safety
• Supply chain management
• Governance

Environmental Achievements

• Reduced cardboard waste by 9% despite an 18% increase in total volume.
• Initiated use of organic cotton in children's wear (small volumes).

Social Achievements

• Substantial improvements in fire safety and working environment in supplier factories.
• Significant improvements in working hours and wages in supplier factories.
• Agreement signed with UNI (Union Network International) on ILO principles.
• Vocational training program in Bangladesh for ex-child laborers.

Governance Achievements

• Formation of an audit committee.

Climate Goals & Targets

Environmental Challenges

• Violations of labor laws concerning working hours and wages in supplier factories.
• Difficulties in obtaining reliable carbon dioxide emission data from air transport.
• Challenges in measuring water usage and emissions.
• Complexity in measuring total waste and its fractions.
• Difficulties in detecting forced labor and discrimination.
• Challenges in ensuring freedom of association in certain regions (e.g., Bangladesh EPZs).

Mitigation Strategies

• Implemented a grading system for suppliers with sanctions for non-compliance.
• Developed improved inspection tools and checklists.
• Increased training and education for inspectors and suppliers.
• Collaboration with NGOs and trade unions.
• Developed minimum environmental requirements for transportation service providers.
• Initiated the SEMS project to improve environmental performance of suppliers.
• Continuous improvement of monitoring program and development of new tools and methods.

Supply Chain Management

Supplier Audits: 2232 inspections in 2003

Responsible Procurement

• Code of Conduct
• Chemical Restrictions
• Safety Requirements for Baby's and Children's wear
• Supplier assessment strategy focusing on long-term relationships and key suppliers.

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Not disclosed

Opportunities

• Not disclosed

Reporting Standards

Frameworks Used: GRI

Certifications: Null

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Goal 1: No Poverty
• Goal 8: Decent Work and Economic Growth
• Goal 10: Reduced Inequalities
• Goal 12: Responsible Consumption and Production
• Goal 13: Climate Action

Initiatives contribute to these goals through improved working conditions, environmental protection, and sustainable development.

Sustainable Products & Innovation

• Not disclosed

Awards & Recognition

• Citation from FAR (Swedish professional institute for authorized public accountants) for 2002 CSR report.

Environmental Metrics

ESG Focus Areas

• Working conditions
• Environmental impact (especially CO2 emissions and water pollution)
• Governance (Code of Conduct, chemical restrictions)

Environmental Achievements

• Increased use of organic cotton from 5 tonnes in 2004 to over 40 tonnes in 2005.
• Participation in the Better Cotton Initiative.

Social Achievements

• Implementation of the Full Audit Programme (FAP) for factory monitoring.
• Participation in multi-stakeholder initiatives (Better Factories Cambodia, MFA Forum Bangladesh, FLA).
• Increased use of organic cotton.

Governance Achievements

• Updated Code of Ethics.
• Updated chemical restrictions.

Climate Goals & Targets

Environmental Challenges

• Increased carbon dioxide emissions (attributed partly to improved data collection).
• Challenges in ensuring full Code of Conduct compliance by suppliers (falsified documents, excessive overtime, lack of worker-management communication).
• Difficulties in addressing complex issues in the supply chain.
• Lack of awareness among workers regarding their rights.

Mitigation Strategies

• Implementation of FAP to address root causes of non-compliance.
• Participation in multi-stakeholder initiatives.
• Workshops and training programs for suppliers and workers.
• Focus on reducing energy consumption and transport emissions in the coming years.

Supply Chain Management

Supplier Audits: 2,670 audits in 2005 (including 170 FAP audits)

Responsible Procurement

• Code of Conduct
• Chemical restrictions
• Environmental requirements
• Safety requirements

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: GRI

Sustainable Products & Innovation

• Garments made with organic cotton

Environmental Metrics

ESG Focus Areas

• Working conditions in the supply chain
• Environmental impact (climate change, water)
• Product responsibility
• Employee relations
• Community engagement

Environmental Achievements

• Reduced CO2 emissions by 21% compared to 2006
• Reduced air freight emissions by 20%
• Increased use of renewable energy resulting in savings of 0.93 tonnes per SEKm turnover
• Recycled 84% of hangers purchased

Social Achievements

• Implemented an IT tool for monitoring Code of Conduct compliance
• Focused on supplier ownership to improve working conditions, with best results seen in Bangladesh
• Successfully sold collections made of organic cotton
• Donated 100,000 USD to UNICEF to help victims of the Bangladesh cyclone
• Donated £582,184 to WaterAid

Governance Achievements

• Implemented Code of Ethics training for all production office employees and suppliers
• Updated sustainability vision and policy

Climate Goals & Targets

Environmental Challenges

• Improving working conditions in the supply chain with lasting impact
• Reducing carbon footprint, including the supply chain
• Addressing the environmental and social impacts of raw materials
• Limited direct influence on conditions further back in the extended supply chain
• Overtime hours and compensation
• Chemical handling and waste disposal
• Maintaining high flexibility, speed and short lead production times in Turkey

