How the Swedish retail giant views children’s rights and business

As one of the largest fashion retailers in the world, the H&M Group has the capacity to drive economic and social change. Global Child Forum’s Head of Communication, Linda Lodding, spoke with Anna Gedda, H&M’s Head of Global Sustainability about how the Swedish retail giant addresses child rights issues in their vast supply chain – and what keeps Anna awake at night.

The complexity and scale of the apparel industry means that its social, environmental and economic impacts are huge. In order to help us frame our discussion, could you tell us about the scope of H&M and your operations?

The H&M Group is actually a group of eight brands including, for example, Arket, Afound, Cos and Other Stories. In terms of annual revenue, we are the largest garment retailer; so with that comes, of course, a big size and scale and we employ around 160,000 people directly. But, if you look at the people who are employed in our supply chains, that’s of course millions of people that H&M indirectly employs.

It’s important to keep in mind that in this industry, very few companies, including H&M, have their own factories. Instead we work together with other suppliers and their factories and they produce not only for us but for others as well. So if you go into a factory, you see workers producing H&M clothes as well as producing for our competitors. So what this means is that whatever challenge we need to address, we need to collaborate with others both within the factories and beyond.

How did H&M become engaged with children’s rights and how has your engagement with these issues developed over the years?

Well, it has really been a journey. The H&M group has a long history of working with sustainability, dating back to the 90s when it came to our attention that we had big issues in our supply chain — both with working conditions and child labor. That was a crisis for us not only in terms of media and public perception but, more importantly, for us internally because this wasn’t the kind of company that we wanted to be. That crisis catalyzed our work with a lot of different actors to try to combat child labor in our supply chains and that grew into a much bigger sustainability program.

But in order to tackle such a big issue as child labor you need to go beyond one or two particular cases and look at the reasons that child labor actually occurs. Of course this is a complex issue and could be the result of many factors such as poor education, low awareness about children’s rights, shortage of income from the parents etc.

So we’ve worked together with our suppliers, but also many other actors in the industry to get to those root causes. When we started with this work there were no such tools like the Children’s Rights and Business Atlas; there were no guidelines or tools for brands like us to use so we had to start at the beginning. And one thing became quite clear — we couldn’t do this on our own; we needed to bring in external experts who could help us address these issues.

We also started to work with risk mitigation and realized that there are some areas where children are directly impacted, but also many areas where children are indirectly impacted. So today when we work with issues such as parental wages and working hours, although that’s not directly related to children’s rights, those issues impact children in an indirect way.

You mentioned the Children’s Rights and Business Principles (CRBPs) as a framework that business can use to help prioritize their engagement with children’s rights. How does H&M work with the CRBPs?

In one sense, the CRBPs confirmed that we were doing a lot of good things and doing a lot of the rights things. But what it also provided us with was a 360 degree view of children’s rights issues and business – it prompted us to look at not only what we were doing in one area, but it also made us look at different areas as well.

The CRBPs gives us a very good understanding of what our risks and impacts are and how to best address them. It also looks at children’s rights from a consumer perspective in the marketplace; how do we address children’s rights from a product perspective and from a marketing and communication perspective? That was a new insight for us.

You just touched upon living wages and fair living wages and I know this is a cornerstone of your sustainability framework; but it’s also an incredibly complex subject when you are engaged with dialogue at country level and these countries don’t have the best history of labor negotiations. How do you work with fair living wages and, specifically, what does that mean for children?

The issue of wages is one of the most critical within our industry today but is also really complex. Bearing in mind that we work with suppliers who pay their workers, and they also produce for many other buyers, we are not in a position to set wages for them.

For example, we can only work with creating foundations and fostering dialogue and, in that sense, help promote wages and proper negotiations within the factories. But I think it’s a very good example of how human right also connects very much to children’s rights because, at the end of the day, it’s about making sure that workers can provide for themselves and their families. This is also important for the industry and for the whole country in terms of driving economic growth and social development. This is a great example of where you need to collaborate with others such as with factories, unions and governments.

Looking globally, what sort of footprint does H&M have and what geographic and policy shifts do you see taking place?

Around 80 percent of all production takes place in Asia – Bangladesh, China, Cambodia and India; and then the remaining share is in Europe with Turkey being a large production partner on the European side. The textile industry tends to be a the first entry point to move from an agricultural society into more industrialized one and that means that you end up in in those regions which is fantastic but they are also surrounded by many challenges that you have to face.

What  is one of the biggest challenges, is either a lack, or lack of enforcement of, policies and legislation. That’s why I think the Children’s Rights and Business Atlas is so important. It provides data for decision-makers; it provides a fact-based world view. We need to be having the right conversations that bring together the right people who can really drive policy and create change on a higher level.

Last year we did a short film series that looked at how business can positively impact children. In one of the stories we looked at Chinese migrant workers. How does H&M work with these issues?

That’s another example of where you have a human right that indirectly impacts children in terms of parent’s working hours. In China there is a big transition happening in the textile industry where people from the countryside are migrating from more rural areas to work in the urban textile industry and that means that they leave their children behind at home with their grandparents or with other relatives.

As parents, we can only imagine what that would do to the relationship we have with our children if we had to leave them behind in order to pursue work. You would be missing your children and, of course, it not only impacts the children but also impacts the worker. So we need to be able to provide tools and ways for parents to create closer ties between parents and children despite being so far away.

The issue of transparency is important for Global Child Forum. As you know, we do a global benchmark series that assesses corporations on a variety of indicators. How does H&M work with transparency, follow-up and audits? And what do you do if you find child labor in your in your supply chain?

Since we don’t own factories, it’s important for us to make sure that our suppliers meet our requirements. To ensure this, we do a lot of regular audits; last year we did more than 3,000 audits at our supplier factories. It rarely happens that we find under-age workers, but if we do then we look at the situation and try to determine how we can best help the child in this incident. How can we make sure that they go to school and that the family is compensated for the shortage of income? Of course it’s important to also look at why this happen in the first place and understand how we can work proactively to ensure it doesn’t happen again. But audits are only a snapshot of that factory at that given time so it’s important for us to work also with proactive measures.

As you know, Global Child Forum is marking its 10-year anniversary this year. Instead of looking back 10 years, if we were to look forward 10 years what do you see as some of the more challenging children’s rights issues that we need to be aware of and how can we can start working on solutions already today?

The future is so unpredictable and I think that’s one of the biggest challenges that we face; that you don’t know what’s around the corner. But the two things that make me lay awake at night, one of them is concern for what job creation will look like in the future. Our industry, like so many others, is undergoing massive transformation due to technological advancements and so on. And at the same time, we have a really important role to play to make sure that people have jobs and good jobs so that they can provide for themselves. So how to do that transition in a responsible way is one of the challenges that we will face.

Secondly, H&M, like many other companies, is witnessing the emergence of AI (artificial intelligence) and advanced analytics. And while I think that AI is going to bring about fantastic opportunities, it will also bring forth a lot of challenges. We need to make sure we look at this from a child right’s perspective to see what AI actually means for children.

We are now looking into ensuring that the child-related data that we do get and use is handled properly and in no way negatively impacts children. For example, we need to make sure that children are not being targeted by the wrong communication and, once they become older, we want to use our communication channels to promote diversity, good ideals and values so that we move from trying to avoid harm to really creating positive impact.

Thank you so much, Anna! We have a lot of work to do ahead of us.