In March 2011, H&M reported a 30% drop in profits. They blamed a combination of high cotton prices (140% rise in the previous 6 months), increasing transportation costs and rising wages in Asia for the slump (Reuters, 2011) (BBC, 2011). The cost increases have not been passed onto the consumer as H&M do not want to undermine their operating model. In fact during this potentially difficult time, H&M have been focusing on their ventures into a more sustainable fashion industry. The Water Collection, The Conscious Collection and The Waste Collection are all recent forays into the world of sustainable and ethical fashion from H&M, whose business model is based on high turnover at low prices – to bring fashion and quality at the best price (H&M, 2011). With around 2200 stores in over 40 markets, it is one of the largest clothing retailers in the world (H&M, 2011). H&M benefits from the development of a globalised fashion industry allowing it to offer the same clothing from Milan to Manila, as the world splits into what they refer to as “global tribes” (The Economist, 1998).
The Water Collection is a yearly collaboration that has been in existence since 2002. 25% of the profits are donated to WaterAid who use the proceeds for sanitation, hygiene and a safe supply of water. The summer 2011 collection expanded its range to include the whole family after previously been formed as a women’s wear only offer. H&M have helped raise over £1.7million pounds for the charity (WaterAid, 2011). Perhaps conscious of the negative press they received in New York only a year previously, H&M made a very shrewd decision to upcycle the leftover fabrics from the collection with fashion powerhouse Lanvin. H&M alongside fellow budget retailer, Wal-Mart, were found to have dumped unsold stock, mutilating them deliberately so that passers-by would not be able to take advantage of free products. Fingers of gloves were cut off and men’s coats slashed releasing the down filling, making the coat ineffectual against the New York winter. The Waste Collection consisted of 12 pieces and played some role in restoring confidence to the H&M brand as it featured both in traditional newspapers and on sustainability websites (Cheeseman, 2011).
The Conscious Collection was launched to coincide with Earth Month in 2011. This served to highlight the on-going developments that H&M have been making in terms of diversifying their materials use, creating collections out of organic cotton, organic linen, Tencel and recycled Polyester. Yet unlike the previous collections this will be a permanent fixture in the H&M calendar, appearing at different times throughout the year, demonstrating perhaps the changing image of sustainable and ethical fashion.
Each collection deals with a slightly different area of sustainability, highlighting both the complexity and the opportunities related to sustainable and ethical issues within this sector. As recently as January 2010, H&M had been in the newspapers for what one could consider as unethical behaviour in New York. This happened even as H&M were happy to remind the public that they are saving paper and reducing the size of tags on clothing (Dwyer, 2010) (Sherwell, 2010). In the same year, H&M were also found to be using genetically modified cotton in their organic cotton collection, though that was not through any fault of their own but as a result of massive fraud within the Indian textile industry (Grassegger & Brambusch, 2010). Although the Organic Exchange (now Textile Exchange) came to their defence, H&M have admitted problems in this area where they have set themselves key targets (Organic Exchange, 2010). There was also a belief that companies were not doing enough to monitor the situation.
The adverts for H&M are generally very simple – usually a woman in an beautiful location wearing one of their items and a price tag; very simple because the most important things are the style and the price tag. Yet at that price there is a trade-off being fashionable and environmental impact. So the question that is the most difficult in terms of creating a sustainable and ethical fashion industry relates to that trade-off. How can a company be sustainable when it produces clothing according to trend; clothing that is not built to last? The clothing must still go through the usual processes – cotton production, transportation for ginning, fabric creation, dyeing processes, and transportation of fabrics to factories to be converted into clothing. It goes through exactly the same process using the same methods as high quality materials. The difference lays in the quality of the final material used. The simplest answer to that is to say: if we are producing for a fast fashion market, is it not better that companies produce in a sustainable way?
With H&M expanding rapidly into Asia, there will be even more demand for their products in an increasingly difficult climate. On one hand, their response to sustainable and ethical issues is to be commended, but these items represent a small fraction of what they produce as a company. In the long term though, climate change impacts will severely affect the ability of companies to benefit from the low budget business models as firms will no longer be able to absorb the increases in commodity prices. Even though H&M exceeded their targets for organic cotton use in 2010, aided by the Better Cotton Initiative program, the fact that there is a limited supply of organic cotton is very much an issue, especially as Wal-Mart and Ikea start to make similar promises. The 77% increase in cotton use made H&M one of the largest users of organic cotton in the world. Yet, H&M are very much aware of the upcoming problems and have realigned their targets to source cotton more sustainably rather than to only source organic cotton. They have also increased their use of recycled materials and are playing an active role in the Sustainable Apparel Coalition. At the same time they have also announced an end to sandblasting of all products (H&M, 2011) (Environmental Leader, 2011).
The case of H&M demonstrates one of the key struggles with which companies must contend. Despite the steps that the company has made in setting targets for sustainable goals, the use of the products made from those achievements remains problematic. If the company is going to continue depending on rapid turnover of customers and products, how responsible are they for the waste that they produce? More telling still is the fact that H&M’s training of factories should improve the standards, the know-how and the capacity of factories and suppliers to charge higher prices for their goods meaning that H&M are effectively increasing their own prices in the longer term. At the same time one could argue that the training conducted in conjunction with suppliers and factories will in fact lead to an increase in efficiency and further reductions in prices.