The H&M Group is a design and fashion company. Our widespread supply chain reaches beyond our direct control because we work with suppliers who produce our designs. It’s therefore essential we and our suppliers have the same ambitions and mindset to ensure compliance with our standards, drive performance and achieve impact.
Through our Sustainable Impact Partnership Programme (SIPP) we support our business partners in raising their environmental and social performance. We reward high-achieving and responsible suppliers with training opportunities and long-term contracts. We want each supplier to take ownership of their sustainability agenda in order to drive environmental and social progress through their business and across our whole industry.
Suppliers working with an H&M Group brand must sign our Sustainability Commitment. This summarises the areas we are working on to make our supply chain more sustainable. The three focus areas are healthy workplaces, healthy ecosystems and animal welfare.
We use SIPP to assess levels of compliance with the Sustainability Commitment and to measure our suppliers’ performance over time. The main components of SIPP are: minimum requirements verification, self-assessment, validation and capacity building.
Before starting any relationship with a supplier, we conduct an “minimum requirement assessment”. All suppliers must pass the assessment before we place an order with them. We then conduct regular follow up assessments to ensure our minimum requirements continue to be met.
Self-assessment is an important component of SIPP. This involves suppliers reporting annual performance data and management system indicators, which helps us understand their readiness and resilience. The management system indicators generate a score which is used in our supplier evaluation score card, where sustainability carries the same weight as other parameters.
We believe in industry-wide collaboration tools that avoid duplication and promote transparency. This is why we use the Sustainable Apparel Coalition’s (SAC) Higg Facility Modules as the basis of our performance and management system assessment component of SIPP.
We were one of the first brands to incorporate the modules (both environmental and social) into our supply chain sustainability programme. And today 100% of the manufacturing factories making our fashion and shoes and over 400 processing factories and fabric mills report their performance in the Higg Index Facility Environmental (FEM) tool.
Read more about the SAC and the Higg Index.
Our suppliers self-report through SIPP and we validate the results. We determine what level of validation is appropriate for each factory based on their history, overall performance and risk assessments, among other indicators. We perform an onsite check at least once a year for all new and high-risk suppliers. We may use desktop validation (checking data and paperwork for anomalies and inconsistencies) if the supplier is low risk. We encourage our suppliers to set their own goals, priorities and focus areas. We reward those who set ambitious goals and maintain good performance, which incentivises our suppliers to improve their sustainability performance. These rewards include long-term business commitments and growth opportunities.
Validated assessments of our suppliers’ sustainability performance are used to identify their strengths and weaknesses. This information is used to ask our suppliers to set their goals and act to strengthen their capacity to better manage their sustainability performance. We work with our suppliers to identify areas where H&M Group can best provide support through capacity-building workshops, training and management systems analysis. We also build connections between our suppliers and other functions at our production offices, such as our merchandising and quality departments.
We use these connections to encourage our suppliers to develop their own strategies and solutions to challenges, as well as providing incentives to shift impacts from negative to positive.