Mitigation Strategies

• Long-term remediation efforts in the supply chain
• Supplier ownership approach
• Cooperation with stakeholders and organizations (UN Global Compact, Amnesty Business Group, Business for Social Responsibility, Fair Labor Association, Better Cotton Initiative, UNICEF)
• Pre-order product development planning
• Capacity building initiatives in Asia and Europe
• Improved IT tools for monitoring and analysis
• Environmental requirements for transport service providers
• Energy-saving initiatives in stores
• Code of Conduct training for suppliers and employees
• Chemical training projects
• Collaboration with NGOs (Sowkyam Foundation, Phulki, Advit, SEDF)

Supply Chain Management

Supplier Audits: 1983 Code of Conduct compliance visits in 2007 (948 FAP audits)

Responsible Procurement

• Code of Conduct based on UN Convention on the Rights of the Child and ILO Declaration on Fundamental Principles and Rights at Work
• Chemical Restrictions list
• Pre-order product development planning
• Supplier grading system

Climate-Related Risks & Opportunities

Opportunities

• Financial gains from reducing energy consumption
• Development of energy-efficient products

Reporting Standards

Frameworks Used: GRI G3 (Level C)

Sustainable Products & Innovation

• Organic cotton collection
• Flower eco-label babywear

Environmental Metrics

ESG Focus Areas

• Human Rights
• Environment
• Labor Practices
• Community Investment
• Supply Chain Management
• Product Responsibility
• Climate Change
• Water Stewardship

Environmental Achievements

• Increased use of organic cotton to 3,000 tonnes in 2008 from 1,300 tonnes in 2007.
• Reduced CO2 emissions from air transport by 16% on a like-for-like store basis and by 5% overall in 2008.
• Increased share of train transportation from Turkey to Germany, Austria and the Netherlands from 5% to 50% during 2008.
• 76% of hangers purchased were recycled in 2008.

Social Achievements

• Launched Fashion Against AIDS campaign, raising SEK 15 million (approximately $1.8 million) in donations.
• Opened 214 stores and acquired 20 stores of the brands Weekday and Monki.
• Opened first stores in Japan.
• Established a global discrimination and equality policy.
• Developed a global diversity policy.

Governance Achievements

• Developed a new sustainability strategy with a shared responsibility approach.
• Launched the third version of the Code of Ethics.
• Became an FLA accredited company.

Climate Goals & Targets

Environmental Challenges

• Influencing suppliers to improve environmental and social performance.
• Measuring CO2 emissions from the supply chain.
• Assessing water footprint.
• Tracking and tracing raw materials.
• Ensuring compliance with Code of Conduct in short production times.
• Monitoring home workers.
• Addressing overtime exceeding legal limits.

Mitigation Strategies

• Developed a Code of Conduct guidance manual.
• Implemented the Full Audit Programme (FAP).
• Collaborated with organizations like BCI, Organic Exchange, and UNICEF.
• Developed long-term partnerships with suppliers.
• Implemented capacity building programs.
• Increased unannounced audits.
• Improved communication with suppliers.

Supply Chain Management

Supplier Audits: 2,509 audits in 2008 (1,983 in 2007)

Responsible Procurement

• Code of Conduct
• Full Audit Programme (FAP)
• Supplier grading system
• Pre-order product development planning

Climate-Related Risks & Opportunities

Opportunities

• Energy savings
• Investing in new sustainable materials

Reporting Standards

Frameworks Used: GRI G3, Apparel and Footwear Sector Supplement

Third-party Assurance: No third-party assurance

Sustainable Products & Innovation

• Garments made from organic cotton, organic wool, recycled wool, and recycled polyester.

Awards & Recognition

• Global 100 most sustainable corporations
• Brands with a conscience

Environmental Metrics

ESG Focus Areas

• People
• Planet
• Profit

Environmental Achievements

• Reduced carbon footprint relative to sales by 32% compared to 2004.
• Used 8,500 tonnes of organic cotton, exceeding the target of 3,000 tonnes.
• Introduced 16 different garments made from recycled cotton.

Social Achievements

• Revised Code of Conduct to strengthen management systems and expand its reach.
• Launched All for Children project with UNICEF to combat child labor in India.
• Implemented global employee policies on discrimination and equality, and diversity.

Governance Achievements

• Revised Code of Ethics with a dedicated whistleblowing email address.
• Conducted training on the revised Code of Ethics for 1,175 employees and 618 managers.
• Signed the CEO Water Mandate.

Climate Goals & Targets

Environmental Challenges

• Supply chain disruptions due to the global economic downturn.
• Lack of transparency among some Chinese suppliers regarding salary and working time records.
• Difficulty in influencing second-tier suppliers (e.g., fabric mills) on environmental practices.

Mitigation Strategies

• Kept orders stable with Cambodian suppliers to support their sustainability efforts.
• Worked to build trust and transparency with Chinese suppliers.
• Implemented the Management System Scorecard to assess suppliers' management systems.
• Launched the Mill Development Programme to improve environmental performance of fabric mills.

