Monday, June 16, 2008

H&M - Recommendation: Good

This analysis was difficult. According to the scorecard, H&M ranked a 4.9. With an extra point because we consider them an industry leader in the branded fashion apparel category, the final score was 5.9. This is still not as high as we would have guessed just from reading their CSR reports.

Unfortunately, this is either the strength of the scorecard approach - in that it is able to cut through the company's PR hoopla about certain achievements . . . or, it is the weakness of the scorecard approach - in that most companies, even if they excel in certain areas, will receive a lower score overall because being socially responsible as a large international apparel retailer is hard.

In the end, we feel that, overall, H&M has shown a commitment to doing business in a socially responsibly manner. We were swayed by H&M's efforts on:
  • The Environment: We liked that H&M monitors key environmental impacts. Many apparel companies focus their CSR efforts primarily on human rights and labor issues. But, environmental impacts on the local communities where H&M's products are manufactured and the larger, global impacts of energy and water use, are becoming increasingly more important.
  • Transparency: H&M is a member of the Fair Labor Association. In joining the FLA, H&M commits to a rigorous labor compliance program that includes implementing the FLA Workplace Code of Conduct and conducting monitoring to ensure that any violations are identified and corrected. Member companies also agree to publicly disclose the results of FLA monitoring.
  • Performance Targets: We liked H&M's publicly available "Global Targets" (with employee names attached to each action).
  • Integration: H&M is one of the few apparel companies that recognize that the way the design and procurement process is handled with suppliers is very much connected to various CSR issues (such as forced overtime). CSR can not be an effort that exists in a departmental vacuum, but must be an initiative that is integrated throughout a company's operations. From the CSR report: "Fashion today works in short seasons or cycles. Without responsible buying practices this can result in time and financial pressures on suppliers that can prevent them from safeguarding their employees’ rights. So we must address product development and buying practices in different ways."
So, if that little black dress in the H&M window beckons you, go ahead and buy it (especially if it is made from organic cotton or recycled wool!!)

No comments: