California Transparency in Supply Chains Act
H & M Hennes & Mauritz AB and all companies included in the H & M group (hereby referred to as “H&M”) believe that a commitment to human rights and dedicated work to respect these rights must be a fundamental part of any business. Our Human Rights Policy is guided by those human rights as defined in the Universal Declaration of Human Rights, as well as children’s and women’s rights as outlined in the United Nations Convention on the Rights of the Child and the United Nations Convention on the Elimination of Discrimination against Women.
At H&M, we are committed to sourcing our products in an ethical and responsible manner. Hence, we continuously work to evaluate and manage the ethical, social, and environmental impacts of our business through our comprehensive sustainability program. Improvements and progress within sustainability, as well as remaining challenges in this work, are comprehensively reported on an annual basis in our Sustainability Report.
The California Transparency in Supply Chains Act of 2010 (SB 657) (“Supply Chain Act”) requires large manufacturers and retailers to disclose their efforts to eradicate human trafficking and slavery within their supply chains. The law’s underlying purpose is to educate consumers with information they need to make informed choices about the products they purchase. In accordance with the Supply Chain Act, H&M’s efforts to address forced labor, human trafficking and slavery in the direct supply chain are described herein.
To H&M, human rights due diligence is an ongoing process to identify, address (prevent, mitigate and/or remediate) and account for how we respect human rights in practice. All H&M business functions assess their sustainability risks, including human rights risks, annually to ensure the existence and adequacy of prevention and mitigation plans. In line with H&M’s due diligence guidelines, the legal, financial, social - including human rights-and environmental aspects of a purchase (of a product or service) are duly assessed before entering into a business relationship.
All suppliers must sign H&M’s Sustainability Commitment for Business Partners (“Sustainability Commitment”), which includes language strictly prohibiting forced labor, and undergo an initial self-assessment before H&M will place an order. If they pass, sustainability experts in our production offices conduct a thorough on-site verification to assess whether the factory lives up to our fundamental requirements. No production is allowed to start before to the on-site verification is carried out and it is confirmed that our minimum requirements are met. This is linked to our order system and orders cannot be placed until the factory is assessed and approved. H&M suppliers are disclosed publicly in our online Supplier List.
Continuous follow-up of our suppliers’ implementation of the Sustainability Commitment is an important risk assessment tool. H&M conducts both initial and follow-up audits of our supplier factories to verify our suppliers’ compliance with the Sustainability Commitment. For example, in 2015 each active first-tier factory was assessed 1.4 times by H&M. In addition, production units for H&M products must meet our minimum requirements, which are ascertained through an audit prior to production. As of today, our audit scope and monitoring program covers 100% of tier 1 manufacturing and processing units, as well as tier 2 component suppliers of fabric and yarn, amounting to approximately 60% of production volume. The initial audit to confirm our minimum requirements are met is announced to our suppliers. In general, so are the verification visits we undertake to verify suppliers’ self-reported compliance and performance data and information. Still, as stated in our Sustainability Commitment, we reserve the right to conduct unannounced visits at any time and consequently do so, if we get indications on potential violations. To learn more about the auditing results, visit our web page and the Supplier compliance levels in detail.
As noted above, H&M suppliers are required to sign and comply with our Sustainability Commitment, which explicitly states that “forced labour, bonded, prison or illegal labour is not accepted.” The Sustainability Commitment reflects H&M’s commitment to promote adherence to internationally agreed standards, including the Universal Declaration of Human Rights, the International Labour Organization’s Declaration on Fundamental Principles and Rights at Work, and the UN Guiding Principles on Business and Human Rights. The Sustainability Commitment also states that all suppliers must comply with the production countries’ labor laws and mandates that workers receive fair wages and benefits, at a minimum, in accordance with national legal level, industry level, or collective bargaining agreement, whichever is higher. In addition, the Sustainability Commitment requires that working hours in a week, as well as overtime hours, comply with national law, ILO Conventions or collective agreement, whichever provides the greater protection for workers.
For all our suppliers of commercial goods, H&M applies our Sustainability Impact Partnership Programme (SIPP), which monitors performance on a broad range of social and human rights issues, including forced labor. Based on the supplier’s SIPP results, each factory is given a Sustainability Index score of (0-100). In addition, we provide our contact details when visiting factories to enable workers to contact us, anonymously if they wish, and report concerns dealing with potentially unfair, unlawful or unethical business practices. Our local sustainability teams are tasked with investigating claims and addressing complaints. We follow up on all cases reported to us. Furthermore, we are working closely with our industry peers, business partners, external human rights experts and various global and local stakeholders to increase our capability to respect and uphold human rights principles. In our production markets, keeping a close dialogue with local unions representing workers is key for us to identify grievances on an industry level.
Our Sustainability Report addresses ten salient human rights issues, including forced labor, child labor and working hours. In 2014, together with an independent non-profit organization, H&M developed in- depth training on human rights and responsibility with its basis in the UN Guiding Principles on Business and Human Rights. In 2015, the training was conducted for top management in both our sales offices and our production offices as well as key roles in functions such as Sustainability, HR and Legal. Through a practical approach, the training aims to provide insight into actual and potential human rights impacts and equip our colleagues with hands-on knowledge and tools to assist in the implementation of our human rights policy.
Internally, H&M employs a dedicated team of around 200 colleagues who work with sustainability, including human rights, as their core task. Our sustainability staff operates from 21 locally-based production offices around the world and work directly with our suppliers to support them in complying with our Sustainability Commitment.
In addition, H&M employees are continuously trained on our policies, including those related to human rights, and our company values. More information can be found in the H&M Way and Policies Overview.
Annually, H&M publishes its sustainability work and performance in the Sustainability Report. The 2016 report will be available on April 4, 2017. The same date we will also disclose our Modern Slavery Statement which is prepared in accordance with the UK Modern Slavery Act 2015, and complements this report on how we work to address forced labor and modern slavery in our value chain.