Supply Chain Management

Supplier Audits: 2206 audits in 2009

Responsible Procurement

• Code of Conduct
• Full Audit Programme
• Supplier Development Programme
• Capacity-building initiatives

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: GRI

Sustainable Products & Innovation

• Garments made from recycled cotton
• Flower eco-labelled baby wear

Awards & Recognition

• PETA Proggy Award 2009 – Company of the Year

Environmental Metrics

ESG Focus Areas

• People
• Planet
• Profit

Environmental Achievements

• Increased use of organic cotton to more than 15,000 tonnes (77% increase from 2009)
• Launched the Garden Collection made from organic or recycled materials
• Achieved water savings of approximately 50 million liters in denim production
• Switched to recycled material for all standard plastic consumer bags
• 85% of hangers not reused in store were recycled

Social Achievements

• Launched a long-term incentive program for all employees
• More than 300,000 garment workers in Bangladesh educated on their rights through short films
• 50% of board members are women
• Donated 631,295 garments to charities
• Generated USD 6,500,000 through Fashion Against Aids collections

Governance Achievements

• Updated Code of Ethics
• Established a confidential whistle-blowing procedure
• Global Framework Agreement with UNI (Union Network International)

Climate Goals & Targets

Environmental Challenges

• Meeting high quality standards while keeping products affordable
• Improving conditions further down the value chain
• Tackling complex structural issues in the supply chain
• Ensuring all cotton used comes from sustainable sources by 2020
• Achieving carbon neutrality and zero waste
• Late changes to product designs leading to tight production lead times
• Water scarcity in some sourcing regions
• Excessive water use in cotton cultivation and garment manufacturing
• High levels of non-compliance with environmental and health and safety requirements among accessory and shoe suppliers in China
• Complex wage systems in China leading to lack of transparency
• Low minimum wages in Bangladesh
• Conflict between unions and employers in Cambodia
• Sumangali schemes in the Indian garment industry
• Devastating fire at a Bangladeshi supplier factory

Mitigation Strategies

• Continuous refinement of processes and methods
• Co-operation with suppliers through capacity building and training
• Engagement with industry bodies and governments
• Setting a target for all cotton to come from sustainable sources by 2020
• Offsetting emissions to meet climate targets
• Investing in renewable energy sources
• Implementing energy efficiency measures in stores and distribution centers
• Shifting to more environmentally conscious modes of transport
• Collaborating with transport providers to improve environmental performance
• Modular training approach for accessory and shoe suppliers in China
• Supporting suppliers in establishing transparent wage systems in China
• Joint letter to the Bangladeshi government requesting a minimum wage review
• Mediating industrial dialogue in Cambodia
• Dialogue with stakeholders to address sumangali schemes in India
• Global ban on sandblasting
• Voluntary support program for children affected by the fire in Bangladesh
• Fire safety improvement project in Bangladesh

Supply Chain Management

Supplier Audits: 1,938 audits on active factories in 2010

Responsible Procurement

• Code of Conduct
• Chemical Restrictions
• Environmental Guidelines for Packaging
• Guidelines for transport packaging
• Waste and Recycling Guide
• Environmental guidelines for interior department
• Requirements for suppliers of shop fittings

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Not disclosed

Opportunities

• Development of energy-efficient products

Reporting Standards

Frameworks Used: GRI, UN Global Compact

Certifications: ISO 14001

Third-party Assurance: Not disclosed

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Garden Collection
• Conscious Collection
• Waste Collection

Awards & Recognition

• Green Data Centre of the Year Award 2010

Environmental Metrics

ESG Focus Areas

• Climate Change
• Water Stewardship
• Chemical Management
• Supply Chain Management
• Fair Living Wage
• Human Rights
• Waste Reduction
• Community Development

Environmental Achievements

• Reduced electricity use per H&M (brand) store sqm by 14% since 2007.
• Reduced water use in denim production by 340 million liters.
• Recycled 92% of waste handled at warehouses.
• Used recycled polyester equivalent to 9.5 million PET bottles.
• 18% of electricity used came from renewables.

Social Achievements

• Launched Fair Living Wage Roadmap.
• Educated 894,975 workers in Bangladesh and India about their rights.
• Donated 3,555,687 garments to charitable causes.
• 50% of board members are women.
• Launched first closed-loop products made with 20% recycled material from collected garments.

Governance Achievements

• Signed Accord on Fire and Building Safety in Bangladesh.
• Updated Code of Conduct.
• Implemented new sustainability training program for all colleagues.
• 100% of commercial goods suppliers signed Code of Ethics and received training.

Climate Goals & Targets

Environmental Challenges

• Need for further innovation to make quality garments entirely out of recycled fabrics.
• Excessive overtime in many supplier factories.
• Systemic root causes in the industry and operating countries.
• Ensuring high social and environmental standards with all suppliers.
• Reducing climate impacts along the value chain (raw materials, fabric production, customer use).

Mitigation Strategies

• Launched garment collecting program.
• Developed Supplier Energy Efficiency Programme (SEEP).
• Working with Better Cotton Initiative (BCI), Textile Exchange, and UNICEF.
• Collaborating with organizations like Better Work, FLA, and Fair Wage Network.
• Integrating fabric and yarn mills into supplier audit system.
• Rewarding good sustainability performance with better business.
• Developing updated method for assessing suppliers’ sustainability performance.
• Expanding public supplier factory list.
• Implementing Fair Wage method in model factories.
• Engaging governments on wage issues.
• Strengthening industrial relations through collaboration with unions.

