H&M's struggle for ethical and sustainable fashion

"We take a long-term view on our business, and investing in our sustainability means investing in our future," said Karl-Johan Persson, CEO of Hennes & Mauritz in a press statement. The Swedish fashion retailer released its 12th sustainability report on Thursday,

which coincided with the launch of its Exclusive Conscious and Conscious collections and its alliance with Solidaridad, to achieve a more sustainable textile production chain.

H&M

recently introduced its seven commitments to do more for a sustainable fashion future, known as H&M Conscious, which range from recycling materials, reducing its carbon footprint, using more sustainable fabrics and offering fair living wages to its garment workers. H&M was also recently named as one of the World's Most Ethical Companies 2014 by Ethispehere Institute, an independent center of research promoting best practices in corporate ethics and governance.

"H&M is one of the companies that are honestly trying to make a difference," commented Yolanda Kakabadse, president of WWF International. But what difference is H&M really trying to make?

H&M previously stated that they are willing to sacrifice some of their profit margins in order to develop solutions for long-term sustainable fashion by investing in improved factory conditions and more sustainable materials. However despite this commitment, their sales seems yet to be heavily affected. During the last quarter, sales increased 12 percent in local currencies, with earnings increasing 8 percent. Although H&M did report slower profit growth during its first-quarter earnings report, the company lay the blame on the cost of investing in online expansion and not its investment in sustainable fashion.

Is H&M considering the 'planet's boundaries' with is global expansion plan?

"I hope that H&M will continue to grow and contribute to jobs and development around the world. But to continue growing, we need to consider our planet's boundaries," said Persson in a recent interview. "For the resources that we will still need, we must share them fairly between today's and future generations." However, H&M's commitment to creating sustainable fashion when its fast-fashion business model is based on producing several collections per season and introducing hundreds of new designs per weeks does raise a number of issues with the sustainable and ethical image the retailer is attempting to convey.

The Swedish retailer currently produces over 550 million garments each year and expanded its sportswear collection last year, whilst launching its new store concept & Other Stories. H&M also unveiled plans to open 375 new stores by the end of 2014, with its largest store in Europe slanted to open in Rotterdam late fall while entering new markets such as Australia and India. This means that more than one new H&M stores will be opened each day of the year, which questions the sustainability of the retailer's rapid growth.

Niki Janssen, coordinator at Clean Clothes Campaign (CCC) a collective of trade unions, charities and consumer organizations who work to support workers' rights commented: "Although every step H&M takes towards sustainable fashion is very important, as they have such a huge impact as the second largest clothing retailer in the world, they can do more for all their workers producing clothing."

In the CCC 'Tailored Wages' report, 50 of Europe's leading companies, including H&M were surveyed. The report examined H&M's work on wages which includes commitments to improving pricing method to ensure the true cost of labor by 2014 and reduction of average overtime by 35 percent, with 90 percent of suppliers perceiving H&M as a fair business partner by 2018 was reviewed.

"H&M will support factory owners to develop pay structures that enable fair living wage, ensure correct compensation and overtime within legal limits. This will be explored by implementing the Fair Wage Method in our role model factories," said H&M in the report. In 2014 the pilot scheme was introduced to three model factories, two in Bangladesh and one in Cambodia, were the retailer has 100 percent buying share.

"Despite the fact that H&M is putting in some effort for living wages, its not very convincing so far," says Janssen. One issue H&M's plan fails to address is a clearly stating a living-wage benchmark. "Although there are many good elements to what H&M has developed, without such a definition it is impossible to create a 'road map' to achieving the payment of such a wage or measure the road map's success," found the CCC report.

"Factory based negotiations will never led to workers earning 'fair living wages' "

Janssen also points out that a lot of H&M's strategy is aimed at encouraging negotiations for fair wages at factory level. "We agree that wages need to be negotiated, but believe that factory based negotiations will never led to workers earning 'fair living wages'." One of the main countries H&M sources its garments from, Bangladesh, official wage board raised the minimum monthly wage for entry-level garment workers from 3,000 takas (38 dollars) to 5,300 (68 dollars) last November.

However this amount is still less than the trade union supported minimum monthly wage of 8,000 takas (100 dollars), and a number of factory owners have raised concerns that the wage hike is too high. "A commitment must come from H&M to raise the wage significantly via a benchmark. Such a commitment may open the space in negotiations for trade unions to make wage demands that represent the real needs of workers."

"We are continuing to invest in our customer offering - with sustainability being an important added value," said Persson. The question remains as to who is really benefiting from the added value.

Photos: Clean Clothes Campaign, H&M Unconscious, H&M Image Gallery.