from old-fashioned to trend-setters
TRANSCRIPT
From Old-Fashioned to Trend-Setters - How H&M’s CSR Work has Developed over Time
Master’s Thesis 15 credits Department of Business Studies Uppsala University Spring Semester of 2020
Date of Submission: 2020-06-03
Saga Bowallius Rebecca Samuelsson Supervisor: Shruti Kashyap
Abstract Background: Corporate Social Responsibility has been studied since the 1970s, but was
originally controversial and met opposition from e.g. Milton Friedman who viewed a
company’s responsibility as being strictly economic. Since then, CSR has grown in scope and
importance, especially within the fast fashion industry, and is now a central part of academia
and business operations. However, the debate whether companies’ responsibilities are only
economic or also include responsibilities such as social, environmental, and transparency-
related is still ongoing, and it is therefore interesting to study how companies view their own
responsibilities.
Purpose: Our research aims to fill the existing research gap regarding how companies view
their responsibilities by providing an overview of how the CSR work has changed over time in
fast fashion companies.
Research Question: How has the focus of the CSR work changed over time in large,
international, fast-fashion companies?
Methods: A qualitative content analysis inspired by grounded theory was used to answer the
research question. The data material consisted of H&M’s sustainability reports from 2002,
2005, 2008, 2011, 2014, 2017 and 2019. The material was categorized into social,
environmental or transparency dimensions, along with several under-categories. A simpler
analysis of news articles regarding sustainability during the period 2002-2019 was also
performed.
Results: The results suggest that the fast fashion industry has increased their sense of
responsibility as the expectations of stakeholders in the area has grown, and that CSR work
increasingly is seen as a possible competitive advantage. The results also show that the most
difficult parts to fulfill is the ethical level of the CSR pyramid, due to the difficulty of
comprehending and fulfilling the stakeholders’ different expectations and demands, and the
social dimension, because of its profound complexity, especially within fast-fashion.
Keywords: CSR, Sustainability, Sustainability Reporting, Stakeholder Theory, H&M, Fast
Fashion
Key Concepts Fast fashion: Clothes that are made and sold cheaply, so that people can buy new clothes often.
Instead of having two seasons, fast fashion gives consumers new variations every week.
(Cambridge Dictionary, 2020)
CSR/Sustainability: Researchers have not come to an agreement of a unilateral definition of
CSR, however a generally accepted theory is Carroll’s CSR pyramid (Dahlsrud, 2008). A
common definition of CSR describes that companies have economic, legal, and ethical
responsibilities (Carroll & Schwartz, 2003; Carroll, 1991). In our thesis we use the concepts of
CSR and Sustainability interchangeably.
CSR/Sustainability reports: Corporate social responsibility reports are attempting to serve
one essential purpose: they portray the relationship between a corporation and society. They
seek to improve communications between the corporate world and the broader society within
which companies report. (Boston College - Center for Corporate Citizenship, 2010)
Table of Contents 1. Introduction _____________________________________________________________ 1
1.1 Disposition _____________________________________________________________ 3
1.2 Purpose & Research Question _______________________________________________ 4
2. Theory & Literature Review _______________________________________________ 5
2.1 Stakeholder Theory _______________________________________________________ 5 2.1.1 Special Interest Groups ______________________________________________ 7 2.1.2 Government _______________________________________________________ 7 2.1.3 Media ____________________________________________________________ 7
2.2 CSR Over Time __________________________________________________________ 7
2.3 The CSR Pyramid ________________________________________________________ 9
2.4 The CSR Dimensions ____________________________________________________ 11 2.4.1 The Social Dimension ______________________________________________ 11 2.4.2 The Environmental Dimension _______________________________________ 11 2.4.3 The Transparency Dimension ________________________________________ 12
2.5 Operationalization of Conceptual Framework _________________________________ 12
3. Industry & Case Background _____________________________________________ 14
3.1 CSR & Fast Fashion _____________________________________________________ 14
3.2 H&M _________________________________________________________________ 15 3.2.1 H&M’s View of CSR _______________________________________________ 16 3.2.2 H&M’s Vision ____________________________________________________ 16 3.2.3 H&M Way of Work ________________________________________________ 16
3.3 Summary ______________________________________________________________ 18
4. Method ________________________________________________________________ 19
4.1 General Methodological Choices ___________________________________________ 19
4.2 Data Sources ___________________________________________________________ 20
4.3 Analytical Approach _____________________________________________________ 22
4.4 Triangulation of Data ____________________________________________________ 23
5. Empirical Findings ______________________________________________________ 25
5.1 Social _________________________________________________________________ 25 5.1.1 Profitability _______________________________________________________ 25 5.1.2 Government ______________________________________________________ 25 5.1.3 Supply Chain _____________________________________________________ 26 5.1.4 Special Interest Groups _____________________________________________ 28
5.1.5 Employees _______________________________________________________ 29 5.1.6 Customers ________________________________________________________ 30 5.1.7 Communities _____________________________________________________ 31
5.2 Environment ___________________________________________________________ 32 5.2.1 Profitability _______________________________________________________ 32 5.2.2 Government ______________________________________________________ 33 5.2.3 Supply Chain _____________________________________________________ 33 5.2.4 Special Interest Groups _____________________________________________ 34 5.2.5 Customers ________________________________________________________ 35 5.2.6 Communities _____________________________________________________ 36
5.3 Transparency ___________________________________________________________ 38 5.3.1 Government ______________________________________________________ 38 5.3.2 Supply Chain _____________________________________________________ 39 5.3.3 Special Interest Groups _____________________________________________ 39 5.3.4 Customers ________________________________________________________ 40
5.4 Summary ______________________________________________________________ 40
6. Analysis _______________________________________________________________ 42
6.1 Economic ______________________________________________________________ 42
6.2 Legal _________________________________________________________________ 43
6.3 Ethical ________________________________________________________________ 44
6.4 Philanthropic ___________________________________________________________ 47
6.5 General Analysis ________________________________________________________ 48
7. Conclusions ____________________________________________________________ 50
8. Limitations & Further Research ___________________________________________ 52
9. References _____________________________________________________________ 53
Appendices _______________________________________________________________ 58
Appendix I ________________________________________________________________ 58
Appendix II _______________________________________________________________ 59
Appendix III ______________________________________________________________ 60
Appendix IV ______________________________________________________________ 61
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1. Introduction Over the past years, financial information has become increasingly insufficient in
understanding a company’s performance. In order to provide a fairer view of company
performance, an increasing amount of non-financial disclosures have been incorporated into
firm reporting practices. One increasingly popular form of firm disclosure in this context
consists of reporting on the work within Corporate Social Responsibility that companies do.
Corporate Social Responsibility (CSR) has been studied since the 1970s (Carroll, 1979). It was
originally controversial, and was strongly opposed by researchers such as Milton Friedman
(1962), who viewed a company’s responsibility as being strictly economic. Over the decades
since then however, CSR has grown in scope and importance, and is now a central part of
academia and business operations. However, the debate whether companies’ responsibilities
are only economic or also include responsibilities such as social, environmental, and
transparency-related is still ongoing (Grafström, Göthberg & Windell, 2015). It is therefore
interesting to study how companies view and portray their own responsibilities.
One industry wherein CSR is especially important is the fashion industry (Perry & Towers,
2013). Because it is an industry which is both globalized and highly competitive these factors
contribute to the increase in importance of CSR work (Arrigo, 2013; Sumner, 2018). The sub-
branch of the fashion industry referred to as fast fashion, within which companies like H&M
operate, has rapidly become a large segment. Fast fashion is more responsive to trends and a
more agile form of fashion compared to the conventional (Gupta & Gentry, 2018). Accordingly,
fast fashion launches up to 20 seasons compared to two seasons, per year, of the conventional
fashion company, alongside with low prices and controlling the supply, creates manipulated
scarcity which results in ‘must have items’ and the promotion of consumption (Birtwhistle &
Moore, 2007). However, in order to maintain this agility and responsiveness, fast fashion
companies have rearranged their supply chains and production, affecting both workers in the
production unit as well as the environment in a negative way (Becker-Leifhold & Heuer, 2018).
For example, producing synthetic fibers requires many hazardous chemicals that are a danger
to both workers and the environment (Lynch, 2009). These changes towards the promotion of
consumption in the fast fashion industry have increased the need for companies to take a bigger
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responsibility in their CSR work since they have been criticized for not doing enough good
(Anguelov, 2016).
From a societal perspective, CSR disclosures have risen in importance over the past years,
including in the fast fashion industry. In Sweden for example, a 2019 study by Svensk Handel
indicates that Swedish consumers express that it is of increasing importance to them that fashion
products are made in a sustainable way. In the study, which measured how important Swedish
consumers considered sustainable products to be, fashion was ranked as the third most
important product category, with only sustainable food and beauty products being considered
to have more importance than fashion products (ibid.).
Despite the above identified demand for better CSR disclosures, there continues to be a general
lack of CSR research in the fast fashion industry (Arrigo, 2013). In particular longitudinal
studies of CSR are seldom performed (Aguinis & Glavas, 2012). Since CSR is an increasingly
crucial and rapidly changing topic (Grafström, Göthberg & Windell, 2015), and with the
indications of the growing importance of CSR in the fashion industry from both companies and
consumers (Sumner, 2018; Svensk Handel, 2019), more research on this topic is needed. The
work that will be undertaken in this thesis aims at addressing this important research gap.
This study is a qualitative study that seeks to answer the question How has the CSR work
changed over time in large, international, fast-fashion companies? and in order to execute this
investigation, a longitudinal case study approach was taken and the data was analyzed by using
a qualitative content analysis method. We have used the representative, for the fast fashion
industry, case company - H&M, which is a large, multi-national, family-owned fast fashion
firm (Giertz-Mårtensson, 2012). The study was done through a periodic selection of H&M’s
sustainability reports from 2002-2019 in combination with a media coverage search and
analysis from the same period. This was done in order to achieve triangulation of the collected
data. H&M published their first standalone CSR report in 2002 and has produced yearly reports
on the topic every year since. During the same time, H&M has gone from operating in 14
markets (H&M, 2002a) to 74 (H&M, 2019a), and has become the second or third largest fast
fashion company measured in revenue, depending on current exchange rates (Gestalt & Garcia,
2019). Studying H&M provides the literature with important indications of how the fast fashion
industry in general views their societal responsibilities and how the CSR work has changed
over time. The study specifically looked at different CSR dimensions (i.e. Social,
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Environmental, and Transparency) as well as different levels of Archie B. Carroll’s (1979)
pyramid of CSR (i.e. Economic, Legal, Ethical, and Philanthropic).
The analysis shows that the economic and legal levels of Archie B. Carroll’s (1979) CSR
pyramid have been fulfilled by H&M in all the years under study, and within all three
dimensions (social, environmental or transparency). The ethical and philanthropic levels of the
pyramid were increasingly fulfilled across the time-period studied, although the fulfillment of
the ethical level within the social dimension was negatively affected by scandals relating to
supply chain workers’ rights and advertisements. The results generally suggest that the fast
fashion industry has increased their sense of responsibility as the expectations of stakeholders
in the area has grown. There is also a clear indication that CSR work is increasingly being seen
as a possible competitive advantage for fast fashion firms such as H&M. The most difficult part
in fulfilling the CSR pyramid is the ethical level, due to the difficulty of comprehending and
fulfilling the stakeholders’ different expectations and demands. Within the fast fashion industry,
the expectations within the supply chain dimension seems especially difficult to comply with,
because of their profound complexity.
1.1 Disposition
The disposition of our study is as follows; In Section 1 we introduce our research question and
the motivation behind our study as well as a brief overview of the methodology and results of
the study. In Section 2 we present the theories, concepts and prior literature, that makes up our
conceptual framework in this study and an overview of how this framework is operationalized
in the analysis. In Section 3 Industry & Case Background - we present some important
background information about CSR in relation to Fast Fashion, as well as a history of the case
company. In Section 4 we present the methodological approach of this study in greater detail
from how the data collection was performed to how the analysis took form. Section 5 lays out
the data that we have collected from both the sustainability reports and the media coverage.
This section takes the structure of the themes that became clear to us from the coding of the
data. In Section 6 we use our conceptual framework and apply and contrast it to the empirical
findings. In Sections 7 & 8 we present our conclusions from the study as well as limitations of
it and propose ideas for future research based on our conclusions and limitations.
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1.2 Purpose & Research Question
Our research aims to fill the existing research gap regarding how companies view their
responsibilities by providing an overview of how the CSR work has changed over time in fast
fashion companies. To do this, the study has analyzed how sustainability work in the fast
fashion industry has developed during the period 2002-2019 in order to answer the following
research question.
