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 make our impact more positive, by choosing sustainable or recyclable materials and reducing what ends up on the cutting room floor. Our current testing of circular design principles covers less than 1% of our total assortment but are steps towards formalizing our framework for circular design.

Processing raw materials such as cotton 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 traceability challenges as we do not always have full insight on where all cotton is grown. Our choices matter, by 2030 we will only use recycled or other sustainably sourced raw materials.

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 WWF and the Swedish Textile Water Initiative (STWI) to help mills save water and energy. We are integrating all identified fabric and yarn mills into our supplier assessment system.

Over 1.6 million people work in the factories of our business partners, 62% 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. In 2017 the total water consumption of the factories and their processing facilities amounted to 295 billion litres (including production for other brands than the H&M Group’s). We work together with our suppliers towards the goal of reducing 25% of our water consumption per unit produced by 2022.

Transport represents approximately 3% of the carbon emissions in our garments’ lifecycle. We reduce this impact even further by choosing shipping for long distances and place orders closer to sales markets. As an important customer of the transport companies we work with, we have the opportunity to influence and collaborate on solutions such as electrical trucks for last mile delivery in China and delivery to customers by bike in the Netherlands.

We have stores in more than 70 markets in across the globe. 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 13% of the carbon 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
9%
Water impact
87%
Social impact
High
Our influence
Medium
Climate impact
46%
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
18%
Water impact
1%
Social impact
High
Our influence
Medium
Climate impact
2%
Water impact
0%
Social impact
Low
Our influence
High
Climate impact
0%
Water impact
0%
Social impact
High
Our influence
Low
Climate impact
21%
Water impact
8%
Social impact
Medium

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