Corporate Social Responsibility: H&M's Initiatives and Challenges

This report discusses H&M's corporate social responsibility (CSR) practices, including their policy, initiatives, and challenges. It explores their strategies for meeting human rights expectations and highlights their philanthropic activities. The report emphasizes the importance of CSR for both the environment and the organization.

CORPORATE SOCIAL
RESPONSIBILITY

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
CSR Policy and the initiatives taken by H & M..........................................................................1
Challenges faced by organisation in implementation of CSR practices......................................3
Core Strategies for human rights expectations............................................................................4
Philanthropic activities undertaken by company. .......................................................................5
CONCLUSION................................................................................................................................6
REFERENCES................................................................................................................................7

INTRODUCTION
Corporate Social Responsibility is referred as management concept where the companies
their environmental and social concerns with the operations of business & interactions with the
stakeholders. CSR are considered as way by which company achieves balance between
environmental, economic and social imperatives. These concerns are addressed along with
meeting expectations of the stakeholders and shareholders. It is important for drawing
construction between the CSR that is strategic concept and the charity, philanthropy and the
sponsorships (González-Rodríguez and et.al., 2019). The present report is based on the H&M
(Hennes and Mauritz). It will deal with the concepts and CSR practices adopted by the company.
The report will cover about the initiatives taken by the company towards CSR. It will provide
about the policy of company regarding the CSR. This will also reveal about the practices
followed by company for violation of human rights and the philanthropic activities undertaken
by the company under the CSR practices. This has helped company in gaining the public
recognition and brand awareness in the society. Report will enhance the understanding the
concept of CSR practices and their importance for the growth of business organisation.
MAIN BODY
Hennes & Mauritz is Swedish multinational retail clothing company that is known for the
fashion clothings for women, men and children. The company operates over 74 countries with
more than 5000 stores under brand names of various countries. It is 2nd largest clothing retailer in
the world behind Inditex which is Spain based. It is also having significant presence in online
platforms.
CSR Policy and the initiatives taken by H & M
CSR Policy of H & M
Company from the inception is involved in the social welfare activities that helps in
improving quality of life in the communities where they operate. Company has following
activities for the conduct of business. Company focus over the following areas
Water and Sanitation – There are various places where the water is serious concerns. Clean and
safe water for drinking is serious concern for company. It focuses over raising awareness for
water conservations & providing access to sanitation, water and for hygiene awareness.
Education and environment – Company has deep focus over sustainability, it pays attention
over project & awareness for environment education with emphasis over reduce, reuse and
1

recycle. It also focus over projects for promoting quality education to society (H &M, CSR
Policy. 2019).
Livelihood and Empowerment – In the economy unemployment is the major issue which
impacts society. Company focus over enhancing the livelihood and the empowerment of women,
girls and youth.
Company engages continuously with the stakeholders , NGO's, experts and Government.
It also takes CSR practices that are with the government intent that are essential for society.
It provides that it will implement Programmes of CSR with personnel of company and other
external agencies.
Initiatives of company for CSR practices
Company has focused over reducing the environment pollution because of fabric
productions. It was majorly causing the environmental harm. For reducing the environment
effect company started using organic cotton of certified standards that reduced the impact by 46
percent. Company is also using cotton fabrics after recycling.
One of the major initiative of company was to collect the used clothes from people in
society for rewards. H&M was successful in collecting 76000 tonnes clothes which were
collected for recycling. New fabric is prepared from used clothes and that is added upto 20% in
new clothes. From the recycled clothes around 38 million t-shirts could be manufactured. This
reduces the requirement and demand for production of fabric saving the cost and wastage. Along
with it it also adopted new processes in the production activities and the supply chain. It has
installed new and advance technology for reducing the usage of renewable resources (Yu, Cao
and Tan, 2019). Company using these new technologies in production process reduced the
energy consumption by 55 percent and water usage by 56 percent. It has helped H&M in saving
areas with scarce resources. It has also taken initiatives for using water based product reducing
and replacing the use of Polyurethane also recognised as Vegan leather. Company continuously
strives to increase durability of cotton fabrics. It has implemented the policy of full disclosures in
its supply chain.
It has taken initiatives for increasing the employment and currently provides 1.6 million
people with employment. Company also give special preference to the women. It measures the
level of sustainability achieved by the Code of Conduct Index. Company has cooperation with
ILO (International Labour organisation) to devise the code of conduct pursued by organisation.
2

