Today H&M announced a new fashion line within its Conscious Collection at a press conference covering the company’s most recent financial and sustainability results. CEO Karl-Johan Persson and Head of Investor Relations Nils Vinge admitted that the company’s financial performance over the past quarter was rocky, with a 10 percent decrease in net profits, but they were bullish on the world’s second largest retailer’s long term growth prospects and sustainability plan.
In recent years, the Swedish fast fashion giant has integrated a long term sustainability agenda within its overall strategy. In addition to 42 stores opening this quarter, entrance into five new markets and the launch of a new high-end clothing chain (& Other Stories), H&M continues to adopt and expand more sustainable and transparent business practices. Critics used to sneer at H&M for its low-quality “disposable clothing,” but a shift is underway.
So what are the changes underway at H&M, and can a fashion retailer couple growth with a heightened environmental and social conscience?
“Sustainability is high on our daily agenda and has been an integral part of our business for some time.” – H&M CEO CEO Karl-Johan Persson during today’s telephone conference.
For the second year in a row, H&M is the world’s largest user of organic cotton. Currently 11.4 percent of the cotton in H&M’s clothes are from more sustainable sources: 7.8 percent is organic cotton and the rest is sourced from growers participating in the Better Cotton Initiative. By 2020, H&M wants to source 100 percent of its cotton from more responsible sources–a tall order.
Closing the loop on textile recycling
H&M takes the prize for being the first retailer to have a global recycling program in all of the markets in which the company does business. Customers can hand in clothes from any brand or maker they no longer want and in turn receive a small reward. As Persson noted during today’s conference call, however, only select stores are participating in this program, though H&M plans on including more stores this year.
Water stewardship in partnership with WWF
In 2012 alone, H&M conserved an estimated 119 million gallons (450 million liters) of water by the use of more efficient techniques during the manufacture of denim and other textiles. As a result of adopting the WWF’s Water Risk Filter Tool, almost three-fourths of H&M’s suppliers have improved their water efficiency to less than 100 liters per kilogram of clothing–when the norm used to be over 200 liters/kg.
Ethical supply chain
In the wake of the tragic garment factory fires in Bangladesh and Pakistan, H&M continues to ramp up supplier audits and worker training. The company has published its supplier list, conducted over 2,500 ethical audits last year and has trained over 570,000 workers in Bangladesh about their rights.
Solvent-based adhesives have long caused health problems within the factories churning out handbags and shoes. Since 2009 H&M has worked with suppliers to find water-based alternatives in order to reduce the content of volatile organic compounds (VOCs) in the company’s products. In 2010, H&M manufactured 450,000 pairs of shoes with water-based adhesives; last year the company produced 7.4 million pairs, exceeding its 2012 goal of 7 million.
Meanwhile H&M will release a new line within its Conscious Collection on April 4. The men’s and women’s collection melds the old Hollywood vibe with sustainability: organic cotton, recycled polyester and biodegradable Tencel fabric will be available in 140 stores worldwide.
The challenges H&M faces this decade are massive. The prices of energy and commodities will continue to surge and the importance of closing the loop on textiles will grow. Workers in factories across the globe will demand more benefits and wages and social media can turn anyone into a human rights monitor.
Balancing affordable clothes with more sustainable business practices not only requires a massive overhaul of a company’s supply chain, but a huge shift in consumer behavior. And judging by the customers I’ve seen shop at H&M over the years–the point after all is to grab several items quickly for that event or party tonight with little thought to the life of the garments tomorrow–the company has set ambitious and lofty goals for the next several years. While H&M’s focus on sustainability is admirable, we need to view the company’s change with healthy skepticism and watch whether its customers’ mindset matches that of the company’s executives and employees.
Based in Fresno, California, Leon Kaye is the editor of GreenGoPost.com and frequently writes about business sustainability strategy. Leon also contributes to Guardian Sustainable Business; his work has also appeared on Sustainable Brands, Inhabitat and Earth911. He will speak at San Francisco State University on climate change, the media and business on Wednesday, April 3. You can follow Leon and ask him questions on Twitter or Instagram (greengopost).
[Image Credit: Leon Kaye]