Sustainability Disclosure 2021

About this report

Sharing relevant and accountable information about our business practices, supply chain and products is important for tracking our progress and learnings towards a more sustainable future.

Our reporting includes several components:

- An Annual and Sustainability Report provides an overview of our financial and non-financial performance, including our Statutory Sustainability Report.

- This Sustainability Disclosure complements our Annual and Sustainability Report by providing additional detailed information about strategy, policies, goals, programmes and performance data. Web content offers further detail on specific sustainability issues, including our strategies and policies. Find links throughout this report.

-Report Stories showcase highlights from our work. Follow links across this report.

- External reporting frameworks: Global Reporting Initiative and UN Guiding Principles indexes, and Task Force on Climate-Related Financial Disclosures reporting in our Annual and Sustainability Report.

This report discloses our goals and performance for the financial year from 1 December 2020 to 30 November 2021. Read more about the scope of this report in How We Report.

Contents

Our approach to sustainabilityCircular & Climate Positive

Fair & Equal

Our approach to sustainability . . . . . . . . . . . . . . . . . . . 4

Key sustainability policies and standards . . . . . . . . 6

How we Lead the Change

How we Lead the Change . . . . . . . . . . . . . . . . . . . . . . . . 7

Transparency ................................... 8

Engaging with our stakeholders . . . . . . . . . . . . . . . . 10

Engaging with policy makers . . . . . . . . . . . . . . . . . . . 11

Performance highlights

Highlights2021 ................................. 13

Externalassessments .......................... 14

KPIs: Circular & Climate Positive . . . . . . . . . . . . . . . . 15

KPIs:Fair&Equal ............................... 16

Circular&ClimatePositive ...................... 17

Our Circular & Climate Positive approach . . . . . . . 18

ClimatePositive ................................ 19

Biodiversity ................................... 25

Water ......................................... 27

Ourcircularecosystem ....................... 29

Circular products:

-Design ..................................... 30

-Materialchoice .............................. 31

-Microfibres ................................. 36

Circular supply chain:

- Optimising resource use . . . . . . . . . . . . . . . . . . . . 37

-Materialsprocessing ....................... 39

-Chemicals .................................. 40

Circular customer journey: - Maximising product life & scaling circular businessmodels ............................... 41

Circular products, supply chain & customer journey: - Stores, distribution centres & offices . . . . . . . . 44 -Packaging .................................. 45

Fair&Equal ..................................... 47

Our approach to being Fair & Equal . . . . . . . . . . . . 48

Respecting & advancing human rights . . . . . . . . . 49

Inclusion&diversity ............................ 51

Fair jobs in our own operations . . . . . . . . . . . . . . . . 55

Fair jobs in our production supply chain . . . . . . . 57

Supply chain management

Supply chain management . . . . . . . . . . . . . . . . . . . . . 66

How we report

Howwereport ................................ 70

UN Sustainable Development Goals . . . . . . . . . . . . 71

Auditor'sreport ............................... 72

Our approach to sustainability

We are continuing to work towards our goal to make fashion and design accessible to the many, in a way that's good for people, the planet, our industry and our business. Our sustainability strategy guides us as we work to lead the change towards a circular and climate positive fashion industry while being a fair and equal company.

We achieved several milestones in 2021. We are now working to achieve net-zero greenhouse gas emissions,1 as part of our climate positive approach. We previewed our new circular design tool, Circulator, and developed country-specific wage strategies in our production supply chain that consider national contexts and legal settings. The Covid-19 pandemic has continued to underline the importance of accelerating our sustainability agenda.

1)Net-zero as defined by Science Based Targets initiative's Net-Zero Standard.

The way we report on sustainability has also progressed. This year, we published our first combined Annual and Sustainability Report, taking another step on our journey to integrate sustainability into every part of our business. Read our Annual and Sustainability Report for more detail on our sustainability vision and strategy and how it supports our business, and information on our sustainability governance.

Our sustainability strategy

Our vision is to lead the change towards a circular and climate positive fashion industry while being a fair and equal company.

- Climate positive approach across our value chain, operating within planetary boundaries

- Net positive impact on biodiversity - Circular ecosystem for our products, supply chains and customer journeys

CIRCULAR AND CLIMATE POSITIVE

Our approach to sustainability

A message from our CEO

This year is the first year that we at the H&M group are integrating our annual and sustainability reports. This is an important step, but also a natural development since sustainability has been an integral part of our business for a long time.

To meet customers' ever-increasing expectations, we are continuing to develop the customer offering for all our unique brands by offering customers the best combination of fashion, quality, price and sustainability. Demand for good value and sustainable products is expected to grow and our customer offering is well positioned for this. Among other things, customers can today carry out repairs, rent clothes or buy and sell second-hand.

I would like to thank all colleagues in the group for their efforts over the past year. Our colleagues everywhere in the organisation have demonstrated great commitment and worked to meet customers' expectations despite the challenges, restrictions and lockdowns due to the pandemic. We are proud that our strong recovery continued in 2021 with much appreciated collections and products, continued customer focus and strong relations with our partners.

At the time of writing, however, we are deeply concerned about the course of events in Ukraine and our thoughts go out to all those affected. We are monitoring developments closely and doing all we can to help people as much as possible. H&M Group, the H&M Foundation and the Erling Persson Foundation have donated millions of kronor as well as clothing and other essentials to organisations such as UNCHR, Save the Children, the Red Cross and UNICEF. We join all those around the world who are calling for peace.

Helena Helmersson CEO, H&M Group

Read the full CEO letter in our Annual and Sustainability Report.

A message from our Head of Sustainability

I'm pleased to present the 2021 H&M Group Sustainability Disclosure, detailing our priorities, progress and learnings on key environmental and social issues over the past year. We share the growing sense of urgency with many around the world who recognise the fashion industry needs to move faster towards circularity and continue to work to develop a fairer, more transparent and traceable supply chain.

This year, we accelerated our net-zero ambitions and made progress in key areas such as material sourcing, inclusion and diversity, and circular design. We've partnered with others to test and scale circular materials, processes and business models, and to progress social protection and dialogue within our supply chain.

Looking ahead, we see collaboration as essential for finding solutions to the complex and interconnected challenges we face as an industry. We've come a long way, but we know there is much more to do to accelerate our transformation. We will continue to share our progress and learnings, and welcome collaboration and partnerships as we continue this journey

Leyla Ertur

Head of Sustainability, H&M Group

H&M Foundation

The H&M Foundation is an independent non-profit global foundation for public good, headquartered in Stockholm, Sweden. It is privately funded by the Stefan Persson family, founders and main owners of H&M Group. Founded to accelerate the realisation of the UN Sustainable Development Goals, H&M Foundation uses collaboration and innovation to co-create, fund and share solutions for the world's most urgent challenges.

Since 2013, the family has donated SEK 1.5 billion (USD 200 million) to the Foundation.

Learn more at hmfoundation.com

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Disclaimer

H&M - Hennes & Mauritz AB published this content on 31 March 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 31 March 2022 06:35:08 UTC.