Case Study: H&M on Sustainability

The case study features H&M on sustainability. As we all know, sustainability is now a must in every organization. And companies are putting in more effort. They are integrating these initiatives into their values and culture. Many companies focus on sustainability, such as Netflix. Another company, that is changing the narrative is H&M. Indeed, H&M is one of the leading brands in the fast-fashion industry. Despite, the industrys prevalent abused and exploitation, H&M is changing the conversation and is leading the way for sustainability.

H&M: Humble Beginnings

It all started with Swedish entrepreneur Erling Persson who founded H&M in 1947. The first store was open in Vasteras, Sweden, and was called Hennes, which is Swedish for Hers. In 1968, Persson acquired another retailer company by Mauritz Widforss, and the name was changed to Hennes & Mauritz. Indeed, the stores success led the company to offer more clothing lines mens, childrens and teens. In addition, by 1974, the company is listed on the Stockholm Stock Exchange and was rebranded with the abbreviation H&M. Currently (before COVID), H&M operates over 5,000 stores worldwide and employs 120,000 people.

H&M: Take on Sustainability

An ethical company is dependent on strong ethical leadership. They correspond to each other. Indeed, looking at H&M Group, the leadership of Erling Persson has been passed on to his son and grandson, Karl-Johan Persson. And he retains that strong foothold of his grandfathers ethical values. No doubt, the company is transparent within the companys culture. Surely, the leaders are the main driver in building an ethical culture within the organization. The Persson Family treats H&M as a family business despite being a multi-billion-dollar brand. Clearly, strong ethical leadership is manifested in the companys corporate governance framework.

H&M: Take on Corporate Governance

Corporate governance will not be as effective if we only consider the legal aspect. It must also incorporate the ethical compliance mechanism. Lets shift our focus first to The Swedish Code of Corporate Governance. The code revolves around the principle of comply or explain. This means the company can deviate from the framework provided they can explain why it is so. And H&M is in compliance with this framework. This is quite evident if you look at their Corporate Governance Report which heavily focuses on sustainability. This means managing the company in a sustainable manner that is responsible and efficient. Above all, it must be aligned with the shareholders interests. The report revolves around having a strong ethical compass across the company and its supply chain worldwide.

Sustainability Initiatives: Becoming Full Circular

The circular economy is an emerging business model concept. Mainly because the current linear economy business model is not sustainable. Thus, H&Ms initiative on becoming fully circular is to fully optimize resources and minimize waste. And in order to become fully circular, H&M has integrated the concept. It is integrated from design, sourcing of materials, manufacturing, packaging, consumer use, and reuse/recycling of apparel.

According to H&M Sustainability Report (2019), the following are the companys initiatives in achieving the circular business model:

1. Sustainable Materials

Sourcing Cotton. In 2019, H&M invested in Infinited Fiber Company and a follow-on investment in Re:newcell. Indeed, the two companies made a revolutionary technology that produces new fiber material (cotton) from textile waste closing the loop. It is revolutionary because textile waste can be recycled endlessly without compromising the quality of the new material. In addition, H&M joined the Better Cotton Initiative (BCI) in 2010 to ensure cotton is sourced more sustainably. As of 2019, H&M is sourcing sustainable cotton at the 97% mark, and the target is to reach 100% by 2000.

Sourcing Wool. The production of wool is often associated with unsustainable and ethical practices. The H&M Group joined the Responsible Cashmere Round Table to reduce the social and environmental impact of cashmere production in Mongolia.

Leather. The H&M Group is part of the Responsible Leather Round Table and Leather Working Group focused on sourcing animal-derived leather that addresses social, environmental, and animal welfare impacts.

Chemicals. The H&M Group is a signatory of the Zero Discharge of Hazardous Chemicals (ZDHC) and is committed to achieving zero-emission hazardous chemicals from the textile supply chain by 2020.

2. Packaging

The H&M Group collaborated with Ellen MacArthur Foundation for its packaging reduction, circular design, and material choice. In addition, H&M has partnered with international design firm IDEO to create a sustainable and cost-conscious e-commerce packaging system. Thus, they aim to eliminate plastic shopping bags and replaced them with 100% Forest Stewardship Council (FSC) certified paper bags.

3. Reuse/Recycle

Product use and repair. The Clevercare label educates consumers on how to take care of their clothes like lower wash temperatures and hang drying instead of tumble drying. Stores in Sweden offer sewing repair services to customers.

Hello Sellpy. Pre-loved clothes H&M bought a majority stake in Sellpy, a Swedish e-commerce company that sells pre-loved clothes. H&M conducted a trial test which was a success last year and will be expanded to more stores in 2020.

Garment collection initiatives. H&M partnered with I:CO, a garment collection company that is scalable, ensuring efficiency in acquiring waste textiles. The investment is in place of Infinited Fiber Company and Re:newcell, converting old garments into new fabric, recycling the materials.

Why buy if clothes can be rented. H&M launched a rental service in Stockholm stores where consumers can rent from the Conscious Exclusive Collection.

Question 1

Based on the sustainability initiative and strategy adopted by H&M, discuss the strategic training and development process.

Question 2

If H&M would like to provide sustainability related training programmes to their sales associates, discuss the needs assessment process.