How has the focus of the CSR work changed over time in large, international, fast-fashion
companies?
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2. Theory & Literature Review
In the following section we present the theories that make up the conceptual framework used in
this study in order to further investigate: How has the focus of the CSR work changed over time
in large, international, fast-fashion companies? This section starts with an explanation of
Stakeholder Theory which is the overarching theory of the thesis. The theory is used to explain
the changes in CSR that become evident in the data material. Then, a more detailed description
of CSR development over time in the literature is presented. This is followed by the CSR
pyramid and continues with the three dimensions of CSR that we have found in our empirical
process. The section ends with an explanation of how we have operationalized these theories
in the study.
2.1 Stakeholder Theory
Traditionally, company success has been measured by financial measures such as stock price
or earnings per share. This means that any action or inaction performed by the company had to
be justified to the stockholders (Freeman & Reed, 1983). This is still the perspective of
shareholder theory, which suggests that the firm’s only moral responsibility is to provide return
to its financiers, as long as they do not engage in deception or fraud (Smith, 2003).
The stakeholder concept first coined in 1963 by the Stanford Research Institute, proposes that
companies also have responsibilities to other groups (Freeman & Reed, 1983). The managers
are viewed as agents for all stakeholders, and have to ensure that none of the stakeholder’s
ethical rights are violated and make decisions that are in the best interest of all
stakeholders (Smith, 2003). Furthermore, Smith (2003) also argues that these two
responsibilities exist in order to ensure a balance between profit maximization and long-term
survival of the company.
According to Freeman, Harrison & Wicks (2007), the stakeholders (see Figure 1 next page) are
those that “can affect or are affected by the corporate activities” (p. 242) and can be divided
into primary and secondary stakeholders. Primary stakeholders are the ones that have a direct
stake in the company, which the company relies on for existing in the short term. The secondary
stakeholders lack this importance, but can still have a varying degree of influence on the
company’s future (Freeman, Harrison & Wicks, 2007).
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However, a relation does not have to be direct to be important. One example of this is special
interest groups, that usually examine companies’ actions and compile the information in reports
that are sent to other stakeholders. These reports can then have a large influence on other
stakeholders’ behavior, especially if they result in a scandal in the media (Grafström, Göthberg
& Windell, 2015, p. 76). The relationship between the company and the stakeholders are also
bidirectional. One way that the company can for example affect the stakeholders through
lobbying, applying voluntary standards and through cooperation (Grafström, Göthberg &
Windell, 2015).
The ultimate power of implementing CSR practices or not lies of course with the company
itself, which can be either reactive or proactive (Grafström, Göthberg & Windell, 2015, p. 105).
Nevertheless, according to Grafström, Göthberg & Windell (2015), the power, legitimacy, and
urgency of each stakeholder and its demands determine which stakeholders are the most
important to a company, and based on this, companies prioritize between the sometimes-
conflicting demands. So as companies, stakeholders and their interplay change over time, the
societal trends and expectations of companies evolve, and companies have to adjust in order to
achieve legitimacy (ibid.).
Figure 1. The different stakeholders. (Source: Freeman, Harrison & Wicks, 2007, p. 7)
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The most important stakeholders when it comes to CSR are special interest groups, government
and media (Grafström, Göthberg & Windell, 2015).
2.1.1 Special Interest Groups
Special interest groups are privately owned non-profit organizations which aim to work for a
special set of interest, and thereby contributing to common good. Many special interest groups
focus on human rights or the environment and perform studies, develop guidelines and/or
consult with companies. One reason for the importance of special interest groups is that states,
media and other stakeholders increasingly pay attention to their knowledge and demands.
(Grafström, Göthberg & Windell, 2015, p. 87-90)
2.1.2 Government
Because of their ability to create laws, states are naturally an important stakeholder for
companies. CSR work, however, is much driven by voluntary action, although legal obligations
have increased over the years. (Grafström, Göthberg & Windell, 2015, p. 90-94)
2.1.3 Media
Attention from the media makes some issues become more important than others. They often
report on the sustainability work of the United Nations, and the reports created by special
interest groups. The media can be seen as having an interest in the company, but also work as
an intermediary that other stakeholders use in order to achieve their interests. They help set the
agenda for society at large, and have increased their focus on CSR in the 21st century.
(Grafström, Göthberg & Windell, 2015, p. 94-98)
2.2 CSR Over Time
The concept of corporate social responsibility (CSR) started to take form in the 1950’s, but was
then referred to as social responsibility (SR). Compared to today’s broad definition of the
concept, it was a narrower definition. It was a notion that top managers should act in the best
interest of certain groups that were associated with the company (Carroll, 2008). Those groups
were mostly the employees, philanthropy-recipients, and stockholders (ibid.).
Some scholars, on the other hand, were against the notion of a company having any social
responsibility at all. Friedman (1962) argued that the only social responsibility a company has
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is to its; stockholders, and maximizing their profits. Although this debate is still ongoing, it is
clear that more and more companies manifest a will to take societal responsibilities in different
ways (Grafström, Göthberg & Windell, 2015).
From the earlier days up until the 1970s’ CSR was more about discussing and spreading the
knowledge of social responsibility that companies have, and less about real actions from the
companies. During the 1970s’ the base of what we today consider the definition of CSR to be
was founded from, e.g. Archie B. Carroll’s four-parted definition of CSR. Which later became
the CSR pyramid consisting of; economic, legal, ethical, and philanthropic responsibility
(Carroll, 1979).
From the 1980s’ the concept of CSR has shifted its main focus, to a much broader sense. More
components were incorporated in CSR, environmental issues amongst many others. And took
on a more stakeholder direction, instead of merely concentrating on a few groups. Globalization
and an increase in competitiveness between companies, have put CSR in a position where a
company can have a competitive advantage by working with CSR, transforming it into; value
creating actions and firm performance (Carroll, 2008; Ferramosca & Verona, 2020).
Globalization created new issues to be handled for companies, not just handling domestic issues
but also having to take responsibility in other countries as well (Carroll, 2015). Previous
research has also shown that companies that do include Corporate social responsibility
information in their annual reports “have better corporate governance ratings; are larger; belong
to higher profile industries; and are more highly leveraged” (Chan, Watson & Woodliff, 2014,
p. 59).
The idea of a company's rights and obligations are continuously debated and perceptions change
over time, and the idea of companies being responsible towards society has increased over time.
The biggest increase can be seen in large, publicly traded companies in the late 1990 and
onwards. Which is affirmed by Gray, Kouhy & Lavers (1995), who showed that larger
companies tend to have more CSR work. Moreover, another reason for this change are the
scandals, such as Enron’s accounting scandal that led to the company’s bankruptcy, and the
campaign against Nike’s use of cheap labor in developing countries, which also had an effect
on the clothing industry as a whole (Grafström, Göthberg & Windell, 2015, p. 17-18).
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2.3 The CSR Pyramid
Archie B. Carroll has been a prominent researcher within the field of Corporate Social
Responsibility (Baden, 2016; Dahlsrud, 2008). Carroll (1991) argues that firms have gone from
having a strictly economic responsibility, to having to obey the law, to having additional
stakeholders such as employees and the environment. With this as the basis, Carroll has created
the pyramid of CSR, which aims to characterize a firm’s CSR work in a way that is useful for
finding the balance between different stakeholders. Figure 2 illustrates the pyramid which
consists of four levels of responsibility; economic, legal, ethical and philanthropic (Carroll,
1991).
Figure 2. The pyramid of Corporate Social Responsibility. (Carroll, 2016, p. 5)
Economic responsibilities. The economic responsibilities are considered the basis of all
business. Even CSR has to be based on economic sustainability in order to be legitimate. A
firm’s basic role is to produce goods or services and produce an acceptable profit. (Carroll,
1991)
Legal responsibilities. In addition to economic responsibilities, the firm’s operation has to
follow the law. These set out the fundamental ideas of fair operations, these responsibilities are
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seen as “codified ethics” (Carroll, 2016). The legal level is, together with the economic
responsibilities, the principal concepts that a firm has to follow.
Ethical responsibilities. The ethical responsibilities include the standards, norms and
expectations that consumers, employees, shareholders, and other parts of the community view
as fair but are not included in law. These ethics and values change faster than the laws, since
they are the guiding force behind the creation of laws. These ethical responsibilities are
therefore dynamic and often debated in society since, and can therefore be difficult for
companies to address. (Carroll, 1991; Carroll, 2016)
Philanthropic responsibilities. The last level includes active participation in contributing
financial or human resources to improve the quality of life in communities. Unlike ethical
responsibilities, however, the philanthropic level of CSR action is not expected, however it is
appreciated. Therefore, Carroll (1991) argues that this is the least important part of CSR work.
The CSR firm should, of course, strive to “make a profit, obey the law, be ethical and be a good
corporate citizen. The four levels of the CSR pyramid are, however, in constant tension with
each other (Carroll, 1991), with the most tension between the economic responsibilities and the
others. They are, however, not in complete opposition to each other and are fulfilled
simultaneously (Carroll, 2016).
Carroll & Schwartz (2003) argue that a common misunderstanding with the pyramid is that it
is hierarchical, with the bottom steps having to be fulfilled before moving upwards or that some
steps are less meaningful than others. In reality, the steps can be followed in whichever order
and even overlap, for example an action could be motivated both by economic, legal, and ethical
responsibilities (ibid.).
However, even though the CSR pyramid is a generally accepted and seen an influential theory
in CSR research (Carroll & Schwartz, 2003; Baden, 2016), there has been a line of attempts to
further expand as well as attempts to try and mitigate any misconceptions of the theory.
According to Baden & Harwood (2013), the moral, environmental, and ethical side of CSR is
not given as much attention in research as the economic side of it. Therefore, in this thesis we
have expanded our conceptual framework to include three dimensions of CSR as well. The
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dimensions have been found and are derived from our collected and coded data as well as prior
literature.
2.4 The CSR Dimensions
In this section we present the three dimensions of CSR that we have chosen to incorporate in
our conceptual framework for this study. Social and environmental was chosen since they, as
stated above, have not been given as much attention as other dimensions (e.g. economic) in
Carroll’s CSR pyramid (1979). However, these dimensions are incorporated in the Triple
Bottom Line. The TBL is a concept that goes beyond the economic result of a company, and
adds to that the social and environmental value they create (Elkington, 2013). The discussion
of the environmental aspect of business has been especially prominent in the context of the
triple bottom line also referred to as TBL or People, Planet & Profit (Grankvist, 2009).
Moreover, the transparency dimension is an addition to the framework, that was found as an
emergent theme from the data and therefore incorporated. In this thesis we combine the CSR
pyramid with the three dimensions which has, to our knowledge, not been done in prior
literature.
2.4.1 The Social Dimension
The social dimension is one of the two most frequent dimensions in the CSR definition
(Dahlsrud, 2008). And within this dimension is the relationship between business and society
(ibid.) and it is about being a good member of society and looking out for everybody that is in
some way associated with your business (Grankvist, 2009). Elkington (1999), describes how
social capital should be used to measure the social responsibility that a company takes. The
author also argues that if companies do not take responsibility within this broader dimension,
that can be disastrous for other sustainable actions that they have taken (ibid.). This is due to
the fact that these concepts are interconnected within the TBL.
2.4.2 The Environmental Dimension
The presence of the environmental dimension in CSR definitions is lower than the other
dimensions (Dahlsrud, 2008). Although one explanation can be that some organizations
separate environmental work from CSR, another is that this dimension was not included in the
earlier definitions of CSR however it has gradually been more included in CSR over time. The
environmental dimension was, however, present in over half of the definitions that Dahlsrud
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(2008) studied, and is therefore included as a CSR dimension. Grankvist (2009) argues that a
company has to take environmental responsibility by making sure that it does not have a long-
term negative effect on the environment.
2.4.3 The Transparency Dimension
Transparency in organizations refers to the information that the company discloses to external
groups and how accurate that information is perceived to be (Brandes & Darai, 2017).
Schnackenberg & Tomlinson (2016) defines transparency as “Transparency is the perceived
quality of intentionally shared information from a sender” (p. 1788). According to the authors,
a good transparency in reporting will boost the performance of the company because a higher
level of transparency will increase the level of trust in stakeholder relations (Schnackenberg &
Tomlinson, 2016). This trust is created when stakeholders get full access to the proper
information in regard to their business relationship, and this will lead to the organization being
perceived as a transparent one (Augustine, 2012).