Supply Chain Management

Supplier Audits: 3,121 audits conducted in 2013.

Responsible Procurement

• Code of Conduct; reward good sustainability performance with better business; purchasing practices enabling suppliers to meet demands; long-term partnerships; regular audits; supplier management system analyses; training and support; joint investments.

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Not disclosed

Opportunities

• Reducing energy consumption; using renewable energy; improving energy efficiency in stores; engaging suppliers in energy efficiency programs; inspiring customers towards conscious garment care.

Reporting Standards

Frameworks Used: GRI G4 (Core)

Certifications: Null

Third-party Assurance: Ernst & Young AB

UN Sustainable Development Goals

• Not disclosed

Not disclosed

Sustainable Products & Innovation

• Conscious Collection; Conscious Exclusive collection; closed-loop products; products made with organic leather, organic silk, Better Cotton, recycled cotton, and recycled polyester.

Awards & Recognition

• Dow Jones Sustainability Index; FTSE4Good; Ethibel EXCELLENCE Investments Register; World’s Most Ethical Companies; Global 100 List; Interbrand Global Green Brands; CDP’s Global 500 Climate Performance Leadership Index.

Environmental Metrics

ESG Focus Areas

• Conscious products and materials
• Involve our customers and colleagues
• Animal welfare
• Supply chain management
• Fair living wages
• Industrial relations
• Anti-corruption
• Employer of choice
• Human rights
• Diversity & equality
• Responsible marketing
• Climate (Emissions from our own operations; Emissions along our value chain)
• Close the loop on textile fibres
• Waste
• Water stewardship
• Chemical management
• Community development

Environmental Achievements

• Reduced total CO2e emissions by 4% compared to 2013 (16% per million SEK in sales)
• Increased share of renewable electricity to 27% (aiming for 80% by 2015)
• Reduced electricity use in H&M stores by 12% per sqm compared to 2007 (aiming for 20% by 2020)
• Collected 7,684 tonnes of garments for reuse or recycling (more than double 2013)
• Used recycled polyester equivalent to almost 40 million PET bottles
• Launched Conscious Denim collection using 56% less water and 58% less energy than comparable denim

Social Achievements

• Launched global garment collecting initiative
• Improved pay structures at a Cambodian role model factory, reducing overtime by 43% and increasing worker satisfaction to 94%
• Expanded social dialogue project in Bangladesh to over 20% of supplier factories
• Partnered with the International Labour Organisation (ILO) to strengthen fair negotiations and working conditions
• Set a goal for all strategic supplier factories to have democratically elected workplace representation by 2018
• Donated over 4 million garments to charitable causes
• Increased the share of H&M stores with recycling systems for cardboard, plastic, and paper to 58%

Governance Achievements

• Updated Code of Conduct to reflect commitment to fair living wages
• Investigated 30 incidents of potential non-compliance with Code of Ethics, resulting in actions in 18 cases
• Ensured 100% of colleagues in regular contact with business partners signed the Code of Ethics and received training
• Maintained 100% compliance with discrimination and equality policies

Climate Goals & Targets

Environmental Challenges

• Industry dependence on natural resources
• Challenges in achieving fair living wages across the textile industry (including overtime, lack of collective bargaining, and government regulations)
• Supply chain transparency and ensuring compliance with ethical standards
• Water impacts throughout the value chain
• Climate change impacts
• Textile waste and the need for a closed loop system
• Corruption in production and sales markets
• Ensuring safe working conditions and respecting human rights in all operations
• Maintaining high employee satisfaction across all markets

Mitigation Strategies

• Developed Fair Living Wage Roadmap
• Published supplier list, including second-tier suppliers
• Implemented comprehensive audit programs
• Developed water stewardship strategy in collaboration with WWF
• Committed to using renewable electricity wherever feasible
• Launched garment collecting initiative
• Implemented anti-corruption training and procedures
• Developed human rights policy and training programs
• Implemented employee satisfaction surveys and tailored solutions

Supply Chain Management

Supplier Audits: 3,623 audits in 2014 (head audits and follow-up audits)

Responsible Procurement

• Code of Conduct
• Supplier sustainability requirements
• Rewarding good sustainability performance with better business
• Implementing improved pay structures

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: GRI G4 (Core)

Third-party Assurance: Ernst & Young AB

Sustainable Products & Innovation

• Conscious Exclusive collection
• Conscious Denim collection
• Products made with recycled materials

Awards & Recognition

• World’s biggest user of organic cotton
• Dow Jones Sustainability Index
• FTSE4Good
• World’s Most Ethical Companies
• Global 100 List
• Interbrand Global Green Brands
• CDP’s Global 500 Climate Performance Leadership Index
• Global Fairness Award
• Pontus Schultz prize
• United Nations Association of New York Humanitarian of the Year award

Environmental Metrics

ESG Focus Areas

• Circularity
• Climate
• Transparency
• Equality
• Fair Jobs

Environmental Achievements

• Reduced total CO₂e emissions by 56% compared to 2014
• Increased renewable energy share in own operations to 78% of total electricity use
• Collected over 22,000 tonnes of garments for reuse and recycling
• Made 1.3 million pieces with closed-loop material (300% increase from 2014)

