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Sustainability Performance Report 2019 H&M Group Sustainability Performance Report 2019

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Sustainability Performance Report 2019 H&M Group Sustainability Performance Report 2019 Contents About this report Leading the Change Fair & Equal About this report 3 Our 2019 highlights 16 Our 2019 highlights 57 Letter from our CEO 4 Our approach to Leading the Change 17 Our approach to being Fair & Equal 59 Innovation 18 Human rights 61 Transparency 20 Our approach to fair jobs for all 63 About H&M Group Rewarding sustainable actions 23 Fair jobs in our own operations 64 H&M Group in 2019 5 Fair jobs in our production supply chain 66 Our value chain impacts 7 Inclusion & diversity 72 External recognition 8 Circular & Climate Positive Key Fair & Equal data 75 Our 2019 highlights 25 Becoming fully Circular & Climate Positive 27 Vision & strategy Our approach to climate and water 29 Supply chain management Vision & strategy 10 Climate positive 30 Supply chain management 77 Stakeholder engagement 13 Water 35 Sustainability governance 14 Our approach to circularity 37 Design 38 How we report Materials 39 Scope 81 Microfibres 44 UN Sustainable Development Goals 82 Chemicals 45 Auditor’s report 83 Packaging 46 Circular built environment 48 Maximising product life 49 Minimising waste 51 Key Circular & Climate Positive data 52 Page 2 H&M Group Sustainability Performance Report 2019 About H&M Group Vision & strategy Leading the Change Circular & Climate Positive Fair & Equal Supply chain management How we report About this report How to use our 2019 sustainability At H&M Group, we are working to ensure a the fashion industry. And we believe that by taking a sustainable fashion industry for all. Open reporting lead wherever we can and embedding sustainability reporting on our progress and challenges, and pushing for throughout our culture, values and business, we will Our reporting includes: greater transparency industrywide, contribute to our create a better customer offer for all our brands. We — This standalone Sustainability Performance achieving this goal. Through our nine brands we have are proud of the journey we are on, but appreciate Report, with information about our strategy, goals, connections to millions of people, communities and that there is a lot more work to do and much to learn. programmes, and performance data. businesses around the world. Together, we can tackle We hope our new streamlined reporting approach some of the most significant challenges facing our will help our many stakeholders and partners learn — Interactive web content — explore these web industry, society and planet. about our journey. Together we can reinvent the pages to see how we bring our strategy to life Our annual sustainability performance report fashion industry. across our entire value chain. provides a frank account of our sustainability efforts External reporting initiatives — — Global Reporting over the past year. This report summarises our goals, Read more about how we determine our material Initiative (GRI) and UN Guiding Principles (UNGP) strategies, challenges, activities and performance. sustainability issues. indexes, and Task Force on Climate-Related It highlights progress, as well as learnings and Financial Disclosures (TCFD) in our Annual Report. challenges. — Supporting web content containing more detailed We are part of an industry that faces significant information on specific sustainability issues. Find environmental and social challenges. We see great links to relevant content from this report. opportunities to meet these challenges, but this requires major transformation. We’re exploring new — Our Annual Report, which includes sustainability business models, innovating with new materials and related content. processes and collaborating with others to re-invent Page 3 H&M Group Sustainability Performance Report 2019 About H&M Group Vision & strategy Leading the Change Circular & Climate Positive Fair & Equal Supply chain management How we report Letter from our CEO When I was recently offered the opportunity to take positive contribution to the world. To us, this means while working to secure our business through these on the role as CEO, I already had a clear mission creating decent and meaningful jobs and promoting challenging times. We don’t yet know the full extent for our sustainability work – to put it at the heart inclusiveness and diversity. It means becoming to which this crisis will impact our business and of how we operate and develop the group. Having climate positive throughout our entire value chain by wider society. Being in the eye of the storm, it can be once been Head of Sustainability in this company, 2040, as well as achieving circularity. difficult to picture what the world will look like after I know the importance of environmental protection, Accelerating our agenda to become a circular everything has settled. But the recent development people empowerment and industry transparency business is one of our key focuses. We don’t have all also shows us that the transformation