According to Dubbink, Graafland & Liedekerke (2008), there is a lot of literature that points to
the fact that a high level of transparency is a prerequisite for a company to get the full benefit
of performing CSR work. The authors also argue that, if a company does not disclose their work
within CSR, i.e. the company is not transparent, external stakeholders cannot differentiate
between companies that are successful in CSR and those who are not (ibid.). If a company does
not get recognition for its efforts within CSR, the incentive for further development, of e.g.
product innovation in sustainable materials, would decrease (Dubbink, Graafland &
Liedekerke, 2008). Transparency will also increase accountability and responsibility for the
company in regards to the CSR issues that they work with (Schnackenberg & Tomlinson, 2016)
and the risk of being exposed by stakeholder also increase the sense of responsibility (Mabillard
& Pasquier, 2016).
2.5 Operationalization of Conceptual Framework
According to Lynham (2002), operationalization refers to when the parts of the conceptual
framework are connected to practice. In this thesis we seek, in part, to use the theories and
perspectives that have been presented in this section, in the real-world context of H&M’s CSR
report and media coverage and how the focus has changed over time. And it is through this
operationalized approach that we illustrate how we have bridged and connected theory with
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practice (Lynham, 2002). Specifically, in this study, the CSR pyramid serves as a conceptual
framework to analyze our findings and the dimensions of CSR outlined in the theory section
served the role of guiding both out initial coding, as well as our classification of codes. These
two theoretical components are linked together explicitly in section 6, and somewhat more
implicitly in section 5.
As further elaborated in Section 4, this thesis is based on an abductive approach, meaning that
the data and theory collection is performed simultaneously. During the analysis phase we have
taken a mainly deductive approach, which means that we have analyzed the empirical findings
through the lens of the fundamental CSR theory; Carroll’s (1979) CSR pyramid. Moreover,
when analyzing the data, the three dimensions; environment, social, and stakeholder will each
be analyzed by looking for initiatives on each level of the pyramid. Table 1 visualizes the way
that the analysis will be performed and provides examples of observations that can be made.
Table 1. Environment Social Transparency
Philanthropic Unexpected environmental
initiatives, e.g. leading change
Unexpected social initiatives, e.g. leading
change
Unexpected transparency initiatives, e.g. leading
change
Ethical Expected environmental initiatives, e.g. certifications
Expected social initiatives, e.g. certifications
Expected transparency initiatives, e.g. certifications
Legal Following environmental laws Following social laws Following transparency
laws
Economic
Economically driven environmental initiatives and motivations, e.g. save energy
costs, sales
Economically driven social initiatives, e.g.
to avoid sanctions
Economically driven transparency initiatives, e.g. to avoid sanctions
This table shows how we have operationalized the conceptual framework.
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3. Industry & Case Background
In this section we start with presenting the development of CSR in the fast fashion industry from
previous research. Then in Section 3.2 - H&M, we present a brief history of the case company
as well as; how their view of CSR, vision, and way of work with CSR has changed over the
studied period.
In a global market, like the fashion market, companies have to pay constant attention to
competitors’ actions and demand requirements (Arrigo, 2009). Furthermore, H&M is the
second or third largest fast fashion company measured in revenue, depending on current
exchange rates, following Inditex and sometimes Fast retailing (Gestalt & Garcia,
2019). Therefore, it is reasonable to assume that H&M’s actions will have influence over, and
be influenced by, other companies in the same market, and that the results of the study will have
important indications for the whole industry.
3.1 CSR & Fast Fashion
According to Arrigo (2013), fashion companies that do not engage in social and environmental
work risk getting “a damaged image, a loss of consumer and shareholder trust as well as the
difficulty in attracting qualified employees” (p. 176). The study also shows that the CSR work
for the fast-fashion chain the GAP resulted in employee attraction and motivation, a powerful
brand, enhanced consumer perceptions and profitability (Arrigo, 2013).
One reason why CSR is especially important for fashion brands is due to globalization of the
industry (Arrigo, 2013; Sumner, 2018). The fast fashion industry has for a long time been
criticized for its negative effects on society, i.e. through the promotion of consumption, and for
insufficient work with ethics (Anguelov, 2016). One example of this relates to the tendency to
locate the production of fast fashion to countries where workers’ salaries are low and their rights
are weak (ibid.).
The fashion industry is also highly competitive, and the closeness to consumers are important
(Arrigo, 2013). According to a report published by Svensk Handel (2019), only food and beauty
products ranked higher than fashion, when consumers were asked about the importance of
sustainable products. And when asked, 76% of consumers thought it was either important or
15
very important that the products were developed with the largest possible sustainability focus,
and the importance increases every year. At the same time, the report further claims that the
fashion industry is one of the retail industries where the lowest share of companies works
actively with sustainability (ibid.).
One possible explanation for the lack of sustainability work in fashion although the consumer
attitudes favor sustainable products is an attitude-behavior gap. Although consumers like
sustainable products more, other factors, such as price, are more determining factors when the
purchase is made. Also, a lack of transparency regarding sustainability, or customer knowledge
about sustainability, is an explanation for the attitude-behavior gap. (Wiederhold & Martinez,
2018)
3.2 H&M
The clothing company H&M (formally known as Hennes) was first founded back in 1947 by
Erling Persson, and quickly got successful and opened more stores in Sweden (Giertz-
Mårtenson, 2012). In 1964 the first store outside of Sweden was opened in Norway, after that
came stores in most of western Europe (ibid.). The first US store came in 2000 (H&M, 2020a)
and by 2002 the company had 844 stores worldwide and were present in 14 countries (H&M,
2002a). Today the company is located in 71 markets, 47 of which are also available online, and
the H&M group consists of eight different brands (H&M, 2019a).
In 1997 H&M started working with CSR through the launch of their first Code of Conduct, i.e.
a contract between H&M and their suppliers, stipulating CSR rules, (H&M, 2008, p.12).
Between 1997 and 2001 an overview of the CSR work was published in the annual reports.
However, in 2002 the CSR work was given a separate Sustainability Report, that has been
published every year since.
One aspect that has shaped the H&M business is the value of self-financing. Erling Persson
advocated that the company should grow without debt-financed investments. Despite this
restriction, H&M has been the most successful company in the Swedish stock market since its
IPO in 1975 (Giertz-Mårtenson, 2012). The founding family still owns 48,4% of the shares and
74,9% of the votes in the company (H&M, 2020b).
16
Earlier research about H&M has focused on their supply chain (Shen, 2014), communication
(Dach & Allmendinger, 2014) and internationalization (Mo, 2015), however relatively little
attention has been given by the scientific community to H&M and the fashion industry
compared to other industries (Giertz-Mårtenson, 2012).
3.2.1 H&M’s View of CSR
The 2002 and 2005 reports are called “CSR Reports”, and are based on their definition of CSR.
In these reports, H&M write that they have chosen to define CSR as “a concept whereby
companies integrate social and environmental concern in their business operations and in their
interaction with their stakeholders on a voluntary basis in order to meet or exceed the ethical,
legal, commercial, and public expectations that society has of business”. (H&M, 2002, p. 6;
H&M, 2005, p. 7)
From 2008 onwards, the reports are renamed as Sustainability reports, which H&M defines as
“the needs of both present and future generations must be fulfilled.” (H&M, 2008, p. 6). This
is a less clear definition, and seems to focus somewhat more on the environment than the social
part, although both are clear focus areas for the reports.
3.2.2 H&M’s Vision
H&M’s sustainability vision has changed dramatically over the years (see Appendix I). It has
gone from focusing on “upholding” human rights and “contributing” to a sustainable
development towards integrating it into all operations and to “lead the change”. The
development shows a gradual increase in scope and ambition.
In the first years, the vision also focused on earning trust from stakeholders. This implies that
stakeholders had low or no trust in H&M’s sustainability work. The fact that this was scrapped
from the vision could indicate that they have succeeded in gaining trust from stakeholders.
3.2.3 H&M Way of Work
From the beginning of the CSR reports H&M did not have a written down CSR strategy, an
aim to have one was first presented in the 2008 sustainability report which states that during
2009 the new strategy will be rolled out (H&M, 2008, p. 4). And goal and KPI development is
under way and will be finished during 2009. The strategy has then shifted focus and been altered
and added to during the years. For example, H&M has had a Code of Conduct agreement
17
regarding different aspects of CSR, this was a contract signed by suppliers aiming at upholding
them to a certain sustainable way of conducting their business and production.
The amount of integration of CSR in the day-to-day business within H&M has developed
during the period from 2002-2019. In the sustainability report from 2008 the development was
described as “The biggest change is that we now make sustainability a shared responsibility in
the entire organization.” (H&M, 2008, p. 3) and in the 2011 report “We work to make
sustainability a natural and fully integrated part of everything we do.” (H&M, 2011, p. 10).
During the same time reaching different CSR related goals such as environmental ones, started
being a responsibility and having the same high priority as other goals for each individual
business unit, as part of this integration.
H&M shifted their focus of CSR integration, from being mainly focused on their own company
towards the importance of CRS integration in the entire industry illustrated by the following
quote “... to maintain our business idea, we need to maximize the positive impacts and minimize
the negative impacts we have along our value chain. We achieve this by using our size and scale
to leverage and catalyze changes that improve the operation of our own value chain as well as
the wider industry.” (H&M, 2017, p. 5). And in the latest report from 2019 this point is made
even more clear “At H&M Group, we are working to ensure a sustainable fashion industry for
all.” (H&M, 2019, p. 3). And at the core H&M expresses the aim to be the leader of this change
in the industry “We’re exploring new business models, innovating with new materials and
processes and collaborating with others to re-invent the fashion industry.“ (H&M, 2019, p. 3).
Although sustainability work has become more incorporated into all H&M’s employees’ work,
the number of employees dedicated to sustainability work has increased (see next page Table
2). These include both the auditors going over the compliance of the Code of Ethics,
Sustainability commitment etc. in the supply chain, as well as employees in the HQ. Overall,
the H&M Group went from having 39 000 employees in 2002 (H&M, 2002, p. 11) to 179 000
employees in 2019 (H&M, 2020c). The proportion of CSR employees has therefore gone from
0,77 to 1,34 per 1000 employees.
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Table 2.
Year 2002 2005 2008 2011 2014 2017 2019
Employees Working in CSR 30+ 50 86 110 170 150 240
This table shows the number of employees working in CSR each of the studied year, as stated in the sustainability reports.
3.3 Summary
In this section we have presented how CSR has progressed within the fast fashion industry and
a selection of information about the case company has also been presented. In the last part of
this section, a brief history of the case company H&M has been presented. As well as the
company’s view of CSR, vision, and the way they work with CSR, and how these three
components have developed from 2002-2019.
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4. Method
In this section we describe the methodological approach of this study. In this thesis we will
conduct a longitudinal case study methodology, by incorporating data from both sustainability
reports and media coverage. The section starts with presenting a general overview of what has
been done in this thesis and the following section describes our two data sources in more detail.
In Section 4.3 - Analytical Approach, we present how the two different kinds of data have been
processed and created the base for our analysis. In the last part of this section we explain the
concept of triangulation and why it was necessary and beneficial for this thesis.
4.1 General Methodological Choices
In this thesis we conduct a longitudinal case study methodology, by incorporating data from
both sustainability reports and media coverage. A longitudinal case study allows the research
to investigate the chosen case deeply for a period of time despite the limited time the researchers
have to conduct the study. When using a case study method, different qualitative methods for
data collection is according to Bryman & Bell (2005), a well-suited approach. Although results
from a case study may not be fully generalizable for the whole industry, they do have important
implications for future research and theory. The aim with the data analysis in this thesis is to be
able to identify concepts and how their importance develops over time, which are not
completely isolated to the H&M case. It can be argued that H&M is a representative case for
large, international fast-fashion companies that can provide this study with analytical
generalizability. Although H&M’s CSR work is in many aspects unique, the understanding of
context and concepts developed in this thesis can be applied to other large, international
companies in the fast fashion industry in the 21st century.
In order to find an answer to our research question How has the focus of the CSR work changed
over time in large, international, fast-fashion companies? content analysis was used as the base
for the methodologic approach. The study period was 2002-2019 and the data used was gathered
from sustainability reports and in addition to those, news articles as well as press releases. In
order to compile the data, coding was used and three higher level themes were found; Social,
Environment, and Transparency.
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4.2 Data Sources
As previously stated, this thesis seeks to analyze data from both sustainability reports and media
coverage. The collection of the two types of data are discussed below.
H&M has currently produced standalone sustainability reports annually from 2002 to 2019.
