Company Profiles

Hennes & Mauritz (H&M)

Sweden

H&M is a clothing designer and retailer based in Sweden. With stores located throughout Europe, recent expansion into the United States, and suppliers spread between Europe and Asia, this is a truly global company. The company has successfully made the shift from developing fashion at the lowest price to focusing on quality products (at the best price) designed to last, with the hopes of addressing the inherent unsustainability of the fashion industry. H&M is incorporating organic cotton into its garments and is working with suppliers on chemical restrictions, resource efficiencies and the development of environmental management systems. The company has a number of products meeting the strict environmental criteria for The Flower, the official eco-label of the European Union. Our interviews with H&M reveal that environmental principles are an integral part of both Swedish and H&M culture. The company also has good auditing of suppliers on social issues, and has worked with the Clean Clothes Campaign to make improvements in this area. Portfolio 21 suggests that H&M could improve its reporting by covering environmental metrics for global locations. Additionally, we suggest the company develop a clearer strategy for integrating green building techniques in its new and remodeled stores.

Contract Manufacturers and Labor Concerns

There are many concerns regarding labor issues in overseas factories. While certain companies have been the primary target of media attention, the issues are broader than one company or one industry. The global problems of working conditions and wage inequities are rooted in the economic system of globalization, and Portfolio 21 believes solutions to these issues will require significant action on the part of individuals (as consumers, citizens, and workers), as well as governments and business organizations. As an indicator of H&M's attention to these issues, Canada's Ethical Trading Action Group places the H&M in the leading pack of companies addressing labor concerns. One of the company's strengths, relative to others in the industry, is that it applies its code of conduct for supply chain labor standards to H&M's entire product offering, rather than just certain product groups. A report by Oxfam also highlights a cooperative effort between H&M and several other apparel companies that involved collaboration with the European Trade Union Federation of Textiles, Clothing and Leather, the Bulgarian Ministry of Labour, and Just Solutions. This initiative was designed to provide training regarding trade union rights to workers and other key stakeholders/organizations. To read our policy on this issue, and our suggestions for action, please visit our Globalization, Human Rights and Social Justice Policy.

To the best of our knowledge the above information is accurate and was obtained from sources we believe to be reliable. Neither the information presented above nor any opinion expressed shall be construed as an offer to sell or a solicitation to buy the security. The views expressed are those of portfolio management as of 11/30/07 and may not reflect current opinions or subsequent events.