journey we are to build a sustainable business. These areas are not the answers ourselves, but by teaming up with – and on is crucial for us to remain relevant in the long-run only close to my heart but very much part of my investing in – pioneering companies that develop and beyond a crisis like this one. Our challenges may business perspective. ground-breaking technologies, such as Re:newcell be complex, but the high ambitions and solid work or Infinited Fiber Company, we can scale innovations described in the following pages keep me inspired To put sustainability at the core of our business is a and reinvent fashion together. and positive about the future. big opportunity to accelerate the pace of change. I’m confident that our close collaborations with We need to transform our business moving forward organisations such as the Ellen McArthur Foundation, – to secure that we continue to be successful in WWF, IndustriAll, the UN Global Compact and many the future, but also to serve a greater purpose as others will continue to inspire us, help us find even a company. In order to build a sustainable future, more solutions to transform ourselves and share best we will have to find new ways. It will require us to practice with both partners and competitors. rethink how we operate. We will have to develop new technologies, new business models, new processes As we finalise this report, the spread of COVID-19 and a new type of customer relations. is affecting people, communities and businesses all At H&M Group, we are continually working to over the world. Now, more than ever before, we are make our business model more sustainable to secure pulling together as one team, supporting each other Helena Helmersson long-term growth and, at the same time, make a and the communities around us as much as we can – CEO, H&M Group Page 4 H&M Group Sustainability Performance Report 2019 About H&M Group Vision & strategy Leading the Change Circular & Climate Positive Fair & Equal Supply chain management How we report About H&M Group H&M Group in 2019 H&M Foundation Our business is about making fashion and design 795 accessible to everyone in a sustainable way. This is million in-store and 93 million H&M Foundation is a non-profit global reflected in all our brands. foundation with a mission to act as a H&M Group includes nine brands: H&M, COS, online transactions for H&M catalyst for positive change and to improve Weekday, Monki, H&M Home, & Other Stories, ARKET brand alone. living conditions by investing in people, and Afound — as well as Sellpy, which we bought communities and innovative ideas. a majority stake in during 2019. Our brands offer Through partnerships across the world, customers a variety of fashion, design and services the H&M Foundation aims to accelerate the that enable people to be inspired and to express their 232.8 progress needed to reach the UN Sustainable own personal style, making it easer to live in a more billion SEK net sales. Development Goals by 2030. The foundation circular way. While each brand has its own specific is privately funded by the Stefan Persson DNA, they are all committed to making fashion more family, founders and main owners of the H&M sustainable. Group. Since 2013, the family has donated Our physical stores and integrated digital channels 5,076 1.5 billion Swedish Krona ($200 million/€163 reach customers around the world. Our global reach million). is strengthened by around 180,000 colleagues, stores* in 74 markets and operating in both sales and production markets. e-commerce in 51 markets. Learn more in H&M Foundation’s annual We’re connected to millions of people, communities, report, A Catalyst for Change. ecosystems and other businesses. *Includes 272 franchise stores. Page 5 H&M Group Sustainability Performance Report 2019 About H&M Group Vision & strategy Leading the Change Circular & Climate Positive Fair & Equal Supply chain management How we report Our supply chain Our supply chain is diverse and global — including 757 manufacturing facilities, cotton producers, yarn makers, transport and service providers, and many commercial product suppliers.* more. Supply chain management, particularly for our commercial goods suppliers, is crucial to our sustainability efforts and has historically been where we have had a major impact. 1,712 Across the supply chain, our influence is the manufacturing factories and final strongest where our relationships are closest. This is product processing units.*,** why we work with partners who share our values and our commitment to positive environmental and social impact. It’s essential we have the same ambitions and mindset to ensure compliance with our standards, 1.6 drive performance and impact. Supply chains are changing. For example, million people automated systems are becoming more common, employed by supplier factories. materials are easier to trace back to their original source, and increasing levels of migration present *Includes commercial products suppliers for H&M Group brands, and their manufacturing factories and final product processing units.
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