This signals that during this period of time H&M has put a significant focus on sustainability,
which is a prerequisite for investigating our research question of how the focus has changed
over time. Due to the time constraint of the study, we have used a periodic sample, which allows
the research to cover the whole period. The sustainability reports were gathered from the years;
2002, 2005, 2008, 2011, 2014, 2017, 2019, which is every 2-3 years, since it is a feasible
amount of data for this study, while also providing the study with enough data to show
significant changes over time. To increase validity and reliability, both authors of this thesis
have read all of the reports and media coverage.
In this thesis we are interested in how H&M communicates with all stakeholders and we aim
to answer the research question by gathering data from the sustainability reports of H&M. The
reason for this is that we are interested in how the company itself describes and motivates their
CSR work, and the sustainability reports are the natural place to look for any stakeholder who
is interested in H&M’s CSR work. We have focused on public data since we are interested in
how H&M portray their CSR work, and how it is perceived by other stakeholders. Using
publicly available data and providing our coding scheme, also increases the transparency of our
work, and the replicability of the study (Dubois & Gabbe, 2002).
The media coverage data was gathered from Retriever Research “Mediearkivet”, which is a
tool that creates easy access to a variety of published materials, from both domestic and
international press. The media coverage included four print sources (i.e. Svenska Dagbladet,
Dagens Nyheter, Dagens Industri, and Cisionwire), that were considered suitable for the data
collection since they are well renowned, national, and impartial publications. The timeframe
that was deemed interesting to investigate was 1st of January 2002 until 31st of December 2019.
This timeframe encompasses the timeframe of the sustainability reports, which means that the
data creates a more comprehensive picture of the focus of the CSR work.
21
Initially the news search provided us with 113 117 articles that just had to include H&M. Since
we are interested in studying the articles related to Sustainability and CSR, we chose that the
articles also had to include either the word “hållbarhet” (“sustainability” in Swedish) or CSR.
This left us with 348 articles in the period 2002-01-01 to 2019-12-31. Figure 3a below
illustrates the number of articles per year. From these, duplicates were removed, which left us
with a total of 339 articles.
Figure 3a. In this figure the number of articles per year of the 348 articles studied, is shown.
Figure 3b. Number of articles per year out of the 165 articles studied.
In the media coverage data, all the 339 articles were briefly read through and assigned into
categories, or removed if they did not obviously concern both H&M and their sustainability
work. In total, 165 articles were placed into categories and Figure 3b illustrates the number of
articles per year. If one article corresponded to several categories, it was assigned to all of them.
The categories with less than five articles assigned, were then removed. The assignment of
articles into the rest of the categories is quantitatively shown in, Appendix II.
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4.3 Analytical Approach
As stated above, the data gathered from the sustainability reports was analyzed through
qualitative content analysis. Content analysis is performed by gathering data in the form of text
from for example written reports or diaries and identifying keywords that can be codified into
categories (Bryman & Bell, 2005). According to Abbott & Monsen (1979), the simplest form
of content analysis is analyzing a text and judging whether an event is present or not, providing
only one level of measure. A more complex and diverse analysis can, however, be achieved by
studying several categories and attributes (ibid.). Therefore, in order to achieve a more complex
and diverse analysis we have sought to create as many categories that the data showed us and
from these categories, emergent themes can be identified.
The method we have used is inspired by grounded theory, which is a well-established
qualitative method (Bryman & Bell, 2005, pp. 447-453). Grounded theory is an inspiration for
our approach as it is an iterative abductive method, where data collection and analysis are
performed several times (ibid.; Timmermans & Tavory, 2012). When conducting case studies,
the ability to go back and forth between empirical findings and theory (i.e. using an abductive
approach) is a strength, which allows the researcher to get in-depth knowledge about the case
company (Dubois & Gabbe, 2002). The longitudinal component of the case study further
promotes this in-depth knowledge, since in a longitudinal study the researchers are able to
identify patterns of similarities and changes over time (Mills, Durepos & Wiebe, 2012).
One central part of an approach based on grounded theory is the coding, which consists of going
through the data and marking the parts that could be of theoretical or practical significance.
During this stage, theory, data collection, and coding are performed simultaneously. These
indicators are then translated into concepts that are continuously compared with each other,
clarified and developed into categories. (Bryman & Bell, 2005, p. 450-453)
In qualitative research the aim is to find data that help create analytical, not statistical,
generalizations (Curtis, et. al., 2000). The analysis of the media coverage was done by reading
through a selection of the articles and assigning each to categories. In total, nine categories were
identified. By strategically choosing observations (i.e. articles) that best illustrate changes
within each of the nine categories, a better understanding of the studied phenomenon is obtained
(ibid.). If the selection instead were to be made through a random selection, the observations
23
would be normally distributed and thereby a risk of interesting observations might be deemed
to be outliers, thus not included in the data of this thesis (Morse, 1998).
Reliability of a study means that the data collection method and way that we analyze the
empirics, are done in such a way that it “will yield consistent findings” (Saunders, Lewis &
Thornhill, 2009, p. 156). To ensure reliability of this study we disclose in detail how we have
collected our data, present our operationalization of theory, and in the appendix, we disclose
our coding scheme as well as the coding process (see Appendix III and IV).
4.4 Triangulation of Data
Data triangulation is an important part of qualitative analysis such as that undertaken in this
thesis, that is analyzing how the focus of H&M’s CSR work has changed over time. By
gathering data from multiple sources, a more holistic picture of the development under study is
captured (Saunders, Lewis & Thornhill, 2009, p. 146). The use of multiple independent data
sources or collection techniques serves to control and corroborate the data, by ensuring that it
does not differ significantly between different sources and provide the analysis with different
aspects of the phenomenon, which allows for a deeper analysis (Bryman & Bell, 2005, p. 310).
For the purpose of this thesis, triangulation was achieved by studying both H&M’s
sustainability reports and media coverage of H&M and their CSR work.
H&M states that the sustainability report, “together with our annual report and the information
provided at our web site should mirror our standards on disclosure, audit and accounting
concerning both financial and non-financial information.“ (H&M, 2002b, p. 53). Unlike
internal documents, official documents do not have to reflect the actual behavior of an
organization. Although the documents are not produced with the aim to mislead, different
people and groups within the company may interpret events differently. The documents do,
however, reflect the ideas and opinions that the company wants to communicate and considers
to be of importance (Bryman & Bell, 2005, p. 435). This suggests that, although studying the
sustainability reports is a suitable choice, data triangulation adds to the quality of the study.
Validity of a study means that the findings really are showing the researcher what one thinks
they are showing (Saunders, Lewis & Thornhill, 2009, p. 157). In this study we have achieved
validity through the triangulation of data. This way we can be sure that the conclusions that we
24
have drawn are based on what the data really is showing. Furthermore, both authors of the thesis
have read through all of the sustainability reports. Regarding the news reports, all articles that
could not clearly be assigned to the categories have been discussed by both authors before their
removal.
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5. Empirical Findings
In the following section, we present the findings of our study with the aim of answering the
research question: How has the focus of the CSR work changed over time in large,
international, fast-fashion companies? The empirical findings in the following sections are
from the sustainability reports and the media coverage search, both data types are presented
together. Because of our abductive approach, we have chosen to structure this section after the
themes that grew out of the collected data. We have created a coding scheme in order to get a
better overview of how the coding laid the foundation for the three emergent higher-level
themes: social, environment and transparency. Each of these higher-level themes are then
broken down into sub-themes. The quotes that we refer to in each sub-section, are the building
blocks on which the concepts in the three main categories were constructed. For a full overview
of the themes, see the coding scheme in Appendix III. The observations in this section are then
analyzed according to the operationalization of the conceptual framework in Section 6.
5.1 Social
5.1.1 Profitability
Regarding profitability, the main observation is that H&M considers social sustainability and
profitability to be interlinked.
During the studied period H&M has had a consistent view that sustainability, in some way, is
a part that is needed to maintain good profitability. In the 2008 report H&M also states that:
“Sustainability for H&M covers three areas: People, Planet and Profit.” (H&M, 2008, p. 5).
This view is further deepened in the later report where People, Planet and Profit is referred to
as having provided better and more long-term business opportunities, which is a very desirable
thing to have in a competitive industry like apparel (H&M, 2017, p. 10). In the news articles,
H&M was generally seen as a sustainable investment, and sustainability work has increasingly
become seen as something that is a profitable business strategy.
5.1.2 Government
The data related to government suggests that H&M has changed from mainly aiming to comply
with laws, to view interaction with governments as a way to achieve industry-wide change.
26
In the reports we have found that there has been a large change in the focus regarding how
H&M gets involved in the advancement of legal aspects associated with their company. In the
2005 report it was stated that their goal was to meet the legal requirements of the countries they
were present in (H&M, 2005, p. 15; H&M, 2005, p. 54). However, in 2008 they wrote that they
use lobbying to influence political decisions that have an impact on their business (H&M, 2008,
p. 50). In 2014, there was a lot of focus on fair wages, in particular for the workers in the
production units, with H&M meeting the Prime Minister from both Bangladesh and Cambodia
in order to discuss stronger minimum wage legislation (H&M, 2014, p. 4; H&M, 2014, p. 46).
However, changing legislation is not an easy task for simply one company and H&M stated
that “in many of the production markets in which we operate, poor implementation of
legislation means that fair jobs are not available to all.” (H&M, 2017, p .59). Therefore, another
shift in focus happens in the 2017 report, in which H&M stated that legislation for fair wages
is an industry-wide challenge, that needs a collaboration between other brands as well as
H&M’s own business partners (ibid.). The media coverage also portrayed H&M as a company
that is partnering with government organizations to try to achieve change, through, for example,
promoting stricter regulations.
5.1.3 Supply Chain
Within the supply-chain sub-theme, a division can be made between suppliers’ compliance with
H&M’s code of conduct in general, and H&M’s work for supply chain workers’ rights. On the
first topic, the main finding is that H&M has increased their work on suppliers’ compliance
with their Code of Conduct to the point where they create long-term partnerships with
suppliers. On the second topic, the main finding is that, although the H&M’s work has become
more extensive, scandals have occurred in this area.
Supplier Compliance with H&M’s Code of Conduct
In 2002 the company stated that they try to only cooperate with those that are following the
Code of Conduct (H&M, 2002b, p. 11). However, in the same report it is stated that if a supplier
is not in compliance, H&M have gotten critique for not terminating that contract. H&M defends
this based on their responsibility towards the employees of their suppliers explaining that “the
ones that are truly affected are the workers. Another buyer indifferent to workers’ rights might
then replace H&M.” (H&M, 2002b, p. 40). In 2005 they started auditing their supplier factories,
in order to get better control of non-compliance (H&M, 2005, p. 5)
27
Starting in the report from 2011 and continuing to the latest one, the focus has shifted away
from audits and more towards using their size to enforce their demands for change in the entire
industry. In the 2011 report it was stated that H&M notices a difference in level of sustainable
performance, between new suppliers that were at a lower level and old ones that were at a higher
level (H&M, 2011, p. 28), which H&M stated, proves that they have an influence on, for
example, improving working conditions (H&M, 2011, p. 2). Monitoring or auditing of factories
was no longer enough according to H&M, instead the focus had to be more on strengthening
the suppliers “ownership over their sustainability issues” (H&M, 2011, p. 32).
H&M has also during the studied period increased the aim of having long-term and meaningful
partnerships with their suppliers. H&M stated that both parties would benefit if this kind of
partnership was created, because it creates a security that enables the supplier to: “plan ahead
and invest in improvements in their operations.” (H&M, 2008, p. 15). This long-term approach
was even said to influence the suppliers to work more sustainably in their production, meaning
that this approach was an incentive for the suppliers (H&M, 2014, p. 32).
The extent of the supply chain that H&M considered the company to have influence over was
also broadened during the studied period. From the start they only viewed it as having influence
over their direct suppliers (H&M, 2002b, p. 40). However, in 2008 they stated in their CSR
report that they were looking “further back in the production chain, for example in areas such
as fabric dyeing” (H&M, 2008, p. 3). By using their influence to make those production units
work in a more sustainable way, i.e. H&M has moved from only direct influence to both direct
and indirect influence. For example, they started a program in which these second-tier suppliers
could voluntarily choose to make sustainable improvements to their production (H&M, 2008,
p. 16).
Supply Chain Workers
One example of a concept that H&M has worked continuously with in regards to supply chain
workers is fair wages. In the report from 2005 it is stated that violations of laws concerning
working hours and wages, is something that they have found during their audits (H&M, 2005,
p. 8). In 2008 it is stated in the sustainability report that: “As a buyer, we are in a position to
influence working conditions […] at our suppliers’ operations.” (H&M, 2008, p. 3).
