Responsible purchasing practices

At H&M Group we are committed to having responsible purchasing practices that ensure we are a fair business partner. It is all about how we do business with our suppliers. Our purchasing practices should support the textile and garment industry to develop in a sustainable way, and giving long-term benefits to garment workers and suppliers.

H&M Group – A fashion buyer

The majority of the fashion brands are not fashion manufacturers, they are fashion buyers. This is fundamental to understand the role of purchasing practices. The same goes for H&M Group, we have never owned any factories, but always outsourced production as part of the original business idea created in 1947. It means that we are customers to locally owned or multi-national garment manufacturers, based mainly in Asia and Europe. By buying from these manufacturers, we support local business and economic development by transferring knowledge and through investments. The factories are not owned or managed by us, but by independent businessmen and women employing from hundreds up to tens of thousands of women and men, producing garments or other products found in our stores. 
 

Why are responsible purchasing practices important?

Responsible purchasing practices are fundamental in safeguarding the fair treatment of garment workers and to provide a healthy work environment. It is difficult for suppliers to be good employers if the buyers are not committed to responsible purchasing practices. Some key questions to ensure that you are a responsible buyer include: When will the supplier be paid for the goods produced? What will that price be, and what parameters will you negotiate that price on? What are the cancellation grounds and how are they regulated in contracts? 

As an example; the fashion industry is generally seasonally dependent. Customers will buy seasonal products when they need them. For example, swimwear is expected to be found in our stores during spring and knitted wear in the winter. This in turn creates a buying and production pattern, where there are certain periods of high peaks in production, and other periods with less production. Good purchasing practices and supplier relationships will help to address challenges related to uneven production based on customer demand. We can, for example, ensure that we, together with the supplier, plan the capacity well in advance, to reduce excessive overtime for factory workers in peak seasons, and to plan for periods with less customer demand.

Buyers have an important responsibility to create an enabling environment for human rights to be properly respected and implemented in practice, for example by enabling timely payment of products ordered so that suppliers in turn can pay wages to all workers on time. Without adequate planning and responsible purchasing practices, the risk of overtime, late wage payments, and health and safety violations, increases significantly. It also helps us to positively influence the same indicators allowing for a healthy work environment and good conditions in the factories.

Signing The ACT commitment on purchasing practices

We are a founding member of the collaboration ACT – Action, Collaboration and Transformation – together with other brands, and the global union IndustriALL. The ACT collaboration, created in 2014, has five commitments we need to adhere to, in order to be classified as a responsible buyer. We have signed up to them all.

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