EMPTY STATE
COMPARISON TOOL

H&M 65/100

(NYSE:HBI) 7 of 43 (2018)

Hennes & Mauritz AB (H&M), a Sweden-based apparel company with stores in 70 markets and e-commerce in over half of these markets, ranks seventh out of 43 companies. It discloses more information on its forced labor policies and practices than its peers across all themes. Since 2016, the company has taken some additional steps to address forced labor risks in its supply chains. Since 2016, H&M has engaged with additional local stakeholders, such as the Turkish government and NGOs, with the aim to improve refugees' access to work permits. The company also joined the Mekong Club, an industry initiative focused on addressing modern slavery. Further, it conducted training on forced labor for its teams in Cambodia and Vietnam. Notably, H&M commits to training its first- and second-tier suppliers in Vietnam on forced labor going forward. The company has particularly robust disclosure on the themes of Commitment & Governance and Traceability & Risk Assessment. Additional steps H&M could take to address forced labor risks in its supply chains include strengthening its disclosure and practices on the themes of Purchasing Practices, Recruitment, and Remedy.

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65 /100

2018 Ranking: 7 of 43

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69

H&M was evaluated both in 2016, when it ranked third out of 20 companies, and in 2018, when it ranked seventh out of 43 companies. Since 2016, the company has taken some additional steps to address forced labor risks in its supply chains, including engaging with additional local stakeholders such as the Turkish government and NGOs with the aim to improve refugees' access to work permits, joining the Mekong Club (an industry initiative focused on addressing modern slavery), and conducting training on forced labor for its teams in Cambodia and Vietnam.

2016 BENCHMARK

65

The average score for the sector was 37/100 compared to 49/100 in 2016. The number of companies assessed in 2018 increased from 20 to 43. Since 2016, the methodology has been strengthened, making it more difficult for companies to achieve the same score. The 19 companies benchmarked in both 2016 and 2018 saw their average score increase from 49/100 to 56/100, which is significant given the changes to the methodology.

METHODOLOGY

2016

69

H&M was evaluated both in 2016, when it ranked third out of 20 companies, and in 2018, when it ranked seventh out of 43 companies. Since 2016, the company has taken some additional steps to address forced labor risks in its supply chains, including engaging with additional local stakeholders such as the Turkish government and NGOs with the aim to improve refugees' access to work permits, joining the Mekong Club (an industry initiative focused on addressing modern slavery), and conducting training on forced labor for its teams in Cambodia and Vietnam.

2016BENCHMARK

2018

65

The average score for the sector was 37/100 compared to 49/100 in 2016. The number of companies assessed in 2018 increased from 20 to 43. Since 2016, the methodology has been strengthened, making it more difficult for companies to achieve the same score. The 19 companies benchmarked in both 2016 and 2018 saw their average score increase from 49/100 to 56/100, which is significant given the changes to the methodology.

METHODOLOGY

THEME AND INDICATOR SCORE

The benchmark methodology has seven themes, selected to capture the key areas where companies need to take action to eradicate forced labor from their supply chains. There are a total of 23 indicators across the seven themes. For each theme, a company can score a total of 100 points.

Commitment and Governance

This theme evaluates a company's commitment to addressing forced labor, whether it discloses supply chain standards, and to what extent it has management processes and board oversight, training programs, and engagement with stakeholders on forced labor in place.

OVERALL 94
INDICATORS
Commitment
100
Supply Chain Standards
70
Management and Accountability
100
Training
100
Stakeholder Engagement
100

Traceability and Risk Assessment

This theme measures the extent to which a company demonstrates an understanding of its suppliers and their workforce by disclosing relevant information (such as supplier names or sourcing countries) and assesses and discloses forced labor risks across its supply chains.

OVERALL 94
Traceability
87.5
Risk Assessment
100

Purchasing Practices

This theme assesses to what extent a company adopts responsible purchasing practices (such as providing price premiums and procurement incentives) and integrates supply chain standards into supplier selection and supplier contracts, and whether it cascades them down the supply chain.

OVERALL 63
Purchasing Practices
75
Supplier Selection
75
Integration into Supplier Contracts
0
Cascading Standards through the Supply Chain
100

Recruitment

This theme measures a company's approach to reducing the risk of exploitation of supply chain workers by recruitment agencies, eliminating workers' payment of fees during recruitment processes throughout its supply chains, and protecting the rights of migrant workers.

OVERALL 38
Recruitment Approach
0
Recruitment Fees
50
Monitoring and Ethical Recruitment
0
Migrant Worker Rights
100

Worker Voice

This theme measures the extent to which a company engages with workers in its supply chains, enables freedom of association, and ensures access to effective and trusted grievance mechanisms.

OVERALL 64
INDICATORS
Communication of Policies
100
Worker Voice
25
Freedom of Association
100
Grievance Mechanism
30

Monitoring

This theme evaluates a company's process for auditing suppliers, including whether audits include non-scheduled visits, review relevant documents such as wage slips or contracts, interview workers, and audit lower-tier suppliers and provide disclosure on the outcomes of supplier audits.

OVERALL 65
Auditing Process
70
Audit Disclosure
60

Remedy

This theme measures the extent to which a company has corrective action plans and processes for non-compliant suppliers and ensures remedy is provided to workers in its supply chains who are victims of forced labor. Publicly available allegations of forced labor in a company's supply chains that occurred in the past three years, and how a company has responded to and addressed those allegations, are also assessed as part of this theme.

OVERALL 38
Corrective Action Plans
75
Remedy Programs and Response to Allegations
0

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