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In 2014, developing the skills of workers as well as educating both them and the suppliers was
brought up as some of the key elements for increased wages for the workers in the factories
(H&M, 2014, p. 10; H&M, 2014, p. 48). And then in the later reports, there was much more
talk about that there was a need for a systemic change in regards to the fair wages: “We believe
that all workers should earn a fair living wage and we are fully committed to this vision.
Consequently, we are improving wage practices factory-by-factory while at the same time
partnering with other brands and trade unions to achieve the systemic changes needed to ensure
fair wages across the industry.” (H&M, 2017, p. 63).
A thorough process of identifying human rights issues was conducted in 2015, involving both
internal workshops and external experts as well as organizations (H&M, 2017, p. 91). And
building on that they stated a mission of “100% Fair & Equal” which concerned both employees
of the H&M Group and in their supply chain (H&M, 2017, p. 56). In the latest report we found
a more long-term and working through dialogue approach, exemplified by the following quote:
“Creating sustainable change within a rapidly evolving industry requires us to combine leading
by example with partnerships and dialogue, so that we can achieve positive impacts in our own
value chain while driving long-term industry wide progress.” (H&M, 2019b, p. 17).
The news articles revealed that H&M has been in some scandals, such as evidence of child
labor and unfair wages in the supply chain, and this was the main focus in the earlier years. In
the later years, while some scandalous reportages still occurred, H&M was often pictured as a
company that does better than other companies in the industry, but that the industry is generally
performing quite badly in ensuring workers’ rights in the supply chain.
5.1.4 Special Interest Groups
The main findings within this sub-theme was that, H&M took on an approach of cooperating
with special interest groups and other initiatives to achieve industry wide change. As opposed
to from the beginning when the main reason for the cooperation with stakeholders was in order
to increase knowledge about how to act sustainably.
H&M stated that “H&M recognizes the need of interacting and having a dialogue with its
various stakeholders” (H&M, 2002b, p. 17), as well as “it is essential for us to understand what
our stakeholders expect from us.” (H&M, 2005, p. 22). In several sustainability reports, H&M
29
therefore let stakeholders such as NGOs and other special interest groups express their
reflection of H&M’s CSR work.
H&M subsequently implemented several of the changes that the stakeholders suggest. One
example of this was that in 2008, H&M received the criticism that “H&M could play a bigger
role in developing a sectoral approach to preventing labor rights violations“ (H&M, 2008, p.
11), while in 2011 H&M stated that they “joined the Fair Wage Network, an initiative that
works to promote fair wages in global supply chains; an ambition that we fully support“ (H&M,
2011, p. 3). In 2014, H&M also stated that they “entered an agreement with the International
Labour Organization (ILO) to work together to strengthen fair negotiations and working
conditions in global garment production.” (H&M, 2014, p. 8).
However, it is important to underline that learning is always a reason for the cooperation (H&M,
2017, p. 13), and that they already in the earlier years did cooperate to achieve industry-wide
change (H&M, 2002b, p. 5). Still, H&M seemed to become more proactive in the cooperation.
For example, in 2014, H&M stated that they were “involved in a number of local and global
industry collaborations, partnerships and multi-stakeholder initiatives” with the aim to
“promote systemic change” (H&M, 2014, p. 12), and they are also described to have a
leadership position by the stakeholders interviewed in the reports (H&M, 2014, p. 92).
Within the stakeholder dimension, the news pieces often talked about H&M and their
cooperation with other companies and NGOs. The collaborations were often described
positively, and in the later years multiple times include H&M receiving prices and making lists
of sustainable companies.
5.1.5 Employees
With regard to employees, the important themes that emerged was H&M’s work for good
working conditions, which was stable in the years, and that employees as a stakeholder become
more important over the years.
The media coverage showed that this was the category where the least amount of change has
happened during the studied period. H&M has been regarded as a responsible employer in all
years. This was consistent with the findings in the reports, which showed a gradually developed
CSR work in regard to the employees such as; agreement with trade unions (H&M, 2005, p.
30
12), the development of a discrimination and equality policy (H&M, 2008, p. 45) and an anti-
harassment policy (H&M, 2011, p. 51), and through making relevant employees sign the Code
of Ethics (H&M, 2014, p. 57).
The media also covered several interviews and alike with people that worked with sustainability
at H&M, and showed that the head of sustainability became a part of the board of directors
early on when the position was created. This was somewhat related to the increased focus on
employees as a stakeholder over time, that was found in the reports. For example, in 2014,
H&M stated that all markets “set individual goals to increase employee satisfaction” which was
“one of the key measurements for each market” (H&M, 2014, p. 59). H&M also stated that they
viewed CSR work as a way to achieve employee satisfaction (H&M, 2008, p. 5).
5.1.6 Customers
The main findings regarding customers are related to ads, which is an area that H&M has
experiences some scandals, and that H&M increasingly care about the data integrity of their
customers.
H&M stated that “advertising photos do not aim to convey a specific ideal” (H&M, 2002b, p.
68), and “when trends move towards unhealthiness, we should not follow them in our
communication” (H&M, 2005, p. 58), as well as “the policy has been updated in 2008 and now
additionally highlights that H&M distances itself from working with notably underweight
models.” (H&M, 2008, p. 42). This indicated that H&M viewed it as a way to take responsibility
in their communication with customers.
H&M stated that “be perceived in a positive, diverse and inspiring way without offending
anyone.” (H&M, 2008, p. 42), despite these two scandals related to advertisements were
mentioned in the reports. One was regarding a look that could remind of female Peshmerga
fighters (H&M, 2014, p. 67), and another one was a “children's sweater on hm.com that was
deemed by many as racist.” (H&M, 2017, p. 69).
In the later years, and especially through the Monki brand, H&M tried to make controversial
social statements, for example through collaborating with “the first LGBTQ+ online magazine
in Russia” (H&M, 2019b, p. 73). In 2017, they also released the #NoFilter campaign – a
campaign featuring completely unretouched bodies. This swimwear and underwear campaign
31
represented the H&M group’s fundamental belief in celebrating diversity and inclusiveness as
well as Monki’s mission “to make girls feel great about themselves just the way they are.”
(H&M, 2017, p. 71).
We found that, H&M as a retailer also stored large amounts of data on their customers. The
aspects of integrity and possible data breaches is first mentioned in the 2011 report, and it was
said that “many stakeholders are increasingly concerned about data security risks” (H&M,
2011, p. 53). At that point in time, the approach to data integrity was mainly of the legal
character (ibid.). This is a big difference compared to 2019, when they began “assessing human
rights issues linked to data protection and privacy” (H&M, 2019b, p. 62) and develop a
Responsible AI Checklist which “ensures ethical questions are answered as we scale and
stabilise new applications” (H&M, 2019b, p. 18).
5.1.7 Communities
The main finding in the data on communities shows that H&M focus on communities in all
years, however the ambition and monetary value of their projects have increased dramatically
over the years.
We found that H&M focused on communities in both their sales markets and in their sourcing
markets all of the studied years. This work was, for example, done through donating clothes to
charity (H&M, 2011, p. 86) and working with partners when “community issues are beyond
our direct operations and our influence is weaker” (H&M, 2014, p. 104).
Mainly, H&M stated that they invest “in projects that benefit communities and at the same time
address issues that are important to our business” (H&M, 2011, p. 80) since “in order to secure
our long-term profitability and growth, we need to ensure the communities that contribute to
our success benefit from our presence.” (H&M, 2014, p. 104). One example of this was “a
project with social entrepreneurs — enabling small-scale enterprises to supply products to
H&M Group customers, while contributing to positive change within their own communities”
(H&M, 2019b, p. 18).
The biggest difference over the years regarding the contribution to communities could be seen
in the monetary value of contributions to communities. This was much due to the H&M
Conscious Foundation, later renamed H&M Foundation, that is technically not a part of H&M,
32
but owned by the Stefan Person family. While the sponsored projects in 2002 vary from £8.000
to 1,5 million SEK (H&M, 2002b, p. 57), the total value of pledged donations by the H&M
Conscious Foundation in 2014 was over 287 million SEK (H&M, 2014, p. 109).
5.2 Environment
5.2.1 Profitability
Within the profitability sub-theme, it was clear that H&M always viewed profitability and
environmental work to be interlinked. A slight shift in motivation can, however, be seen, since
in the earlier years, the main argument for environmental work is that it reduced costs, while
in the later year the motivation shifts more toward that environmental work increases revenue.
From the beginning, H&M recognized that their profitability and environmental responsibility
were interlinked. H&M stated that they “also believe that good relations with the world around
and long-term profitability depend on H&M taking responsibility for how people and the
environment are affected by our activities.” (H&M, 2002b, p. 6).
The main reason for the relationship between profitability and sustainability in the early years,
however, seemed to be because it “goes hand in hand with the Company values and encourages
resource efficiency, which suits a cost-conscious company well.” (H&M, 2008, p. 4). Examples
of this was that “increased use of renewable fuels and cleaner energy solutions can also lead to
lower costs for the company.” (H&M, 2008, p. 32), decreased pesticide use “which increases
our profits and is better for our health and our environment.” (H&M, 2011, p. 13), and that
clothes were rarely recycled which “represents a lost opportunity of more than USD 100 billion
every year.” (H&M, 2017, p. 30).
But H&M also seemed to adhere to the idea of the triple bottom line and acknowledged it
already in their 2011 report “People, Planet and Profit [...] cannot be treated separately. They
are deeply interconnected.” (H&M, 2008, p. 5). Thus, it can be seen that H&M, already from
an early time, thought that environmental work both reduced costs and increased revenue.
Therefore, H&M was also ready to invest in their environmental work and were “prepared to
sacrifice short-term profits for long-term success.” (H&M, 2014, p. 5).
33
As mentioned in Section 5.1.1, the media analysis showed that H&M was generally seen as a
sustainable investment, and sustainability work was increasingly seen as something that was a
profitable business strategy.
5.2.2 Government
Regarding government, the main take-away from the findings is that H&M consistently comply
with regulations, and that they increasingly lobby for stricter regulations.
H&M stated that they always aim to follow the legislation of different countries. (H&M, 2002b,
p. 23). They also monitored that their suppliers follow the law, in countries where compliance
with laws were low (H&M, 2005, p. 66). We also found that they lobby for stricter legislation
when needed, which was confirmed by the media analysis. For example, this was done
regarding transport emissions (H&M, 2011, p. 58) and about increased availability of renewable
energy in developing countries (H&M, 2017, p. 50).
5.2.3 Supply Chain
Regarding supply chain, the main concept is that H&M encourages suppliers to be more
environmentally friendly, first by informing the suppliers of the potential positive consequences,
and then by setting concrete goals.
The focus in the supply chain on environmental aspects of H&M was from the beginning more
on motivating the suppliers to use more sustainable materials by informing them about the
financial benefits that come from those materials. In the reports from 2002 and 2005 it was very
clear that H&M had relatively low standards or goals for their suppliers, mostly concentrated
on what was legally required in the country of production. From 2008 the focus became more
on the good impact on the environment that sustainable production has (H&M, 2008, p. 30).
In the later years, it was found that H&M takes more initiative to create environmentally good
change in the supply chain. For example, in 2014 the suppliers were required to implement
measurement tools for their water usage (H&M, 2014, p. 95). And in the latest report, from
2019, it was further explained that H&M takes a whole value chain approach to reducing their
impact on the environment (H&M, 2019b, p. 29).
34
5.2.4 Special Interest Groups
In regard to special interest groups, the interesting findings are that H&M cooperated with
them during all years, however the aim of the cooperation has gone from mainly being a way
of learning, to being a way of achieving industry-wide change, and being a leader in the field.
H&M has cooperated with many organizations throughout the years. This includes several
memberships in organizations, and participation in ratings (H&M, 2005, p. 20-21). One aim of
the cooperation, that seemed to be present especially in the earlier years, was to learn from
organizations by for example applying their standards or discussing how they could improve
their CSR work. One example of this was in their first report, as mentioned in Section 5.1.4,
where H&M stated in the beginning of the stakeholder section that “Every day we learn more
about CSR-issues and concerns in our meetings with our stakeholders and in other forum”
(H&M, 2002b, p. 17).
