We are committed to transparent reporting on the progress we make towards achieving our sustainability strategy.
How we report
Reporting Scope 2021
H&M Group produces an annual sustainability performance report (Sustainability Disclosure) that covers sustainability strategies, challenges, activities, goals and performance for the global group operations of H & M Hennes & Mauritz AB (also referred to as the H&M Group). The report includes eight H & M Group brands (& Other Stories, Afound, ARKET, COS, H&M, H&M Home, Monki, Weekday), as well as subsidiaries, wholly or partially-owned during our financial year from 1 December 2020 to 30 November 2021, unless stated otherwise. See our Annual and Sustainability Report 2021 for a full list of entities.
Wherever possible, we report how we are addressing our key positive and negative impacts across our value chain. Our sustainability teams collect data from functions within H&M Group and from external parties such as suppliers and implementation partners. We include data only from business partners and supplier factories active and approved for production during the reporting period, unless stated otherwise. We include the following factories in our scope:
- Manufacturing and processing (i.e. washing or dyeing) factories owned or subcontracted by our suppliers.
- Where stated, a select number of our suppliers’ own suppliers (i.e. fabric mills, fibre processors, spinners or tanneries) and suppliers for non-commercial goods (such as store interior suppliers). Of these, most are fabric and yarn suppliers that account for about 60% of our products.
We state when information is limited in scope to our operations, across our value chain or for specific brands. Unless otherwise stated, we do not cover franchise operations.
Top executive management review our reports and external assurance is performed for selected indicators (clearly marked where applicable). Data is reviewed by our internal controlling team, and by internal sustainability experts following a two-tier quality control principle. We clearly indicate any extrapolations or estimations, as well as any changes in data methodologies or scopes that may influence data comparability between years. We base our data on the best possible systems currently available to us and, where applicable, align it with recognised standards.
Improving our emissions data
In 2021, we continued work to improve the accuracy of our emissions data. This has led to some changes to our reported emissions for previous years. We will continue to be transparent about how we calculate our emissions, learning and adapting our approach as methods improve.
Our scope 1 and 2 emissions data
We have updated figures for 2018-2020 according to our improved data collection and calculation process. Scope 1 and 2 emissions data for 2020 and earlier did not include district heating (scope 2) and natural gas (scope 1) for stores in Germany. We have therefore restated scope 1 and 2 figures this year to include these additional emissions. For the years 2020 and earlier, the additional data for stores in Germany cover the calendar year January to December rather than the financial year. For 2021, all emissions, including the additional data from Germany, cover the reporting period September 2020 to August 2021.
Our scope 3 emissions data
Prior to 2021, we used an assumption-based model based on selected materials and using historic emissions factors for calculations. We are moving to a model that:
- Incorporates live, real data wherever possible. Where we cannot connect production directly to a supplier, we use estimated data based on relevant share of materials. As we onboard more suppliers to our data systems, we will increase the share of real data and the accuracy of our system.
- Includes a wider scope of materials. We are moving from considering cotton, polyester and viscose to including the full mix of materials used in our products. This will enable us to track changes to emissions caused by shifting to more sustainable materials.
- Includes more detail on specific production processes. Our previous calculations combined yarn production and fabric production. The new model examines each process separately and in more detail, enabling us to pinpoint which production processes are responsible for the most emissions and, therefore, provide greatest potential for reductions.
- Uses updated emissions factors. Where we do not have direct real data from a supplier and therefore still need to make assumptions, we use emissions factors from the Higg Materials Sustainability Index (MSI) for our calculations. These are updated twice a year, giving us the most up to date factors for available materials.
We’ll continue to be transparent on how we calculate our emissions, learning and adapting our approach as methods improve.
- Global Reporting Initative (GRI). We prepare our sustainability report in accordance with the GRI Standards: Core Option. Download our detailed 2021 GRI Index.
- UN Guiding Principles Reporting Framework. We were one of the first companies to report on human rights in line with the UN Guiding Principles Reporting Framework. Read more about our approach. Our regular review of salient human rights issues complements our materiality assessment.
- Task Force on Climate-Related Financial Disclosures (TCFD). Our risk assessment follows the Task Force on Climate-Related Financial Disclosures (TCFD) recommendations. Please see our TCFD Risk assessment on pages 72-74 in our Annual and Sustainability report.
- UN Global Compact and CEO Water Mandate. We are signatories to the UN Global Compact. Our annual sustainability report serves as our Communication on Progress (COP) for the UN Global Compact and the CEO Water Mandate.
Process for identifying the most material topics and their boundaries
- Identification: Mapping aspects and creating a gross list
We conduct an annual review of our gross list of aspects. This is based on an analysis of external standards, such as the GRI Standard topic list, legislation, investor and NGO questionnaires, peer reviews, business intelligence, lifecycle assessment results, stakeholder dialogues and stakeholder reports and media coverage. The gross list has been checked against GRI’s Sustainability Context and Stakeholder Inclusiveness tests, most recently in 2021.
- Prioritisation: Scoring and prioritising topics
We prioritise the most material topics from this gross list by scoring different aspects on their frequency (how often they are raised by stakeholders) and their significance for economic, environmental and social impacts. We then break these categories down further. For frequency, we look at frequency raised by key defined sustainability stakeholders and experts (weighted x3), frequency featured in media (weighted x1) and frequency raised in key sustainability benchmarks, rankings and indices (weighted x1). For impact, we look at social and environmental impacts (weighted x1) and importance to business strategy (weighted x2). At least two internal experts per category gave scores, which were based on lifecycle assessment (LCA) data and existing strategy documents. We also chose at least one representative from each of our key stakeholder groups (which includes customers, colleagues, communities, suppliers and their employees, industry peers, NGOs, IGOs, policymakers and investors). During 2021, we have conducted stakeholder reviews based on the stakeholder survey.
- Regular review of our materiality matrix with key stakeholders
We review our materiality matrix on an annual basis. This means either conducting a full materiality analysis (as conducted in 2016 and 2019) as described in points 1 and 2 or a review of previous year’s matrix considering feedback received.
Read our independently verified assurance statement in the annual Sustainability Disclosure 2021 to find out more about how we define our report content and a list of material topics.