Social Achievements

• Signed a global framework agreement with IndustriALL and IF Metall to promote sustainable industrial relations and collective bargaining
• Donated nearly 5 million garments to charitable causes
• Created more than 16,000 new jobs in 2015
• Improved pay structures for fair living wages implemented in 68 strategic supplier factories

Governance Achievements

• Published supplier list including second-tier suppliers
• Reported human rights work according to the UN Guiding Principles Reporting Framework
• Transformed Code of Conduct into a Sustainability Commitment

Climate Goals & Targets

Environmental Challenges

• Closing the loop by reusing textile fibers
• Suppliers paying fair living wages
• Increasing transparency for informed customer choices
• Systemic challenges such as long working hours and lack of functioning industrial relations
• Wages and workplace safety, particularly in Bangladesh and Cambodia
• Water impacts across the value chain
• Chemical management in leather production
• Reducing climate impacts along the value chain

Mitigation Strategies

• Developed a global fair living wage strategy involving suppliers, textile workers, and governments
• Invested in developing suppliers and building strong long-term relationships
• Published supplier list and added second-tier suppliers
• Implemented SIPP (Sustainable Impact Partnership Programme) to assess supplier sustainability performance
• Developed a Sustainability Commitment to replace the Code of Conduct
• Implemented the Fair Wage Method in selected factories
• Engaged with governments to promote stronger wage legislation
• Partnered with the ILO to promote sustainable supply chains
• Provided workers with access to skills development programmes
• Entered a global framework agreement with IndustriALL to promote industrial relations
• Expanded social dialogue projects in Bangladesh and China
• Implemented training against forced labour in Indian spinning mills
• Integrated second-tier supplier factories into sustainability assessments
• Developed an updated strategy for sustainable purchasing practices
• Followed up on inspections as per the Bangladesh Accord
• Developed a new method to assess supplier water impacts
• Reduced water use in denim treatment processes
• Extended water impact reductions in raw material and fabric production
• Installed water-efficient equipment in own operations
• Raised awareness on water issues
• Implemented water engagement plans for Yangtze and Brahmaputra river basins
• Helped lead the industry towards zero discharge of hazardous chemicals
• Developed a new method to ensure data disclosure for strategic suppliers
• Developed improved chemical management practices for suppliers
• Increased the number of collected garments
• Made 300% more garments out of recycled fabric
• Used recycled polyester equivalent to at least 60 million PET bottles
• Invested in closed-loop innovation
• Recycled at least 95% of waste handled in warehouses
• Increased the share of H&M stores that recycle waste

Supply Chain Management

Supplier Audits: 3,980 audits in 2015 (including 371 head audits and 1,976 follow-up audits)

Responsible Procurement

• Sustainability Commitment (replacing Code of Conduct)
• SIPP (Sustainable Impact Partnership Programme)
• Fair Wage Method
• Sustainable purchasing practices
• Integration of second-tier suppliers

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: GRI G4 (core), UN Guiding Principles Reporting Framework

Third-party Assurance: Ernst & Young AB

Sustainable Products & Innovation

• Conscious Exclusive Collection
• Products made with recycled materials
• Denim products with low environmental impact

Awards & Recognition

• World’s Most Ethical Companies
• Dow Jones Sustainability Europe Index
• Dow Jones Sustainability World Index
• FTSE4Good
• Global 100 Most Sustainable Corporations
• Green Power Leadership Awards
• Green Ranking
• PETA’s Libby Award

Environmental Metrics

ESG Focus Areas

• Circular and renewable fashion
• Fair and equal company

Environmental Achievements

• Reduced CO2 emissions by 47% compared to 2015
• 96% of electricity used in own operations comes from renewable sources
• Collected more than 15,888 tonnes of garments (29% increase from 2015)
• 26% of total materials were either recycled or sustainably sourced
• Second largest user of recycled polyester (equivalent to 180 million PET bottles)
• Second largest user of Tencel®Lyocell

Social Achievements

• Renewed the IndustriALL Global Framework Agreement
• 83% of business partners regard the H&M group as a fair business partner
• 90% of employees agreed that “People here are treated fairly regardless of age, ethnicity, sex, sexual orientation and disabilities.”
• Offered internships to refugees in specific markets
• Promoted equal opportunities for retail workers in India

Governance Achievements

• Implemented the H&M group Global Compensation and Benefit Policy
• Developed an enhanced and updated Global Health and Safety Policy
• Developed a Global Labour Relations Policy and training for the H&M group
• Gender split in Board of Directors is 50:50
• Investigated and closed 39 incidents of potential non-compliance with the Code of Ethics

Climate Goals & Targets

Environmental Challenges

• Supply chain disruptions due to water scarcity and chemical use
• Creating fashion without compromising on design, quality, price or sustainability
• Traceability challenges for conventional cotton
• Ensuring fair living wages across the supply chain
• Recycling blended fibres
• Developing technologies to capture carbon

Mitigation Strategies

• Collaborated with WWF on water stewardship
• Used LCA data when evaluating materials
• Collaborated with Cradle to Cradle Products Innovation Institute
• Initiated research project with Ellen MacArthur Foundation and Stockholm Resilience Centre
• Implemented the Fair Wage method
• Partnered with Worn Again for textile-to-textile recycling
• Invested in Sellpy to help scale sustainable retail concept
• Introduced the Responsible Wool Standard

