The drive to produce clothing more quickly but less expensively is widespread, but its most prominent source might be the fast fashion movement, as exemplified by the international retailer H&M, a leader in the industry. Although such production and pricing pressures offer benefits to firms, which can sell more, and their customers, who obtain products at lower prices, they have serious and detrimental effects farther up the supply chain. When it comes to addressing these effects, H&M wants to take a leadership role as well.
A recently announced transparency tool is the first of its kind. Shoppers on the H&M website now encounter “product sustainability” links. When they click, the page details where each product was made, in terms of both the country and the specific factory. It lists how many people are employed by the factory and even gives its address. Furthermore, the sustainability information specifies the product ingredients and whether any of its input was recycled. Shoppers in stores, as long as they have downloaded the H&M app, can scan clothing tags to receive the same information.
It is the first transparency initiative of its time, but it is sufficient? Critics note that even with that information, consumers cannot confirm if a factory meets minimum safety standards or relies on child labor. Nor are workers’ wages listed, which remains a major concern in global clothing supply chains.
Still, H&M points to this transparency effort, together with its other commitments to responsible supply chains, as evidence of its good intentions. It signed on to the Accord on Fire and Building Safety, which demands a minimum level of safety standards in all suppliers’ factories. In addition to supporting this third-party organization, it sends its own observers into factories, often in unannounced visits, to check the conditions. If its internal analyses indicate that suppliers are not living up to its ethical standards, H&M immediately excludes those suppliers; in 2018, it cut ties with six companies it deemed as not in compliance with its required sustainability practices.
Calls for such supervision and sustainability efforts have mostly come from consumers, who often express disgust and dismay when they learn of the terribly unsafe, unethical working conditions in which factory employees in many underdeveloped nations toil (especially after tragic events that spark worldwide media coverage of those conditions). Yet these same consumers demand low prices, which requires an efficient supply chain. In this sense, H&M—and other brands in similar markets—finds itself in a difficult position. It must meet demands for both transparency and low costs. In the fashion supply chain as it exists today though, that goal might simply be impossible.
Discussion Question:
- What is H&M’s sustainability program?
- Why did it start this program?
- Do you believe this program will have an impact on H&M, and if so, what will that impact be?
Source: Elizabeth Paton and Sapna Maheshwari, The New York Times, December 18, 2019.