Hennes & Mauritz : Modern Slavery Statement 2021

Modern Slavery Statement 2021

Modern Slavery Statement

H&M Group

The H&M group is one of the world's leading fashion and design companies and has seven independent fashion brands: H&M, COS, Weekday, Monki, H&M HOME, & Other Stories, ARKET and Afound. We also operate: Treadler, a business-to-business service enabling other companies to access our supply chain and remove barriers to sustainable sourcing; and Singular Society, a subscription-based business that gives members access to responsibly made, high-quality fashion at the price it costs to make. We are a majority shareholder in Sellpy, an online resale platform.

We want to offer customers the best combination of fashion, quality and sustainability at affordable prices - providing unbeatable value and the ability to access a more sustainable lifestyle. We are dedicated to creating a better fashion future, and to use our size and scale to lead the change towards a circular and climate positive fashion industry while being a fair and equal company.

About this statement

The H&M group brings together approximately 155,000 employees across the world. We have around 4,800 stores in 75 markets, provide online services in 54 markets and our brands can be reached via various digital marketplace and external platforms. The products we sell are manufactured by approximately 600 commercial product suppliers, which have around 1,200 manufacturing factories and final product processing units (collectively called supplier factories). Our tier 1 and 2 production supply chain contributes to the employment of around one and a half million people in 24 countries.

Since 2013, we have published our Supplier List. For more information about the H&M group, its organisational structure and group relationships, see About us and Annual and Sustainability Report.

This statement is made on behalf of H & M Hennes & Mauritz AB and all companies in the H&M group ("H&M group"), pursuant to the UKModern Slavery Act, the Australian Modern Slavery Act 2018 (Cth) and the California Transparency in Supply Chains Act. It applies to, and sets out the steps, the H&M group has taken during the financial year 2020-2021 to address modern slavery within its supply chain and its own business operations.

H&M group has a global commitment to human rights and takes a global approach to tackling modern slavery risk. This statement therefore reflects our global commitment and approach across our value chain and has been prepared in joint consultation with the subsidiaries identified above, whose relevant representatives were provided with the opportunity to contribute to the statement process.

H & M Hennes & Mauritz AB provides this joint statement for itself and on behalf of certain foreign subsidiaries that are directly covered by a disclosure obligation in their respective jurisdictions. Currently this includes H&M Hennes & Mauritz UK Ltd, H&M Hennes & Mauritz UK Services Ltd and H & M Hennes & Mauritz GBC AB pursuant to section 54(1) of the UK Modern Slavery Act 2015, and H&M Hennes & Mauritz Pty Ltd pursuant to the Australian Modern Slavery Act 2018. Through this statement, H&M group also satisfies the disclosure requirements pursuant to the California Transparency in Supply Chains Act 2010.

A value chain approach to addressing modern slavery

When we talk about our value chain, we mean the full range of activities it takes for us to bring our products to market - from the design idea and choice and sourcing of material, through processing and manufacturing, distribution and sales, to consumption, including disposal, recycling, reuse and resell. In other words, our various supply chains, our own operations, and the use and reuse of our products.

Modern slavery is a comprehensive term that covers forced and compulsory labour, indentured child labour, servitude, human trafficking and similar violations. These are violations of human rights, which are upheld by both international and national legislation. According to the available data and experts in the field, forced labour occurs in all sectors and industries, and is unfortunately observed in all types of economic activities - and in every country.

ILO Convention 29 defines forced labour as "all work or service which is exacted from any person under the menace of any penalty and for which the said person has not offered himself voluntarily,1 and in addition to being a serious violation of fundamental human rights, exacting forced labour from people is a criminal offence under domestic law. Both adults and children can be victims of forced labour. It can be exacted from them by state authorities, private enterprises or individuals. Indicators of forced labour2 include unreasonable fees leading to debt bondage, deception, restriction of movement,isolation, abuse of vulnerability, physical and sexual violence, intimidation and threats, abusive living and working conditions, wage withholding, excessive overtime, and retention of personal documents. As actual cases of forced labour can be hard to identify, we report both on actual cases confirmed and on indicators of heightened risks of modern slavery - see KPI table on page 11.

Forced labour has been identified as a one of the H&M group's salient human rights issues and informs the focus of our work. The risks of forced labour in our production supply chain are most prominent upstream in the supply chain linked to specific raw materials, often associated with agriculture or farming. Manufacturing, warehouse operations, transportation, construction and facility management are also recognised as high-risk industries. This risk increases where local legislation or governance are weaker, and where more vulnerable groups are present.

Vulnerable groups that run a higher risk of exploitation include migrant workers, agency workers, temporary workers and self-employed people. As migration around the world has increased and to further strengthen our work to address the risk of forced labour in connection with migration, we signed a memorandum of understanding with the International Organisation of Migration (IOM) in 2019, including a goal of no recruitment fees in our supply chain by 2025. We recognise migrant workers as a group particularly vulnerable to the risks of modern slavery and therefore as a key focus for achieving our goal. Read more about our various collaborations and partnership to combat modern slavery in Appendix 1.

H&M Group value chain

• 1) C029 - ILO Convention Concerning Forced or Compulsory Labour.

• 2) ILO Indicators of Forced Labour.

