Sustainability Impact Partnership Programme

The Sustainability Impact Partnership Programme (SIPP) is H&M Group’s framework for assessing supplier performance against the relevant standards. It helps us assess whether suppliers meet the minimum requirements under these standards needed to start or continue a business relationship and follow up on performance over time. The information gathered through SIPP helps identify where support, corrective actions or capacity building may be needed.

We expect business partners to take ownership of their work on environmental and social topics within their operations and, where relevant, across their own supply chain.

Minimum requirements and follow-up assessments

Before starting a business relationship with a supplier, we assess whether the supplier meets the relevant minimum requirements needed to start working with H&M Group. We then conduct follow-up assessments at a defined cadence to check whether these requirements continue to be met.

Use of industry assessment tools

To assess supplier performance in a more consistent way, we use industry tools that are designed to reduce duplicate assessments and support more consistent data collection across the supply chain.

As part of SIPP, we use the Higg Facility Tools, developed by Cascale, a global non-profit alliance for the consumer goods industry. The tools help brands, retailers and manufacturers assess environmental and social management systems at factory level and support a more consistent way of collecting and using supplier performance data.

We use the Higg Facility Environmental Module (Higg FEM) for environmental management and the Higg Facility Social & Labor Module (Higg FSLM) for social and labour-related conditions. The Higg FSLM is based on the Social & Labor Convergence Program (SLCP) framework, which supports more consistent social and labour data collection and can help reduce duplicate assessments.

Suppliers in the relevant reporting scope complete assessments using these tools, with third-party verification where required. The results are used in SIPP to identify risks, strengths and improvement areas, and to support follow-up actions where needed.

The Higg Facility Tools are also used as a source of supplier performance data for reporting. Higg FEM provides environmental data, including information that may be used in climate-related calculations and supplier environmental follow-up. Higg FSLM provides social and labour data and is used as a source for selected supply chain management indicators in our annual sustainability reporting, where relevant.

Better Work

Better Work is a programme run by the International Labour Organization (ILO), a United Nations agency that sets international labour standards, and the International Finance Corporation (IFC), part of the World Bank Group. It brings together governments, employers, workers and brands to help improve working conditions in the garment industry.

In countries where Better Work operates, its assessments may be used alongside SIPP and other follow-up processes to support our monitoring of social and labour conditions in supplier factories. Supplier factories may take part in Better Work according to the agreed rollout schedule for that country.

Better Work assessments are based on national labour law and international labour standards. National labour law sets the legal requirements in a specific country, while ILO conventions set international labour standards that countries may use as a reference or commit to through ratification.

Some factories may be monitored through Better Work instead of the standard Higg FSLM route where the programme is available and relevant.

Most manufacturing factories we work with are covered by Higg Facility Tools or, where available, Better Work. For factories that are not covered by either of these tools, we take a risk-based approach to monitoring whether our business partners meet the relevant minimum requirements under our standards.

We apply different levels and methods of evaluation depending on country risk and the nature of the goods and services provided. Factories not covered by the Higg Facility Tools or Better Work are covered by annual minimum requirement assessments, performed either by our internal team or by a nominated third party.

The information gathered through SIPP helps us identify where suppliers may need support. Depending on the risks and improvement areas identified, support may include capacity-building workshops, training, management system analysis and corrective or preventive action planning.

Our follow-up considers environmental and social management performance alongside quality and other business indicators. We encourage our suppliers to develop their own strategies and solutions to challenges.

More broadly, H&M Group has due diligence processes that include risk identification, supplier support, supplier onboarding, guidance on human rights topics, and support on corrective and preventive action plans. These processes are intended to support work to identify, prevent, mitigate and, where needed, support remediation of unwanted human rights and environmental impacts.

SIPP is designed to support regular dialogue with suppliers about expectations, assessment findings and follow-up actions, with the aim of identifying risks and improvement areas over time. Where serious issues are identified, follow-up may include corrective or preventive action plans. In cases of severe non-compliance, or where remedial actions are not addressed, the business relationship may be ended.