Supply Chain Management

Supplier Audits: 1,194 minimum requirement assessments performed at first-tier suppliers, 459 desktop validations, 1,247 onsite validations

Responsible Procurement

• Sustainability Commitment
• SIPP
• Higg Index

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather events

Transition Risks

• Regulatory changes
• Market shifts

Opportunities

• Development of energy-efficient products
• Renewable energy investments

Reporting Standards

Frameworks Used: GRI Standards: Core Option, UN Guiding Principles Reporting Framework

Certifications: Null

Third-party Assurance: Ernst & Young AB

UN Sustainable Development Goals

• SDG 5
• SDG 6
• SDG 7
• SDG 8
• SDG 12
• SDG 13
• SDG 17

Alignment explained in detail in the report

Sustainable Products & Innovation

• Conscious Exclusive
• C/O Cheap Monday Capsule Collection
• Closed Loop 2016 collections
• Conscious Beauty line

Awards & Recognition

• World’s Most Ethical Companies
• Dow Jones Sustainability Indices
• FTSE4Good
• Green Power Leadership Awards
• Green Ranking
• PETA’s Libby Award
• Corporate Register Reporting Award
• Drapers Award
• RobecoSAM’s sustainability award
• Sustainable Brand Index

Environmental Metrics

ESG Focus Areas

• Climate Change
• Circular Economy
• Renewable Energy
• Fair Jobs
• Inclusion & Diversity
• Human Rights
• Water Stewardship

Environmental Achievements

• Reduced CO2 emissions from own operations by 11%
• Collected 20,649 tonnes of textiles for reuse and recycling (16% more than previous year)
• 57% of materials used were recycled or other sustainably sourced materials
• 95% of cotton used was recycled or other sustainably sourced
• 96% of electricity purchased was renewable

Social Achievements

• 655 factories and 930,000 garment workers covered by workplace dialogue and Wage Management Systems (84% of product volume)
• 93% of business partners rated H&M Group as a fair business partner
• Exceeded goals for Fair Living Wage Strategy, reaching 655 factories and over 930,000 workers
• Launched Afound, a brand reselling unsold products
• Implemented a new transparency tool enabling customers to trace products to the factory

Governance Achievements

• Board of Directors had a 60%:40% (female:male) gender split
• H&M Group ranked among top 5 in Fashion Revolution’s 2018 Transparency Index
• Developed a new Water Roadmap for the supply chain
• Developed a new circular packaging strategy and roadmap

Climate Goals & Targets

Environmental Challenges

• Lack of viable technology for recycling blended fibres at scale
• Microfibre shedding from synthetic fabrics
• Water scarcity and pollution in some production areas
• Industry-wide challenges in achieving fair living wages
• Lack of transparency and traceability in some supply chains

Mitigation Strategies

• Investing in and collaborating with companies developing recycling technologies (e.g., Worn Again, Re:newcell, Moral Fiber)
• Developing microfibre-reducing laundry bags and researching alternative materials
• Implementing a 5-step water stewardship strategy with WWF
• Working with ACT to achieve living wages through collective bargaining
• Increasing transparency through public supplier lists and online tools

Supply Chain Management

Supplier Audits: 884 desktop validations and 1,430 onsite validations in 2018

Responsible Procurement

• Sustainability Commitment
• Code of Ethics
• Minimum requirements verification

Climate-Related Risks & Opportunities

Physical Risks

• Not disclosed

Transition Risks

• Not disclosed

Opportunities

• Development of energy-efficient products and services

Reporting Standards

Frameworks Used: GRI Standards: Core Option, UN Guiding Principles Reporting Framework, UN Global Compact

Certifications: Null

Third-party Assurance: Ernst & Young AB (limited assurance for selected indicators)

UN Sustainable Development Goals

• SDG 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 12, 13, 14, 15, 16, 17

H&M Group's sustainability strategy aligns with multiple SDGs, addressing various social and environmental challenges.

Sustainable Products & Innovation

• Conscious Exclusive collection using recycled materials
• Afound brand for reselling unsold products
• Take Care concept for garment care and repair

Awards & Recognition

• Drapers Sustainability Award
• World’s Most Ethical Companies (Ethisphere Institute)

Environmental Metrics

ESG Focus Areas

• Climate Change
• Circularity
• Fair Jobs
• Inclusion & Diversity
• Human Rights

Environmental Achievements

• 97% of cotton was organic, recycled or other sustainably sourced.
• 100% of textile and leather supply chain enrolled in Zero Discharge of Hazardous Chemicals programme.
• -10.1% reduction in electricity intensity since 2017.
• 29,005 tonnes of garments collected.

Social Achievements

• 3,600 employees completed inclusion & diversity training.
• 1.1+ million supply chain workers reached by industrial relations and workplace dialogue programmes.
• ~900,000 supply chain workers benefited from improved Wage Management Systems.
• Overall employee engagement score 76/100.

Governance Achievements

• Risk assessment performed according to TCFD guidelines.
• Transparency strategy developed in dialogue with stakeholders.
• Ranked among top five brands in Fashion Revolution’s Fashion Transparency Index.

