Stakeholder Trends and Insights
H&M Trying to Prove 'Ethical Fast Fashion' Is Not an Oxymoron

In the context of the huge market for fast, disposable fashion, H&M’s brand promise to offer quality fashion at the best price might seem like an oxymoron. But the brand is determined to make good on its goal to “provide fashion for conscious consumers” by making quality clothing more widely accessible.

"We want to make sustainable fashion more democratic," Helena Helmersson, H&M's head of sustainability, told Reuters last week. "We don't aim for sustainability to be a luxury thing.”

But are consumers buying it (so to speak)? Not according to several reports that rank brands according to customer perceptions of their ethical practices.

In May, the Serviceplan Group — a German company that conducts an annual survey on companies' reputations — released its third annual "Sustainability Image Scores" (SIS) survey, which shows the effect of sustainability initiatives on a company's image, consumers' willingness to buy and customer loyalty, and how the company's sustainability efforts and the marketing of those efforts are perceived by consumers and brand users. H&M eked in at #102 of the 103 companies ranked.

In keeping with Serviceplan’s findings, H&M placed similarly dismally in Brandlogic & CRD Analytics’ most recent (2012) Sustainability Leadership Report, which comprehensively scores and compares real and perceived sustainability performance for 100 leading global brands. Its first year on the list, H&M appeared in the “Laggards” category, reserved for brands that fall below the mean on both their sustainability perception score (SPS) and their sustainable reality score (SRS), on which the retailer received a 40.8 and 38.0, respectively.

"What hurts H&M is an assumption that they must be exploiting their workers because they produce cheap clothes," said Joachim Schoepfer, head of corporate reputation for the Serviceplan agency.

Granted, the Brandlogic/CRD report is about a year-and-a-half old at this point, and since then the Swedish retailer has been featured prominently in the press for its sustainability efforts in a variety of areas — from sourcing of materials such as cotton (H&M is the world’s biggest user of organic cotton); to conserving water and eliminating toxic chemicals, to collecting used clothing for recycling into new; to committing to higher standards for worker safety and wages.

H&M’s Conscious Collection, which debuted in 2011, incorporates organic cotton, linen, hemp and jute and recycled polyester, wool, plastic and other materials. But the fact that the company sources most of its clothing from factories in China and Bangladesh, where average wages are a far cry from what would be considered livable in Western countries, likely accounts for a disconnect for consumers between “ethical” and cheaply made “fast fashion.”

“There is a misconception that lower prices in the stores mean bad working conditions or less pay," Helmersson went on. "Made in Bangladesh' is something that I'm proud of. Our presence in Bangladesh is coming with so much positive impact if you think about the alternative jobs for women in Bangladesh."

The brand admitted its commitment to pay all textile workers a living wage could lead to higher prices, but would that dissuade even their loyal customers from supporting the brand? Recent studies show a rise in the number of Aspirational consumers, a group nearing 2.5 billion worldwide that consider style, social status and sustainability when shopping. This combined with a recent survey H&M says has found that 47 percent of its customers were interested in more environmentally friendly products in 2013, up from 27 percent in 2012, should protect the brand from backlash should slight price increases prove necessary.

So what’s missing? If in a world of ever-increasing corporate transparency H&M walks its talk, and creates and lives up to new standards for the “ethical fashion” industry to follow, consumer perceptions should begin to align more closely with the brand’s reality.