On April 14, 2012, H&M released its Conscious Actions Sustainability Report 2011, marking ten years of sustainability reporting by the Swedish retailer. The report focuses on the company's efforts to produce sustainable fashion not only today, but also in the future. A major development in the 2011 report is H&M's promise to support the long-term social development of Bangladesh - a key supplier country for the retailer: "Bangladesh is one of our most important sourcing markets and we want to ensure that the garment industry has a positive impact on the country's development, not just by contributing jobs, but also skills, education, health, and improvements in labour and women's rights," said H&M's CEO Karl-Johan Persson in the report.
The timing of H&M's social investment strategy is impeccable. By investing even more of its business in Bangladesh, where 25% of H&M's product line is already produced, the company has raised the stakes in an increasingly competitive garment industry.
H&M Conscious Actions Sustainability Report 2011.
Over the past year, H&M has been laying the groundwork for its expansion by meeting with government representatives, unions and its biggest suppliers. In 2011, the retailer joined the Fair Wage Network, an initiative that promotes better wage practices in supplier countries including Bangladesh. H&M has also been pushing for suppliers to set up democratic committees that can negotiate working conditions and wages with factory owners - a program that should get underway this year.
At the same time, H&M's investment in developing monitoring systems such as the Full Audit Programme, a monitoring tool intended to ensure compliance of its suppliers, is a solid effort towards ensuring its partners will be held accountable, or risk losing H&M's business. "We are big buyers in Bangladesh and we want to take greater responsibility for working conditions there," Persson said. "And we reward the suppliers who take the greater social responsibility with more business, larger orders and longer contracts."
But even with these developments, and with organisations advocating on behalf of workers, obtaining a fair wage and reasonable working hours is a constant struggle in countries where the garment industry is the driving force of the economy. Garment workers at the Singapore-owned SL Garment Processing plant in Cambodia, are currently on strike. Employees at the facility earn a base pay of $61 per month for eight hours days, six days a week. An agreement between the factory owners and more than 5,000 workers has yet to be reached.
Speaking about the situation in Bangladesh, which has its own share of worker issues, H&M's head of sustainability Helen Helmersson told Dow Jones Newswires that while the company wants to grow and expand in Bangladesh, the "ongoing instability in the country makes it difficult for us to plan production and makes us wonder if we dare grow there." H&M has experienced some success in raising awareness among factory workers in Bangladesh, which is the first step in addressing workplace issues, but unless factory owners are willing to implement initiatives sooner rather than later, H&M will more than likely be embroiled in an ongoing battle.
SwedWatch, an independent non-profit organisation reporting on Swedish business relations in developing countries, further notes that women account for 80% of the garment factory workers in Bangladesh, mostly in low-paying jobs, working overtime hours. A recent SwedWatch study found these women workers earned an average of $48 a month. That included two to four hours overtime pay per day.
Viveka Risberg, SwedWatch's administrative director, told The Source, "H&M and the other big companies can lobby the Bangladesh government to raise wages. And shoppers can lobby the companies to lobby the government. I think many people would be prepared to pay a little more if they knew that the person who has sewn the clothes at the other end has a more tolerable life."
Bangladesh's poor working conditions and political unrest has meant that H&M (along with other brands who source their products from Bangladesh) can either work towards achieving higher labour standards for more than three million garment factory workers, or pay the price of having to send buyers elsewhere. But Anwar-ul-Alam Chowdhury Parvex, Managing Director of Evince Group explained to the Financial Express, "actually, they [retailers] have no other suitable substitute to Bangladesh to source clothing at competitive prices." Chowdhury Parvex added that Bangladesh's local garment industry has established itself to the point where it's not only competitive but virtually impossible to beat, leaving retail giants including H&M, with nowhere to go. Evidently, despite the instability and unrest, it's essential for H&M to find a way to get more out of Bangladesh's workforce.
H&M's CEO Karl-Johan Persson.
Essentially, it appears that while H&M is drawing attention to the political and economic issues in Bangladesh, the company is doing so as a means of gaining stronger footing as a sustainable fashion brand. But the fact that H&M is simultaneously raising awareness around critical social issues while developing its image as one which is striving for better working conditions among its global business partners, can - and should - be a benefit on all sides of the equation. As a company that has funneled billions into marketing initiatives, positioning itself as offering designer-inspired fashion at unbeatable prices, when it comes to practicing socially responsible business, it can't afford to lose ground.
Among H&M's other credible efforts, Just Styled reports that the company, along with several other global retailers, is also looking to clean up the workforce by focusing on greening-up garment production in Bangladesh. The joint efforts will see cleaner and safer methods used in the dying, washing and finishing of garments, including water conservation technology that is intended to enhance the industry's long-term competition and sustainability.
H&M's efforts are an admirable move in the right direction. As a nation, Sweden's social programs are tightly woven into its cultural fabric. So it only seems a propos that, as the Swedish fashion retail giant, H&M should go to great lengths to create a socially responsible workforce, on a global scale. While there's little doubt that H&M's move to improve the social, economic and environmental conditions of Bangladesh's garment industry is in the company's best business interests, it remains a laudable effort, one that may in time build a better Bangladesh and H&M.
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