Climate Goals & Targets

Environmental Challenges

• Increased net emissions due to increased natural gas and district heating use.
• Scaling innovations to commercial levels.
• Development of an industry standard Higg Index on product transparency has been delayed.
• Achieving 100% MRSL compliance.

Mitigation Strategies

• Improving electricity efficiency in stores.
• Focusing on solutions that are sustainable and solve customer problems.
• Mobilising other brands to get the transparency discussion back on the SAC agenda.
• Sharing the 100% MRSL compliance goal widely within the organization.

Supply Chain Management

Supplier Audits: 2,188 minimum requirements verifications

Responsible Procurement

• Sustainability Commitment
• Code of Ethics
• Sustainable Impact Partnership Programme (SIPP)

Climate-Related Risks & Opportunities

Reporting Standards

Frameworks Used: GRI Standards: Core Option, UN Guiding Principles Reporting Framework, TCFD, UN Global Compact, CEO Water Mandate

Third-party Assurance: Ernst & Young AB

Sustainable Products & Innovation

• Products made from pineapple leaf, algae, and citrus peel
• Recycled materials in various product lines

Awards & Recognition

• CDP’s 2019 A List
• Dow Jones Sustainability Index (Gold Status)
• Corporate Knights Global 100 Index (27th)

Environmental Metrics

ESG Focus Areas

• Climate change
• Circular economy
• Biodiversity
• Human rights
• Fair jobs
• Inclusion and diversity

Environmental Achievements

• Reduced packaging by 14%, including a 24% reduction in plastic packaging.
• 100% of cotton sourced is organic, recycled, or sourced in a more sustainable way.
• 64.5% of materials are from recycled or more sustainable sources.
• Reached 85% of facilities in own operations with water-efficient equipment.

Social Achievements

• Launched new business models such as COS Resell and Arket Rental, expanding circular customer offerings.
• Supported suppliers during the pandemic, honoring responsible purchasing practices.
• Overall employee engagement score of 75 out of 100.
• 84% of employees agreed with the statement “I feel comfortable being myself at work”.

Governance Achievements

• Finalized revised Human Rights Policy.
• Disclosed US employee demographics for H&M brand, COS, and & Other Stories.
• Launched a sustainability-linked bond.

Climate Goals & Targets

Environmental Challenges

• COVID-19 pandemic impacting net sales, sustainability activities, store openings, and supply chain.
• Data limitations and exclusions in reporting.
• Securing adequate volumes of recyclable, post-consumer textiles.
• Establishing effective data systems to track and communicate sustainability performance.

Mitigation Strategies

• Accelerated sustainability work on many fronts, including setting new goals and developing circular business models.
• Adapted processes to suit changing restrictions and safeguard employee wellbeing.
• Switched from onsite data verification to digital assessments where needed.
• Developed a Climate Positive Roadmap to forecast carbon reductions.

Supply Chain Management

Supplier Audits: 1,795 minimum requirement verifications

Responsible Procurement

• Sustainability Commitment
• Code of Ethics
• Supplier Sustainability Index

Climate-Related Risks & Opportunities

Physical Risks

• Floods, droughts

Transition Risks

• Regulatory changes, market shifts

Opportunities

• Development of energy-efficient products

Reporting Standards

Frameworks Used: GRI Standards: Core Option, TCFD, UN Guiding Principles Reporting Framework, UN Global Compact

Certifications: Null

Third-party Assurance: Ernst & Young AB

UN Sustainable Development Goals

• Goal 1 (No Poverty)
• Goal 5 (Gender Equality)
• Goal 6 (Clean Water and Sanitation)
• Goal 12 (Responsible Consumption and Production)
• Goal 13 (Climate Action)
• Goal 8 (Decent Work and Economic Growth)

Initiatives contribute to these goals through various strategies and partnerships.

Sustainable Products & Innovation

• Products made from recycled materials, including Circulose® and InfinnaTM.
• Made-to-measure jeans
• Garments made from biodegradable fabric

Awards & Recognition

• Ranked no.1 in Fashion Revolution’s 2020 Fashion Transparency Index
• CDP A List for climate
• Included in Dow Jones World Sustainability Index

Environmental Metrics

ESG Focus Areas

• Climate change
• Circular economy
• Human rights
• Fair jobs
• Inclusion and diversity
• Anti-corruption

Environmental Achievements

• Reduced scope 1 and 2 carbon emissions by 22 percent compared with 2019 baseline
• Reduced scope 3 emissions by 9 percent in absolute figures compared with 2019 baseline
• Increased share of recycled materials used in garments from 5.8 percent to 17.9 percent
• 95 percent of electricity sourced for own operations was renewable

Social Achievements

• Launched Singular Society and Creator Studio initiatives
• Ranked second in the Fashion Transparency Index 2021
• H&M Group announced as UN Global Compact LEAD
• Joined the 2025 Recycled Polyester Challenge
• Included in the Dow Jones Sustainability World Index for the tenth year running
• Expanded Sellpy to several new markets
• Signed a new agreement “International Accord for Health and Safety in the Textile and Garment Industry”

Governance Achievements

• Integrated annual and sustainability reports for the first time
• Issued EUR 500 million sustainability-linked bond