Company takes initiative for training employees by conducting the programmes such as
''GROW''. They provide training to employees for educating them with through e-learning
resources and teachings. The motive behind these programmes is increasing the environmental
awareness and to educate them for sustainability (Bortree and Haigh, 2018). It also educates its
employees for equality and diversity this could be judged by the number of women working in
the organisation. Approx 76 % of employees consists of women and managers consists of 72%
females. This also takes initiatives for providing education to the children from poor societies
and rural areas across many countries. Company carries out number of other activities and
projects under CSR for welfare of society served by them.
Challenges faced by organisation in implementation of CSR practices.
Fast fashion have been demonised due to its unethical & ecologically harmful production
processes. Companies are adopting the makeovers by adopting the CSR practices. There are
several issues and challenges faced by H&M in attaining its aim of sustainability and
environment benefits by reducing pollution. The major challenges faced by clothing industry in
implementation of CSR practices are that it operates in ever changing and fast moving fashion
world. Focus of clothing industry is to have low manufacturing cost with high sales volumes for
remaining afloat. This is achieved by hiring cheaper labour for producing the garments that are
made from inexpensive materials (Diddi and Niehm, 2017). This helps company in maintaining
the group of large low paid employees and workers. Employees are forced for working extra
hours in meare pays and deplorable conditions. The government interference in most of the
practises laid by company increase the cost that makes it difficult for company to continue with
its projects.
Company has large network of around 800 factories operating in Asia & Europe. Each
and every policy and action of company towards CSR are required to be implemented in its
entire group. This is a challenging task for company to implement the practice in whole
organisation around the world. Despite of spending millions over the trainings and education
programmes by company it is difficult to keep them over ethical path (Księżak, 2016). The
company deals in ever changing fashion industry that creates huge wastage of clothes as they go
out of fashion. However company uses those clothes for charitable purpose and provides them to
poor and backwards areas.
3

Everyone is aware of the fact that clothing industry produces large environment
pollution due to its production processes. It involves usage of harmful and hazardous chemicals
in clothing processes as there substitutes are not yet available. They create the maximum amount
of air pollution from its activities due to use of chemicals for dyeing, manufacturing and other
processes. Though company uses pollution control equipments but it is not possible for company
to eliminate the pollution to considerable extent. It releases huge amount of carbon pollutants in
the environment harming the air and people of the localities.
It also involves usage of large number of renewable resources like water, energy and
cotton fabrics. All these resources are required for manufacturing process in clothing industry.
There is large wastage of resources even after employing considerable and advance technology
in its resources (White, Nielsen and Valentini, 2017). Processes requires energy for running the
production of clothes and also the water is used at considerable extent by the company. Even
after adopting the technology usage is not reduced and demand for these resources is harming the
environment.
The CSR practices requires employment of big amount of funds for carrying out the
social activities. It is difficult for company to make considerable part of its earnings for the
development of society as these activities force the trade unions to demand for higher wages.
High investments in CSR activities causes the company to increase the prices of their product
due to increase in manufacturing costs. Also the profit margins are to be reduced due to the
economic conditions and competition in the clothing industry.
Core Strategies for human rights expectations.
Company measures the sustainability performance with the use of Code of Conduct
Index. H&M is welcoming partnership with those that are responsible towards the environment
and sustainability. Research and analysis is conducted by company over the market where
violation of human rights is conducted before it proposes to enter with new products in such
markets. It is strict on the part of partners that do not comply with sustainability standards. It
helps partners to become responsible towards the society.
H&M conducts head audits for identifying the challenges and issues faced by employees
working within the organisation. It conducts system analysis for finding the root causes of the
issues arising in company (Karim, Manab and Ismail, 2019). The head audit helps company in
analysing the possible causes so that related remedial actions could be taken by the company for
4

