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Here’s How H&M’s Sustainability Report Stacks Up

Swedish retailer H&M continues to dispel the theory that fast fashion is throwaway fashion with today’s release of the “Conscious Actions Sustainability Report 2014,” which underlines the company’s commitment to going green.

The 13th annual report is an informative one, boasting not only the chain’s sustainability successes from the past year, but also its ambition to use only renewable electricity and up the number of products made from recycled materials.

“It’s about the best value, not the cheapest price,” said CEO Karl-John Persson. “And while we must be realistic about the fact that most customers are not prepared to pay more for added sustainability value, I am convinced that it will become an important differentiator in the future.”

According to the Textile Exchange’s latest “Organic Cotton Market Report 2013,” H&M is still the world’s No. 1 user of organic cotton. In addition, 7,684 tons of used garments have been collected for reuse or recycling since its in-store program kicked off in 2013—that’s as much fabric as what’s in more than 38 million T-shirts—and in 2014, the retailer released its first closed-loop products made with 20 percent recycled cotton. The goal is to collect 100,000 tons of used garments by 2020.

“Creating a closed loop will mean immediate access to environmentally conscious raw materials for new garments,” Persson said, pointing out that H&M hopes to work toward more efficient use of raw materials through active involvement with the Better Cotton Initiative (BCI), Textile Exchange and UNICEF.

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Meanwhile, the equivalent of almost 40 million PET bottles was used to make recycled polyester, 24.6% of the retailer’s shoes are now made with mainly water-based glues and it pledges to use only certified down from this year onward, as well as only 100 percent certified wool from 2017.

Last year, H&M launched its first Conscious Denim collection, which on average used 56 percent less water and 58 percent less energy than comparable denim. Furthermore, over a third of all its denim products reached the highest “green level” in Jeanologia’s Environmental Impact Measuring (EMI) tool.

Elsewhere in the report, the retailer reveals it’s taken another step toward achieving supply chain transparency by expanding its public supplier factory list to include second-tier fabric and yarn suppliers involved in making about 35 percent of its products.

“We keep working hard to further increase the transparency across our entire value chain, down to the raw materials,” Persson said.

With stores and suppliers in more than 60 countries around the world, the report acknowledges that poverty is rampant in the places where it has factories, like Bangladesh, and says wages, overtime and workplace safety are key issues. Therefore, the company has started to test the Fair Wage Method, developed by the independent Fair Wage Network, in three factories and pledges to roll it out to all of its strategic suppliers by 2018. According to Persson, initial results indicate overtime has been reduced by more than 40 percent, wages have increased and pay structures have improved.

As he noted, “Garment production can be a development escalator that shows communities the way out of poverty. It’s creating a lot of jobs, particularly for women. It’s often their first paid job, so it’s very often a great driver for independence and liberation.”

With regard to improving workplace safety, H&M is working with Solidaridad and the National Resources Defense Council (NRDC) to integrate fabric and yarn mills that are making about 20 percent of its products into its supplier audit system and hopes to increase that to 50 percent this year.

Beyond monitoring factory compliance, the retailer has collaborated with the International Labor Organization (ILO) and the Fair Labor Assocation (FLA) to promote industrial relations and social dialog between its suppliers and their workers.

“We need to make sure that our growth helps the millions of people along our entire value chain to better lives and further improves their working conditions,” Persson said. “Just as creating transparency so that we can know exactly where each part of our products come from, [we want] our customers to be able to make truly informed choices.”