Climate Goals & Targets

Environmental Challenges

• Supply chain disruptions due to the pandemic and geopolitical challenges
• Climate change impacts on raw material availability and production
• Reputational risks
• Increased competition in the fashion industry
• Risks related to information technology and cybersecurity
• Currency fluctuations
• Complex tax risks
• Corruption risks in sourcing markets

Mitigation Strategies

• Investments in tech, AI, advanced analytics and logistics
• Ambitious sustainability strategy with targets for emissions reduction, recycled materials, and renewable energy
• Strong risk management and internal control processes
• Currency hedging strategies
• Compliance with national and international tax legislation
• Code of Ethics and anti-corruption program
• Supplier audits and responsible procurement practices
• Contingency plans for extreme weather events and supply chain disruptions

Supply Chain Management

Supplier Audits: 100% of tier 1 and 2 suppliers have implemented SIPP, FEM, and FSLM

Responsible Procurement

• Sustainability Commitment and Code of Ethics
• Sustainable Impact Partnership Programme (SIPP)

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather events
• Water scarcity

Transition Risks

• Changes in customer attitudes
• Climate-related legislation
• Carbon taxes

Opportunities

• Developing more sustainable materials
• Building a more sustainable business
• Developing new circular business models
• Decarbonisation of garment production
• Creating new business-to-business revenue streams

Reporting Standards

Frameworks Used: GRI, UN Guiding Principles Reporting Framework, TCFD

Third-party Assurance: Limited assurance by Deloitte AB

Sustainable Products & Innovation

• Products made from recycled and more sustainably sourced materials

Awards & Recognition

• Design Grand Prix for Looop machine

Environmental Metrics

ESG Focus Areas

• Climate change
• Human rights
• Environmental sustainability
• Circular economy
• Supply chain responsibility
• Diversity & Inclusion

Environmental Achievements

• Spent approximately SEK 2.1 billion on recycled and sustainably sourced materials and decarbonisation in 2023.
• Set targets to reduce GHG emissions throughout its value chain.
• Aims to become a more circular business by sourcing recycled or sustainably sourced raw materials and scaling up customer-facing circular business models.
• Set science-based targets approved by the SBTi to reduce absolute GHG emissions by 56% by 2030 (baseline 2019) and 90% by 2040 (net-zero).

Social Achievements

• Has a strong focus on innovation related to new materials and recycling technologies.
• Works to improve the resilience of H&M Group’s business and supply chain by reducing dependence on limited natural resources.
• Supports grievances to be handled and addressed as close to the issue as possible.
• Established Speak Up channel for reporting suspected misconduct across the company’s value chain.

Governance Achievements

• Conforms to the Swedish Corporate Governance Code.
• Has a robust internal control framework based on the COSO framework.
• Regularly reviews risks on a quarterly basis.
• Board monitors implementation of sustainability strategies and initiates changes as needed.

Climate Goals & Targets

Environmental Challenges

• Climate change impacts on weather patterns affecting sales.
• Climate change impacts on production and distribution in certain regions.
• Depletion of natural resources, biodiversity loss, land use change and water impacts.
• Geopolitical uncertainty, increased regulatory demands, inflation, and high energy costs in Europe.
• Increased competition impacting industry profitability.
• Balancing fashion basics and trends to optimize resource consumption.
• Fluctuations in raw material prices, transport costs, and supplier capacity.
• Social tensions in sourcing markets.
• Risks related to information technology, including hacking attempts and system disruptions.
• Corruption risks in various markets.

Mitigation Strategies

• Climate goals and strategies to reduce GHG emissions and build a more circular business.
• Contingency plans for suppliers in high-risk regions.
• Water strategy supporting water-efficient technologies and innovative dyeing processes.
• Investments in energy efficiency and renewable energy.
• Focus on innovation in materials and recycling technologies.
• Increased accuracy in purchasing decisions and volume planning.
• Investments in regional and local customer offerings.
• Ongoing investments in information security and cybersecurity.
• Annual risk assessments and reviews to address corruption risks.
• Internal control framework and regular risk reviews.

Supply Chain Management

Responsible Procurement

• Code of Ethics signed by all employees interacting with suppliers.
• Sustainability requirements for suppliers.
• Financial support to assist suppliers in phasing out fossil fuels.
• Development of energy transition roadmaps for critical regions and suppliers.

Climate-Related Risks & Opportunities

Physical Risks

• Extreme weather events disrupting production and distribution.
• Water scarcity impacting production.

Transition Risks

• Changes in customer attitudes and purchasing patterns.
• Transition to lower-carbon footprint production.
• Introduction of global or regional carbon taxes.
• Increased energy and water costs.

Opportunities

• Building a more sustainable business and attracting more customers.
• Developing customer-facing circular business models.
• Decarbonisation of garment production.
• Creation of new business-to-business revenue streams.
• Reducing dependence on virgin materials.

Reporting Standards

Frameworks Used: Swedish Corporate Governance Code, GRI, UN Guiding Principles Reporting Framework, TCFD, OECD Guidelines

Certifications: ISO 9001:2015 (for international tax and transfer pricing quality management system)

Sustainable Products & Innovation

• Products made with recycled and sustainably sourced materials.