Although the tendency was present in all the years, the cooperation over time seemed to be
more aimed at achieving industry-wide change, which is similar to the social dimension. One
of the main organizations that H&M cooperated with and finance in the environmental field
was the Better Cotton Initiative that aimed to “define, develop and encourage the adoption of
practical, performance-based standards for cotton cultivation on a global scale” where H&M
already in 2005 “took an active role in the group as member of the Steering Committee” (H&M,
2005, p. 69). The cooperation was seen as a way for H&M to affect the parts of the supply chain
that they do not have direct influence over (H&M, 2008, p. 2). The same strategy can be seen
in other co-operations as well, such as the “CEO Water Mandate, a voluntary initiative that
requires us to improve and report both our own and our suppliers’ water efficiency and the
quality of discharged wastewater.” (H&M, 2008, p. 28).
The stakeholders interviewed in the CSR reports were often impressed by H&M’s
environmental work (e.g. H&M, 2011, p. 16) which can be interpreted as H&M over time
increasing their fulfillment of the ethical dimension for stakeholders
Similar to the social dimension, the media coverage often talked about H&M and their
cooperation with other companies and NGOs. The collaborations were often described
35
positively, and in the later years multiple times include H&M receiving prices and making lists
of sustainable companies.
5.2.5 Customers
The most interesting findings regarding customers is that H&M throughout the years try to
affect their behavior in order to make them act more environmentally friendly.
Early on, H&M started to try to affect consumer behavior to be more environmentally friendly.
One example was through the information they provide about washing, which is one of the
main energy-consuming steps in the life-cycle of garments. “We also aim to make it easier for
customers to save energy when using the products, they have bought from us. On the customer
service pages of our corporate website we recommend lowering washing temperatures to save
energy and provide further information on how our customers can handle our garments in order
to reduce the impact on the environment.” (H&M, 2008, p. 35). In 2014, they also attached
Clevercare’s recommendations of environmentally friendly laundry instructions to all garments
sold by all H&M brands (H&M, 2014, p. 24).
In 2013, H&M stated that “built what is probably the world’s biggest retail garment collecting
system, offering millions of customers easy solutions to not let fashion go to waste at all our
own H&M (brand) stores globally” (H&M, 2014, p. 24), which was also dependent on
consumers making a change in their behavior in order to support H&M and the environment.
This was later done with beauty containers in & Other Stories from 2017 (H&M, 2017, p. 25).
In order to prolong the garment use, H&M has also worked with increasing the customer’s
attachment to the clothes and helping repair clothes that have been thoroughly used. For
example, Weekday provides jeans made on-demand “which will reduce waste and ensure
longevity by providing customers with custom-made products” (H&M, 2019b, p. 38) and
H&M’s Take Care concept, which piloted in 2017, “provide customers with guidance and
inspiration as well as services and products to help refresh, repair and remake their clothes.”
(H&M, 2017, p. 43).
The news articles confirmed the increased focus on involving customers, for example through
letting them vote on who should win money in the Changemaker competition by H&M
36
Foundation. They also appeal to customers to adjust their behavior to support environmental
change, and help them through e.g. labelling extra sustainable clothes.
5.2.6 Communities
H&M’s contribution to communities within the environmental dimension consists of achieving
industry-wide change through trying and investing in new, innovative ideas, creating demand
for environmentally friendly materials and in other ways promoting the environment, which
resulted in H&M getting a leadership position in the field very early, and maintaining it through
the years.
H&M always considered the scope of their environmental impact to go beyond their own
operations, exemplified by this quote from a sustainability report: “At H&M, we recognize that
our climate responsibility extends not only to our direct emissions and those of our energy
providers, but also to those emissions that are created in the manufacturing and distribution of
the goods that we sell.” (H&M, 2011, p. 62). The sustainability work, however, increased in
the sense that more and more areas of the business were included. For example, this includes
biodegradable consumer plastic bags (H&M, 2005, p. 75) and recycled furnishing in the stores.
(H&M, 2019b, p. 48)
H&M continuously used their position as a large, international company to create change in the
industry. For example, they described as early as 2011 that “as a leading actor with a well
reputed approach to chemicals management, H&M has the size and ability to encourage change
within the industry.” (H&M, 2011, p. 16).
H&M also tried to achieve change in the industry through creating economic demand for
change. In 2008, H&M stated that by ”creating demand for more organic cotton we can help
create an incentive for more growers to shift to organic cultivation.” (H&M, 2008, p. 32). The
cotton industry is an area in which this behavior is unprecedented. One example of this was that
in 2011 they were “using more organic cotton than any other company in the world.” (H&M,
2011, p. 2).
In the later years, when H&M had implemented much of the available new techniques and
innovations that were environmentally friendly, they worked increasingly with science and
innovations to lead the industry towards new solutions. For example, they stated that “working
37
with innovators and scientists, we are positive that we can overcome the challenges on the way
towards a closed loop.” (H&M, 2014, p. 84).
This was mostly done through H&M CO:LAB that invests in businesses “in three areas:
sustainable fashion – that develop the technologies the industry needs to become fully circular
and sustainable, innovative business models – companies that explore how consumers will shop
fashion in the future and enablers – companies that provide technology and solutions that makes
us better.” (H&M, 2017, p. 19).
H&M’s environmental innovations included, amongst others, the Organic Cotton Accelerator
which “exists to remove roadblocks and accelerate the growth of the organic cotton market,
(H&M, 2017, p. 36) and one example of a collaboration is Danone AQUA which “collects and
recycles plastic waste which is then sent to H&M group suppliers where it is turned into
recycled polyester, made into products and sold in H&M stores.” (H&M, 2017, p. 35).
In 2015, the H&M Foundation, which is owned by the Stefan Persson family, initiated The
Global Change Award which “is one of the world’s biggest challenges for early stage
innovation, calling for ideas that will help protect the planet by accelerating the shift from a
linear to a circular fashion industry.” (H&M, 2017, p. 20). The solutions developed within this
will also “be licensed widely to ensure broad industry access and maximum impact” (H&M,
2017, p. 35) since ”H&M Foundation want their work to benefit as much of the environment
and as many people and communities as possible” (ibid.).
Another part of being innovative is also to come up with new business models. This included
investing in “Swedish web-based re-sell platform Sellpy” (H&M, 2019b, p. 19), “COS
partnered with market-leading platform Ycloset in China, offering subscriptions to rent clothes
rather than buying new” (H&M, 2019b, p. 50) and trying new ideas such as “in-store swapping
events and flea markets (Monki and Weekday), and in-store activities to highlight pre-loved
items (& Other Stories, Afound, H&M).” (ibid.).
The news pieces confirmed the picture provided by the reports, focusing on innovation showing
an increase in both investments and collaborations regarding sustainability, for example
through H&M Foundation’s Changemaker competition, and the development and usage of new
materials such as plastic from the sea.
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Furthermore, the environmental ambitions increased every year. As previously mentioned in
Section 2.3.2, H&M in the later years aimed to “lead the change”. One example of this in the
environmental area was that H&M has gone from focusing on “reduction of our carbon dioxide
emissions” in 2008 (H&M, 2008, p. 73) and “sourcing 100% renewable electricity wherever it
is credibly available and technically feasible in 2014 (H&M, 2014, p. 73) to aim to “achieving
a climate positive value chain by 2040” in 2017 (H&M, 2017, p. 7).
The media coverage of H&M’s focus on the environment has increased significantly over the
years. The data shows that H&M has taken a larger responsibility for their environmental
impact through initiatives in; recycling, renting, and sustainable materials. As well as
committing to more long-term goals for a better environment through for example sustainable
cotton production.
5.3 Transparency
5.3.1 Government
The main observations regarding government is that H&M comply with laws in all years, and
that they encourage stronger regulations in the transparency area.
When it comes to transparency in the form of legislation within the garment industry, what was
found in the reports were mostly about correct labelling of the clothing. In the 2005 report it
was stated that since 2002 H&M has “in accordance with American legislation, all garments
are labelled with country of origin information.” (H&M, 2005, p. 57). Another attempt to
deepen the transparency of the labelling was presented in the 2011 report, where H&M looked
into one of their t-shirts and “evaluated the total water use, CO2e emissions and eutrophication
impacts throughout its life cycle, from growing the cotton to the disposal or recycling of the
garment.” (H&M, 2011, p. 22). The aim with this project was to “help the development of
standards for transparent product impact disclosure within the EU, as well as helping us to
improve our own performance.” (ibid.) and thereby start the process of creating an international
legislative framework that makes it easier to get the information of environmental impact of
garments. As previously stated, the analyzed articles in this category portrayed H&M as a
company that partnered with government organizations to try to achieve change, through, for
example, promoting stricter regulations.
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5.3.2 Supply Chain
Regarding supply chain, and within the transparency dimension in general, the biggest change
by H&M was made when they published their full supplier list in 2013.
H&M has over the years tried to increase the trust between themselves and their suppliers,
which has increased the transparency since their own records are increasingly correct (H&M,
2008, p. 24). The biggest change in the transparency development happened in 2013 when
H&M became one of the first companies in the industry to publish their supplier list, as a step
towards greater transparency in the supply chain (H&M, 2014, p. 5; H&M, 2014, p. 37).
5.3.3 Special Interest Groups
Regarding special interest groups, the main observation is the extent to which H&M has
adapted to their wishes and demands, and gone from being considered as a company that has
major transparency issues, to being a company that is industry-leading in the field.
In the beginning of the studied period H&M had a section of their reports where different
stakeholders, e.g. NGOs, could express their thoughts on what was good and needed to be
improved in the reports, and the company took these thoughts and adjusted in the next report
(H&M, 2005, p. 5). This shows that they tried to listen to these stakeholders and incorporate
their interests in future CSR work and reports. An example of this is that H&M published their
list of suppliers after different stakeholder groups had expressed a need for that. From 2014,
the collaborations with different NGOs in order to create industry wide measurements started
coming into greater focus (H&M, 2014, p. 25; H&M, 2017, p. 23; H&M, 2019b, p. 21). In the
2017 report, an illustration shows that the aspects that stakeholders asked for the most
frequently, are the aspects of CSR that H&M report on in greater detail (H&M, 2017, p. 90).
Although, the company still had a handful of CSR aspects that were requested from the
stakeholders but the company did not report on at all (ibid.).
Another aspect of transparency in the early years that the special interest groups representatives
wished for was having an external party perform an assurance of the report, which at this point
in time was not done, and H&M goes on to explain that they prefer spending those resources
on improving their CSR work, rather than external assurance (H&M, 2005, p. 77). However,
from 2011 (H&M, 2011, p.11) and onwards, this is done.
40
Transparency was seldom referred to in the earlier years in the media coverage, however in the
later years, H&M was most often seen as a good example of a transparent company. Within the
stakeholder dimension, however, the news pieces often talked about H&M and their
cooperation with other companies and NGOs. The collaborations were often described
positively, and in the later years multiple times include H&M receiving prizes and making lists
of sustainable companies.
5.3.4 Customers
In regard to customer transparency, the main finding is that a big change can be seen, since
H&M has gone from not focusing on it at all, to being a driving force in the field.
Customer transparency was first written about in the 2011 report, by stating that customers need
to be informed and educated about how H&M work with sustainability (H&M, 2011, p. 18).
However, the information at that time was difficult for the customers to understand, and
therefore, H&M aimed towards creating an index to make it easier to comprehend (H&M, 2011,
p. 21) which would be beneficial both for H&M and their customers in order to make well
informed choices (H&M, 2014, p. 3).
H&M continuously emphasized the importance of a clear and “simple indication of a product’s
sustainability” and the need for an industry wide effort through “common sustainability
measurement and index” to “enabling informed customer choice” (H&M, 2019b p. 20). In the
earlier years, this was done by labelling clothing with their production country (H&M, 2005, p.
57) and labelling particularly sustainable clothes (H&M, 2011, p. 22), the latter which was also
shown by the media analysis. One of the biggest changes however, was in 2017, when the
ARKET website introduced a new sorting option with the possibility to shop by country of
origin (H&M, 2017, p. 22).
5.4 Summary
This section has gone through the findings generated by inductively looking at the data material.
The findings have been categorized into the three main dimensions: social, environmental and
transparency. Within each dimension, a number of sub-categories have been presented, some
of which are similar between the dimensions (e.g. government, supply chain, customers and
41
special interest groups) and some of which differ (e.g. profitability, employees and
communities). In all dimensions, an increased ambition by complying with stakeholder
expectations and achieving industry-wide change H&M can be seen, and this is generally
achieved through learning from and collaborating with governments, supply chain, and special
interest groups, as well as by incorporating and encouraging customers in different ways. Some
differences can however be seen. In the social dimension, H&M’s main focus has been on
strengthening the relationships with suppliers and their internal control. In the environmental
dimension, H&M has more clearly incorporated the environmental value in their business
strategy, and taken a industry-leading position earlier. In the transparency dimension, however,
H&M has focused more on gaining stakeholder trust. The results presented in this section are
further looked at more deductively with the help of the conceptual framework in the next
section.
