Sustainability and corporate social responsibility are clearly priorities and not merely afterthoughts for H&M group. H&M Indonesia proves that a company can achieve sustainability, create good jobs and drive prosperity in the market in which it operates.
H&M Indonesia (Puls Trading Far East Ltd.)
Sustainability: Not A Fashion Fad
H&M Indonesia internalizes the values of environmental and social responsibility.
Fashion giant H&M’s business concept of ‘Fashion and quality at the best price’ provides a framework for its ethics, in which quality not only means the durability of its end products, but also quality in respect of environmental and corporate social responsibility. H&M Indonesia was set up in 1996 according to these values and business concept. Its vision is to galvanize change towards circular and renewable fashion, while being a fair, inclusive and responsible employer. This vision is composed of three key ambitions, namely, 100 percent Leading the Change, 100 percent Circular and Renewable, and 100 percent Fair and Equal.
The company works with its stakeholders, which comprises its customers, communities, colleagues, suppliers, supply chain employees and their representatives, industry peers, policymakers, academia and the scientific community, non-governmental organizations and intergovernmental and international organizations, to achieve its vision of a sustainable fashion and design industry through effective collaboration to promote long-lasting positive change and accelerate the impact of the same.
This is achieved via the engagement of stakeholders through multi-stakeholder initiatives such as the Ethical Trading Initiative (ETI), Sustainable Apparel Coalition (SAC), and Better Cotton Initiative (BCI). H&M Indonesia has also entered into Memorandums of Understanding with the International Labour Organization (ILO), the Swedish trade union IF Metall, IndustriALL (ACT), and the Swedish development agency, Sida, to this end.
At the local level, H&M Indonesia engages with several partners for its 100 percent Leading the Change and 100 percent Circular and Renewable ambitions. Among its partnerships are ones with Danone AQUA for the Bottle2Fashion project to recycle PET bottles into fashion products, Gamaindigo for the development of natural dyes, Bureau Veritas (BV) for the development of an environmental emissions monitoring program for better chemical usage (named E-Cube), WWF to develop the capacity of rattan farmers as well as to increase product traceability, and UNIDO and Indonesia Cleaner Production Centre for a RECP (Resource Efficient and Cleaner Production) project which focuses on industrial development through the improvement of efficiency in its operations to optimize the use of resources, and minimize any adverse impact on the environment. All H&M operations comply fully with applicable air quality, emissions, energy efficiency, water conservation, and water quality laws and regulations, and actively strive to mitigate their impacts on climate change, air quality, water use, and water quality.
From the products it designs and manufactures, to the packaging, materials, and processes it uses, and to the way customers are encouraged to care for and dispose of its products, H&M Indonesia is building circularity into every stage of its value chain. It is also in the process of transitioning to using 100 percent renewable energy throughout its operations with the ultimate goal of achieving a climate-positive value chain which creates a net positive impact, carbon emissions-wise, by 2040.
The H&M Group has a long-standing commitment to improving animal welfare, and is consistently working to source all animal-derived materials from farms with good animal husbandry practices. It is also increasing the use of recycled animal fibers, and supports the development of innovative materials that can offer the same qualities as those of animal origins. It is diametrically opposed to the use of fur, exotic animal skins, and materials derived from endangered species. Having ended the use of angora wool, it is now phasing out the use of mohair and cashmere, and has set global deadlines to ensure that its wool and down products are sourced only from farms certified as responsible and humane by organizations that include Humane Society International and Fibre Alliance, and to achieve a global ban on animal testing for its beauty products.
H&M Group’s chemical policy is implemented to protect human and environmental health and safety, while its material ethic policy ensures that the sourcing of raw materials is carried out in a responsible and sustainable manner, and that the suppliers of raw materials comply with all applicable environmental, health, safety, and labor laws and regulations, including those related to land tenure and use rights. No sourcing is permitted from ancient and endangered forests, or endangered and vulnerable species. A global deadline of 2025 has been set for sourcing wood only from FSC-certified forests. H&M Group has been working with the CanopyStyle Leader for Forest Conservation since 2014 to close the loop for textiles and support the development of alternative man-made cellulosic fibers made from sources such as agricultural residues and recycled textiles. Suppliers who work with any H&M group brand must sign the group’s Sustainability Commitment to provide a binding assurance of healthy workplaces, healthy ecosystems and higher animal welfare standards. The group conducts performance evaluation to identify and reward suppliers that commit to, and meet, those aspirations.
H&M Indonesia engages with several partners to achieve its ambition of being 100 percent Fair and Equal. These partners include UNFPA, USAID, ILO, and the Indonesian Ministry of Health for its women empowerment, disability employment, freedom of association, collective bargaining agreement, fair wage, and safety and health programs. Through the provision of fair jobs and the promotion of diversity and inclusiveness, H&M Indonesia nurtures respect for human rights and fair and equal societies, both within its own company and across its supply chain.
The company’s operations have dedicated sustainability departments both at global and national levels, including in Indonesia, to ensure that its key ambitions are achieved. Its visions and ambitions are translated into concrete and measurable goals at group, market, and function levels nationally. The retail giant works with experts, both internally and externally, and adopts a science-based approach to define targets and actions. As each region is at liberty to determine its respective targets to respond to specific local challenges, H&M Indonesia has taken the lead to initiate bold and novel projects such as one to develop capacity-building and product traceability for rattan farmers in Kalimantan, and one to improve women’s health, economic independence, and well-being by addressing reproductive health and gender-based violence issues, and increasing the soft skills of women workers.
To bring itself closer to its ambition of 100 percent Leading the Change, H&M Indonesia has determined three focus areas, namely: Innovation, in which sustainable materials and sustainable fashion are developed with the help of Artificial Intelligence; Transparency, which informs customers and empowers them to make ethical choices and therefore engender sustainability in the supply chain; and finally, Rewarding Sustainable Actions, which incentivizes business partners, colleagues, and customers to make sustainable and responsible decisions and actions. Efforts to educate and empower customers and end-users include garment collection and recycling initiatives, Clevercare labels to increase the lifespan and usability of its products, and product traceability to enable customers to make informed decisions.
From its initial goal of democratizing clothing by making fashion accessible and affordable, H&M’s definition of democracy has evolved to include fashion that is sustainable and which protects, assists, and benefits communities and the environment. To achieve this goal in a practical and quantifiable manner, sustainability is integrated as a key parameter in its company performance scorecard, which means that each central function and brand is measured on a set of sustainability KPIs alongside, and in equal weight, to sales figures, customer satisfaction and other measures of success.
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As One Of Asia’s Top Leadership and Sustainability Players