Human rights management: our approach

Our policies and commitments guide our approach, and our aim is to ensure that human rights due diligence is carried out systematically and consistently as an integral part of all relevant processes. Human rights due diligence is an ongoing process of identifying risk and impact to people, addressing - meaning prevention, mitigation and/or remediation of identified risks - and accounting for how we respect human rights in practice.

Our social sustainability strategy puts a lot of focus on strengthening worker voice, including the establishment of grievance mechanisms at various levels, and our incident and remediation process is informed by our commitment to respect human rights.

Together, these elements serve as the basis for our human rights management (see graphic). For more information, see Our Approach.

Human rights due dilligence

1 PROCESS TO IDENTIFY AND ASSESS

• - Salient human rights process and review

• - Risk assessment in production markets

• - Risk assessment by functions

• - Material risk assessment

• - New markets review

• - Due diligence of potential business partners

2 COMPONENTS IN OUR SUSTAINABILITY

PROGRAMME

• - Specific policies and procedures

• - Supply chain monitoring and management

• - Audits and remediation, capacity building, initiatives and programmes (own and in collaboration with others)

• - Partnerships and public affairs

• - Grievance mechanism

• - Incident management and remedy

4 TRAINING

- Internal training capacity building of business partners and business partner employees

4 STAKEHOLDER ENGAGEMENT

- Continuous dialogue and engagement, and collaboration in indentification and assessing, address (prevent, mitigate and remediate)

• - Report according to law requirements like UK Modern Slavery Act etc.

• - Respond to grievances and questions raised by stakeholders

3 TRACK AND COMMUNICATE

• - Business partner performace

• - Report on goals and KPIs

• - Disclosure of supplier list and compliance data

• - Report according to the UNGP RF and additional standards

Our policies & commitments

We strictly prohibit any type of forced labour in our supply chain, regardless of the market or region. All allegations made about the H&M group, a supplier or business partner are investigated. If we discover and verify a case of forced labour, we will take immediate action.

Our policies and commitments guide our approach to managing human rights and our aim is to ensure that human rights due diligence is carried out systematically and consistently as an integral part of all relevant processes.

- The H&M group publicly commits to respecting human rights and recognises its responsibility to respect human rights across our value chain as stated in the UN Guiding Principles on Business and Human Rights (UNGP) through our Human Rights Policy. Our Human Rights Policy manifests our commitment to combat forced labour by reference to the Universal Declaration of Human Rights and ILO Core Conventions.

- We place specific requirements on all our business partners, and they are required to sign and implement our Sustainability Commitment for Business Partners. This commitment clearly states that: "forced labour, bonded, prison or illegal labour is not accepted. If contracted labour is hired, the employer is responsible for payment of employment eligibility fees of contract and/ or foreign workers, including recruitment fees. Employees shall not be required to lodge 'deposits' or identity papers with their employer and shall be free to leave their employment afterreasonable notice. The employee's freedom of movement is not restricted. No part of their wages is withheld."

- Our Migrant Workers Fair Recruitment and Treatment Guidelines further clarifies requirements and detailed expectations in relation to the recruitment of foreign and migrant workers towards our business partners, including the use of labour agencies and definitions of recruitment fees.

- Our Sustainability Commitment also states that child labour is not accepted. To underline the importance of this requirement, we have a specific Child Labour Policy stating our requirements and expectations should child labour be found.

- Our approach to material sourcing with specific requirements is outlined in our Responsible Raw Material Sourcing Policy.

All business partners are continuously trained in or kept informed about our commitments and policies and their content.

Concern about suspected modern slavery or any other issues can be raised using our corporate Speak Up grievance channel available in most of our markets, as well as through other grievance mechanisms.

Staff training & capacity building

H&M group employees are continuously trained in our policies, including those related to human rights, and our company values. Specific e-learning courses on sustainability-related themes are also available to our employees via web-based platforms, including e-learning modules on forced labour developed by the Mekong Club.

During 2021 we continued to roll-out general awareness raising about modern slavery risks. We also provided specific training on migrant workers and fair recruitment to key roles within our production offices as well as the majority of our direct manufacturing suppliers - see case study right, and KPI table on page 11.

Identifying risks of modern slavery

Our company's overarching salient issues, including the risk of forced labour and child labour, form the basis for our ongoing analysis of human rights risk across our operations and supply chains. We apply this analysis to different situations and contexts to inform a risk-based approach that helps us prioritise our efforts and adjust actions. Our risk methodology combines: country risk indicators, from sources such as Maplecroft, Global Slavery Index, and the US Department of Labor's List of Goods made by Forced and Child Labour; sector or process risk;

Engaging with our colleagues and suppliers

In 2019, the H&M group formed a partnership with the International Organization for Migration (IOM) and announced our goal of no recruitment fees in our supply chain by 2025. This is part of our commitment to be a fair and equal company and to promote diversity throughout our value chain.

We have since worked with IOM to develop our Migrant Workers Fair Recruitment and Treatment Guidelines and we are developing strategies and roadmaps in each of our production countries to ensure we reach our goal. Another essential step is to ensure our suppliers and our own people are informed and educated about ethical recruitment.

In 2021, IOM conducted trainings to raise awareness about the vulnerability of migrant workers and how to promote their rights and secure safe recruitment. More than 40 of our own colleagues in key roles and over 500 senior management from 300 supplier manufacturing factories joined the training, from seven different countries.

Learn more about our partnership with IOM and the work we do to protect migrant workers on here.