resolving these issues. The progress of the remedial actions is achieved by re-audits. With the
cooperation of ILO it has devised code of conduct which deals with issues related with
corruptions, rights of employees & anti- discrimination rules, equality and harassments cases.
They are implemented by the organisation for reducing the unethical practices being followed by
organisation and within the workplace. These were undertaken for taken actions against cases of
violation of human rights. These practices are implemented throughout the supply chain.
It ensures that prices paid to suppliers are sufficient and allow them to provide the
employees with the necessary living requirements. Company is taking steps for devising method
for measuring optimal wages and prices. H &M has cooperated government authorities of
various countries across globe such as Myanmar, Ethiopia, Bangladesh and Cambodia for taking
actions and steps for development of the strict and strong statutory frameworks for minimum
wages and to enforce the right for freedom to form associations (Dziuba, 2020). This will
promote creation of trade unions where the workers will have right to work in democratically
elected business place. Initiatives of company will help to decrease the cases of discrimination
faced by company at workplaces between the employees. Company is also paying attention for
the development of processes through which optimal wages for the employees could be assessed.
Actions of company will help in reducing social unawareness between shareholders and
stakeholders of business. It takes actions for promoting business environment with equality
without any discrimination between the employees.
Philanthropic activities undertaken by company.
H & M is engaged in large variety of activities are important for the social welfare. It has
made remarkable contribution for upliftment of societies and communities. Its major
philanthropic activities include the cooperation over project on '' All for Children'' with UNICEF
in countries like India and Bangladesh. Project is aimed at providing the children with poor
backgrounds chance of getting education. It conducts teaching courses for farmers to grow cotton
that makes least harm to environment. It provide funds for start up business to women and
vocational training to women from backward areas. It provided donation for education and
saving children from H&M conscious funds. Campaigns are run within the stores for making
purchases that will be add part to the charitable funds (Ritch, 2018). It provides clothes in
5

charity to people of backward regions. It promotes steps that promotes sustainability in the
business and give trainings encouraging others to work for sustainability.
CONCLUSION
The above report shows the importance of CSR practices both for the environment and
organisation. Clothing industry causes great harm to the environment from its processes.
Companies are required to take their role and responsibilities for sustainable development. There
is great need of adopting the technological advancement reducing the environment pollution.
Along with making profits organisations should also invest for the upliftment of society this adds
more value to their business.
6

REFERENCES
Books and Journals
Bortree, D. and Haigh, M., 2018. International CSR: Challenges of implementing corporate
responsibility programs across the globe. Public Relations Journal. 11(4).
Diddi, S. and Niehm, L.S., 2017. Exploring the role of values and norms towards consumers’
intentions to patronize retail apparel brands engaged in corporate social responsibility
(CSR). Fashion and Textiles. 4(1). p.5.
Dziuba, R., 2020. Exploring Corporate Social Responsibility Practices in the Clothing Industry:
the Case of Polish and British Companies. FIBRES & TEXTILES in Eastern
Europe. 28(1). p.139.
González-Rodríguez and et.al., 2019. Hotels’ corporate social responsibility practices,
organizational culture, firm reputation, and performance. Journal of Sustainable
Tourism. 27(3). pp.398-419.
Karim, S., Manab, N.A. and Ismail, R.B., 2019. The dynamic impact of board composition on
CSR practices and their mutual effect on organizational returns. Journal of Asia Business
Studies.
Księżak, P., 2016. The CSR challenges in the clothing industry. Journal of Corporate
Responsibility and Leadership. 3(2). pp.51-65.
Ritch, E.L., 2018. Fashion Brand Management: Fashioning Value Through CSR. In Fashion and
Textiles: Breakthroughs in Research and Practice (pp. 408-440). IGI Global.
White, C.L., Nielsen, A.E. and Valentini, C., 2017. CSR research in the apparel industry: A
quantitative and qualitative review of existing literature. Corporate social responsibility
and environmental management. 24(5). pp.382-394.
Yu, M., Cao, D. and Tan, J.Y., 2019. CSR-consumption paradox: examination of UK apparel
companies. Journal of Fashion Marketing and Management: An International Journal.
Online
H &M, CSR Policy. 2019. [Online]. Available through : <https://www2.hm.com/en_in/customer-
service/legal-and-privacy/corporate-social-responsibility-csr-policy.html>.
7