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6. Analysis
In this section we present our analysis of the empirical findings. By applying and contrasting
the findings of this study to the findings of previous research as well as the conceptual
framework, we seek to find an answer to our research question: How has the focus of the CSR
work changed over time in large, international, fast-fashion companies? The structure of the
analysis is based on Table 1 below, which was previously described in Section 2.5 -
Operationalization of Conceptual Framework, as an attempt to more easily bridge theory and
practice. That is why the structure of the analysis is based on Carroll’s (1979) CSR pyramid
instead of the CSR dimensions that were used in Section 5 - Empirical Findings.
Table 1.
Environment Social Transparency
Philanthropic Unexpected environmental
initiatives, e.g. leading change
Unexpected social initiatives, e.g. leading
change
Unexpected transparency initiatives, e.g. leading
change
Ethical Expected environmental initiatives, e.g. certifications
Expected social initiatives, e.g. certifications
Expected transparency initiatives, e.g. certifications
Legal Following environmental laws Following social laws Following transparency
laws
Economic
Economically driven environmental initiatives and motivations, e.g. save energy
costs, sales
Economically driven social initiatives, e.g.
to avoid sanctions
Economically driven transparency initiatives, e.g. to avoid sanctions
This table shows how we have operationalized the conceptual framework.
6.1 Economic
The economic responsibilities is “the foundation upon which all others rest” (Carroll, 1991, p.
42), and making profit is essential for growth, and hence for all stakeholders (Carroll, 2016)
and is considered a legitimate aim by companies in a capitalistic society (ibid.). It might
therefore not come as a surprise that the economic level of the pyramid is fulfilled in all years.
The economic responsibilities were the most present within the environmental dimension of
H&M’s CSR work. One example of this was that H&M considered environmental work to be
interlinked to resource efficiency (e.g. H&M, 2008, p. 4; H&M, 2017, p. 30), which is an
43
important factor in the economic responsibilities (Carroll, 1991, p. 40). H&M also repeatedly
brings up their ambition of providing long-term profitability and maintaining a strong
competitive position (e.g. H&M, 2002b, p. 6; H&M, 2014, p. 5), which are also clear signs of
the economic responsibilities (Carroll, 1991, p. 40). The media analysis also confirms that
H&M is seen as a profit-seeking, listed company, which strengthens the conclusion that the
economic responsibilities are fulfilled.
It should be considered that the CSR reports do not disclose H&M’s full focus on economic
responsibilities, unlike reports such as the annual report, but only the ones related to
sustainability. The reason the economic level is brought up in the sustainability reports would
only be if the company perceived there to be either a conflict or a symbiosis between the
economic responsibilities and the CSR work. The general tendency of the CSR work is,
however, that it is both motivated by economic gains, as well as ethical or legal fulfilment. This
way of multiple motivations is normal according to Carroll and Schwartz (2003). For H&M
this is illustrated by quotes such as “People, Planet and Profit [...] cannot be treated separately.
They are deeply interconnected.” (H&M, 2008, p. 5). H&M’s view of profitability is also in
line with previous research, since the phrase “people, planet and profit” also known as the triple
bottom line was coined by John Elkington, who argues that companies need to take all three
concepts into account and disclose information about them, that is what gives a complete and
honest picture of the company (Grankvist, 2009; Elkington, 1999; Elkington, 2013).
6.2 Legal
Legal responsibilities consist of a mixture of laws and regulations that businesses have to follow
(Carroll, 1991) in order to function as a fair business in relation to all their different stakeholders
in society (Carroll, 2016). The findings of this study indicate that there has been a shift in the
focus of how H&M works with their CSR, from a legislative perspective within all fields (i.e.
social, environment, transparency). In the start of the studied period the findings show that
within all three dimensions; the focus was on simply meeting the legal requirements of the
countries they operate in (e.g. H&M, 2002b, p. 23; H&M, 2005, p. 15; H&M, 2005, p. 54)
which according to Carroll (2016), is a fundamental part of CSR. This is also in line with
previous research which suggests that CSR is mainly of the voluntary kind (Grafström,
Göthberg & Windell, 2015, p. 90-94).
44
Within the social dimension, the findings show that H&M shifted their focus towards creating
an industry wide change within legislation (e.g. H&M, 2017, p .59). Within the environmental
dimension the findings were along the same line, showing that H&M more increasingly over
the years started to lobby for more strict environmental legislation (e.g. H&M, 2017, p. 50).
The transparency dimension stands out a bit in the findings because the shift towards wanting
to create more extensive laws on transparency was found to occur a few years earlier than within
the two other dimensions (e.g. H&M, 2011, p. 22). These are interesting findings because over
the years they shifted to an approach where the company uses their status as a large actor in
these developing countries to influence and lobby for better legislation. This could be an
indication of a change in H&M’s perception of the law, Carroll (2016) argues that laws are
“codified ethics” and according to Grafström, Göthberg & Windell (2015), there is a
bidirectional relationship between stakeholders and the company. Indicating that lobbying can
be an action from H&M that signals that they want to create positive changes for their
stakeholders (e.g. the suppliers and their factory workers), and uses lobbying for better legal
working conditions. In and of itself, it can also be an indication that the levels of the CSR
pyramid are in constant tension (Carroll, 1991) with one another and that is what has spurred
this change in H&M.
According to Elkington (1999; 2013) companies need to take social responsibility and increase
their social capital, otherwise it can have a devastating effect on and even affect other parts of
their CSR work. This newer tendency for H&M to try and influence lawmakers could be
because they have come under more scrutiny from media and other stakeholder groups, and are
therefore through lobbying trying to, in line with Elkington (1999), increase their social capital.
The legal and ethical levels are deeply interconnected; therefore, the ethical perspective could
be what has a very strong influence on H&M in regards to their legislative lobbying.
6.3 Ethical
The ethical responsibilities “embody those standards, norms, or expectations that reflect a
concern for what customers, employees, shareholders, and the community regard as; fair, just,
or in keeping with the respect or protection of stakeholders’ moral rights” (Carroll, 1991, p.
41). One problem with adjusting to, and assessing the compliance with, the ethical
responsibilities is that ethics and values change fast and are often under debate, and that when
broad acceptance is reached, the value is usually incorporated into the law (ibid).
45
In the case of H&M, the difference between what is expected CSR work and what is not differs
substantially between different stakeholders, which is in line with the expectations of
stakeholder theory (Freeman, Harrison & Wicks, 2007; Grafström, Göthberg & Windell, 2015).
H&M seems to prioritize demands from the special interest groups, although these have the
highest demands. A reason for this could be the tendency of special interest groups to exercise
power through the media and through affecting legislation (Grafström, Göthberg & Windell,
2015, p. 76).
While H&M does generally not live up to the special interest groups’ expectations in the earlier
years, H&M continuously engages with these and adjusts to their expectations, which results in
them fulfilling, and even going beyond the other stakeholders’ expectations over time. This can
be seen as a transition from being reactive in the CSR work, to being proactive. This transition
is seen repeatedly in H&M’s reports and especially evident within the social dimension
(regarding e.g. supply chain workers’ rights) and transparency dimension (regarding, e.g.
external assurance of the report and availability of data). Within the environmental dimension,
the same trend can be seen, although H&M seems to be more proactive within the field even
from the earlier years.
Within the social dimension, however, the fulfillment of the ethical level seems to vary
substantially between the different stakeholders’ expectations. For example, neither the reports
nor the media analysis gives us a reason to doubt that the expectations of employees are not
fulfilled even in the earlier years. Regarding integrity, however, H&M is in 2011 focusing on
complying with laws although “many stakeholders are increasingly concerned about data
security risks” (H&M, 2011, p. 53), which suggests that H&M does not necessarily live up to
the expectations, although this is neither confirmed nor denied by the media coverage.
The media analysis also shows that H&M has been in some scandals related to supply chain
workers’ rights. The media coverage, as well as the CSR reports, also portrays H&M as a
company that does a lot of good in their supply chain, despite it not being perfect. This suggests
that the ethical expectations are not always fulfilled by H&M, although they make efforts to
adjust to the expectations of stakeholders, and mostly achieve a successful outcome.
46
The sustainability reports also mention scandals regarding their clothes and
advertisements. H&M state that the lack of compliance with the expectations was unintentional
and express their apologies of their wrong-doing (H&M, 2014, p. 67; H&M, 2017, p. 69).
However, it can be argued that this type of scandals could occur because of the dynamic
expectations of companies, that is distinctive for the ethical dimension (Carroll, 1991). For
example, regarding the outfit linked to Peshmerga, H&M state that the “design for this product
was developed long before the developments that led to broad media attention on the
Peshmerga” (H&M, 2014, p. 67), which is an example of that it can be difficult to companies
to keep up with expectations.
It is not surprising that customers have been an important stakeholder group for H&M during
the studied period. And that efforts have been made in all three dimensions in order to for
example increase the transparency regarding the company's CSR work (e.g. H&M, 2011, p.
22). As well as creating awareness through different campaigns (e.g. H&M, 2019b, p. 73). In
line with previous research, this would indicate that H&M has worked to increase trust in their
relationship with their customers (Schnackenberg & Tomlinson, 2016), H&M has also
attempted to give the customers access to as much information about products (e.g. how they
are made and where) which according to Augustine (2012), also increases transparency. And
from the media analysis there are signs of H&M more frequently being held accountable or at
least scrutinized, from a customer perspective. Which is in line with Schnackenberg &
Tomlinson (2016), who claim that a higher level of transparency leads to an increase in
accountability and responsibility in regards to stakeholders.
Although H&M did consider themselves to be responsible towards society in the earlier years,
the scope and ambition of their CSR work has dramatically increased. H&M manifest a clear
perception of being increasingly responsible towards more stakeholders, for example towards
stakeholders further back in the supply chain. They also display an increased sense of
responsibility through assigning more people to sustainability work and through integrating
sustainability goals and actions into all employees’ work and goals. H&M’s definitions of CSR
and sustainability also reveal that they have gone from being more self-interest oriented through
simply meeting or exceeding “expectations that society has of business” (H&M, 2002b, p. 6;
H&M, 2005, p. 7) to fulfilling the needs of “present and future generations” (H&M, 2008, p.
6). Overall, H&M increased their sense of responsibility, and went from portraying a more
shareholder-oriented to a more stakeholder-oriented approach.
47
6.4 Philanthropic
The last level includes active participation or contributing financial or human resources to
“improve the quality of life” in communities (Carroll, 1991, p. 42). The main characteristic of
this level is that the actions are voluntary or discretionary and based on a “want to do what is
right for society” (Carroll, 2016, p. 4). Although this is often done with the aims to “enhance
or augment the company’s reputation” (Carroll, 2016, p. 4), the philanthropic level of CSR
action is not expected by the public, however it is appreciated (Carroll, 1991).
In all years, H&M “contribute resources to the community” to “improve quality of life”, which
is what the philanthropic level of the pyramid is fundamentally about (Carroll, 1991, p. 42). In
regard to the social dimension, the monetary contributions drastically increase over the years,
as described in Section 5.1.7, which ameliorates the relationship between the business and
society, which the social dimension can be described as (Dahlsrud, 2008). Furthermore, actions
described in Section 5.1.3, such as educating supply chain workers about their rights and
providing them with better salaries and working conditions, can be viewed as philanthropic
actions, since they are not expected by the factory workers. This reflects that they increasingly
go beyond the public's expectations and fulfil the philanthropic level within the social
dimension, although the tendency is present in all years.
The contribution to communities can also be assessed in the environmental dimension. Here,
the contribution can be seen in H&M’s increasing strive to innovate and create demand for
environmentally friendly materials, as described in Section 5.2.6. The fulfillment of the
philanthropic level within the environmental dimension is mainly fulfilled from 2011 onwards,
since this is when their strive to contribute to innovation started.
Within the transparency dimension, H&M is also increasingly determined to go further than its
expectations and competitors. One example is that H&M is seen as a leader both by the
stakeholders in the sustainability reports as well as in the media coverage, and it is only through
disclosing the development that other stakeholders can get recognition for their CSR work
(Dubbink, Graafland & Liedekerke, 2008). The fulfillment of the philanthropic level within the
transparency dimension increases over the years, but can be considered as getting its real start
in 2013, when H&M became one of the first companies in the industry to publish their supplier
list (H&M, 2014, p. 5; H&M, 2014, p. 37).
48
Furthermore, H&M’s sustainability vision has also gone from focusing on “upholding” human
rights and “contributing” to a sustainable development to integrating it into all operations and
to “lead the change” as described in Section 3.2.2, and is in the later years viewed by
stakeholders in the sustainability reports and in the media coverage as a company that goes
beyond the common expectations. This applies to all dimensions and reflects a gradual increase
in behavior of the philanthropic level.
6.5 General Analysis
In the economic level, it can be concluded that H&M bring up its economic responsibilities
both in the social, environmental field, and that this tendency is stable throughout the years.
H&M view their CSR work as a whole as a way to create a competitive advantage and long-
term profitability. Therefore, it can be concluded that the economic responsibilities in all three
dimensions are fulfilled, which is in line with the theory that means that the economic level is
“the foundation upon which all others rest” (Carroll, 1991, p. 42), and that H&M considers
economic gain to be closely related to sustainability work of other levels of the pyramid, which
is in line with the findings of Carroll and Schwartz (2003) and John Elkington (Grankvist,
2009).
In the legal level, H&M has gone from obeying the law in the beginning of the studied period
towards using lobbying in an increasing amount, to achieve better legislation regarding for
example working conditions. This development is supported by previous research and theory;
laws are “codified ethics” that change over time (Carroll, 2016), companies have to take social
responsibility in order to increase their social capital (Elkington, 1999), and the company-
stakeholder is a bidirectional relationship (Grafström, Göthberg & Windell, 2015).
In the ethical level, H&M’s work was inadequate in the first years, but improves over time and
is first fulfilled within the environmental dimension, and then within the transparency
dimension. Although some breaches of stakeholder expectations do occur in the social
dimension, the ethical dimension is also generally and increasingly fulfilled over the years. It
is however important to remember that special interest groups often have more far-reaching
demands than the general public, but have the ability to create scandals by acting through media
(Grafström, Göthberg & Windell, 2015, p. 76), and it is therefore possible that H&M fulfills
49
the expectations of other stakeholders even in the earlier years, such as for example employees.
The analysis also confirms that the expectations of companies’ CSR work have increased over
time, as previous research has put forward earlier (Grafström, Göthberg & Windell, 2015, p.
17-18).
In the philanthropic level, although there are elements of philanthropic behavior present in all
years, a general tendency is that H&M go from doing more of what’s expected, or sometimes
under-performing in relation to what’s expected, to gaining stakeholder trust and becoming a
leader in the industry in social, environmental as well as transparency work. Within the social
dimension this is rather even between the years, and the philanthropic level is weakly fulfilled
even from the earliest years. Within the environmental dimension, a significant change can be
seen from 2011, when H&M starts focusing more on innovation. In the transparency dimension,
the most significant change is in 2013, when they published a list of all suppliers.
Overall, the analysis shows a gradual increase of H&M’s CSR work within all of the
dimensions. In general, the findings are in line with theory and earlier research and the data
from the CSR reports and the media coverage corroborate the findings. The results of the
analysis is summarized in Table 3 below.
Table 3.
Environment Social Transparency
Philanthropic Increasingly fulfilled, especially from 2011 Increasingly fulfilled Increasingly fulfilled,
especially from 2013
Ethical Increasingly fulfilled, first of the dimensions
to be fulfilled
Increasingly fulfilled, some breaches, variations between stakeholders’ perspectives
Increasingly fulfilled, second of the dimensions
to be fulfilled
Legal Fulfilled in all years Fulfilled in all years Fulfilled in all years
Economic Fulfilled in all years Fulfilled in all years Fulfilled in all years In this table we have made a summary of the fulfillment of the level of the pyramid.
50
7. Conclusions
In this section we present the conclusions that can been drawn based on the analysis of our
empirical study of how the focus of the CSR work has changed over time, in large, international,
fast-fashion companies.
The purpose of this study was to analyze how sustainability work in the fast fashion industry
has developed during the period 2002-2019. In order to answer the research question How has
the focus of the CSR work changed over time in large, international, fast-fashion companies?
a content analysis of H&M’s sustainability reports and media coverage from the time period
has been performed.
To describe the evolution of H&M’s focus on sustainability work over time, stakeholder theory
and Archie B. Carroll’s CSR pyramid within the three dimensions social, environment and
transparency was used.
The analysis shows that H&M, during the years, increased their sense of responsibility towards
society. Furthermore, the economic and legal levels of the pyramid are fulfilled in all years, in
all dimensions. Within the ethical level, H&M generally went from being reactive to proactive
within all three dimensions. The main focus of H&M seemed to be to comply with special
interest groups’ expectations, which were also the strictest. The fulfillment of the ethical level
in the social dimension was, however, varying between the stakeholders. Scandals related to
advertisements and supply chain workers’ lack of rights prevented the ethical level to be
completely fulfilled at the end of the studied period. In regard to employees and integrity,
however, the ethical level seems to be fulfilled. Within the philanthropic level H&M go from
weak or no philanthropic CSR in the early years, to fulfilling it within all dimensions in the
later years. Overall, H&M increased their focus on CSR work significantly, and went from
being generally reactive to generally proactive.
Furthermore, the results have important implications for how the CSR work has changed over
time in large, international, fast-fashion companies in general. The results suggest that the fast
fashion industry has increased their sense of responsibility as the expectations of stakeholders
in the area have grown. It also shows that CSR work increasingly is seen as a possible
competitive advantage. The most difficult part in fulfilling the CSR pyramid is the ethical level,
51
due to the difficulty of comprehending and fulfilling the stakeholders’ different expectations
and demands, and within the fast fashion industry, the expectations within the supply chain
dimension seems especially difficult to comply with, because of its profound complexity.
52
8. Limitations & Further Research
In this section we present the limitations that had to be made for this study. This section also
suggests ideas for future research based on the limitations of this study.
The main limitation for this study is based on the time constraint for the thesis production.
Although only a selection of H&M’s sustainability reports were studied, the process was time-
consuming. This led to the media analysis not being as ambitious as originally planned, and
that its contribution to the study is somewhat limited. The aim with the analysis of the media
coverage was to be able to triangulate the data from the sustainability report. We feel that this
is an aim that we reached, however we do see the potential in that material to make a more
comprehensive in-depth study of the media coverage, for example through a full content
analysis.
Another limitation of focusing primarily on H&M’s sustainability reports is that it is mainly
H&M’s views of the CSR work that is being treated in this study. Future research could
therefore contribute to further answering our aim and research question by looking at data from
other sources, such as employee interviews and a more thorough media analysis.
This study is also limited by the lack of generalizability. Although our thesis gives some
answers to the general trends regarding CSR work in the fast fashion industry and retail over
time, each company reacts differently to trends, and makes different choices to answer to
customers’ changing expectations. While this thesis presents important implications of the CSR
development in the fast fashion and retail industries, a larger number of fast-fashion companies
have to be studied in order to provide the research community with the full picture of the
development.
Lastly, although actions such as triangulation of data, and the two authors constantly aligning
their definitions and interpretations, have been taken, all research, and qualitative approach and
case study design in particular, is always subject to the limitations of subjectivity.
53
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Appendices
Appendix I
H&M’s sustainability visions throughout the years, quotes taken from each of the sustainability reports.
2002, p. 6 “To uphold Human Rights, contribute to Sustainable Development and thereby earn trust from our Stakeholders.”
2005, p. 7 “To uphold Human Rights, contribute to Sustainable Development and thereby earn trust from our Stakeholders.”
2008, p. 4 “The Company shall be economically, socially and environmentally sustainable”
2011, p. 4 “All our operations should be run in a way that is economically, socially and environmentally sustainable”
2014 N/A
2017, p. 7 “To use our size and scale to lead the change towards circular and renewable fashion, while being a fair and equal company.”
2019, p. 11 “To lead the change towards circular and climate positive fashion while being a fair and equal company.”
59
Appendix II
Number of articles assigned to each category per year. Please note that one article can be assigned to several categories, which is why the total number of labels exceeds the number of articles.
Economic
Employees
Custom
ers
Supply Chain
Stakeholders
Environment
Transparency
Legal
Innovation
Total
2002 1 - - - - - - - - 1
2003 - - - - - - - - 0
2004 - - - - - - - - - 0
2005 1 - - - - - - - - 1
2006 2 1 - - - - 1 - 1 5
2007 - 2 1 - - 1 - - - 4
2008 2 1 1 2 - 1 1 - 1 9
2009 1 - 2 1 1 - - - - 5
2010 2 1 1 - - 1 - - - 5
2011 - - 4 1 2 4 - 2 1 14
2012 - 4 2 1 1 2 - 1 1 12
2013 - - 3 4 1 5 3 1 - 17
2014 3 5 2 6 5 9 2 3 - 35
2015 2 3 1 3 3 14 2 1 2 31
2016 1 1 3 4 6 12 1 1 2 31
2017 1 2 4 1 2 7 1 - 1 19
2018 3 1 1 3 1 7 - - 5 21
2019 3 - 9 4 2 21 2 2 - 43
Total 22 21 34 30 24 84 13 11 14 253
60
Appendix III
Coding scheme of the data collected from the sustainability reports, categorized according to the four different themes that we found in the data.
61
Appendix IV
In this flowchart we have illustrated how our coding process was done. The first step we did was read all of the periodically selected sustainability reports, while reading those we looked for information that could be linked to the theory we had prior knowledge of. We also looked for other “new” themes as well, the same was done with the media coverage. In this part of the process we were looking for keywords and phrases, these were then copied into a separate file and sorted into different sub-themes.
Here is an example of the keyworks & phrases that was coded into the emergent theme Environment and its sub-theme Supply Chain, the following quotes are taken from the CSR reports and Keywords & Phrases are in bold: “Furthermore, we have already learned that the pilot suppliers are motivated to make improvements on their environmental practice that goes beyond the law.” (2002) “Transportation of goods, although not operated by H&M, stands for almost 40% of total carbon dioxide emissions caused by H&M operations. Therefore, it is vital for H&M, in cooperation with our transporters and service providers, to try to achieve more environmentally friendly transports. For the 2nd consecutive year, a comprehensive enquiry to our transportation service providers about their environmental performance has been completed. From January 2003 we have a set of minimum environmental requirements for road transports.” (2002) “We concluded that cleaner production (CP) is the most effective measure, both because it is a preventive approach, and because savings on energy, water and chemicals can create a financial incentive for fabric mills to participate without the commercial pressure from a direct buyer, such as ourselves.” (2005, p. 66) “By creating demand for more organic cotton we can help create an incentive for more growers to shift to organic cultivation. However, the transition from conventional cotton farming to organic takes three years and this presents challenges. Although the land is not considered organic for the transition period, organic standards
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apply immediately. This can mean lower crop yields during the changeover, and farmers cannot yet charge an organic premium for their cotton. To support farmers we have decided to begin using cotton grown during this changeover phase, known as transitional cotton. “ (2008, p. 32) “Although we do not purchase the raw materials used in our products such as cotton or wool, we are concerned about their environmental and social impacts. We actively collaborate with other organisations such as the Better Cotton Initiative (BCI), Organic Exchange and UNICEF to help address these issues. We are working towards a long-term goal to increase the use of organic cotton and we provide support for transitional cotton. We also took our first steps in using other more sustainable materials such as organic as well as recycled wool or recycled polyester. All these steps reduce the environmental impact of raw material production. Also, the use of certified organic cotton allows us to track and trace cotton back to the field where it was grown.” (2008, p.2) We want to reduce, reuse or recycle wherever possible. Our ultimate aim is to send zero waste to landfill. However, at H&M we believe that our commitment to waste reduction should go beyond this. We also want to use our position as a major retailer to help our customers and business partners to reduce the waste that they generate. (2011, p. 66) The goal is that all of these roughly 500 factories must have improved water management systems, for example water usage measurement tools, in place by 2015. Furthermore, we want these factories to set annual targets for reduced water withdrawals and increased water recycling rates, etc. (2014, p. 95) Water scarcity and poor water quality are already impacting communities and ecosystems in many parts of the world, and climate change is making the situation worse. Our industry needs water. We must do all we can to conserve it and keep it clean and usable. That’s why we take a whole value chain approach to reducing our water impacts. (2019, p.29) And an overview of the news article that were coded as both Environment and Supply Chain, after being briefly read through in order to assure that the content handled H&M, CSR or Sustainability and the other themes: Swedish title of the news article Date of publication
”H&M siktar på bättre lön och mer ekotänk” 2015-04-14
”Samhällsansvar ska löna sig” 2015-05-17
”Hållbarhet stärker affären” 2016-12-19
”Svenska företag i topp inom hållbar textil” 2019-01-24
”Hur gör ni för att minska modebranschens negativa påverkan på miljön?” 2019-08-30