Hennes & Mauritz, selling under the brand H&M, is the world’s second-largest apparel company and the biggest buyer of clothes made in Bangladesh. That has put the Swedish retailer in an uncomfortable position after the death of a prominent labor activist a year ago and a garment factory fire that killed more than 100 workers in November.
H&M (HMB:SS) didn’t produce clothes in the Bangladeshi factory, and it encourages workers’ rights through training programs that include short films. Its chief executive, Karl-Johan Persson, even met with the Sheikh Hasina, the Bangladeshi prime minster, last fall to ask the government to raise the minimum wage. Now, in its annual sustainability report, the company has for the first time made public the names and addresses of its suppliers in Bangladesh and 22 other countries, with their permission. (No e-mail addresses or phone numbers, though.) H&M is one of the few retailers to publish this information.
The list, which covers 95 percent of H&M’s production, includes 785 suppliers (166 are in Bangladesh) who in turn operate 1,798 factories. The company says that 148 of those suppliers are “strategic partners,” and they make about half its products. H&M, like other companies, has a code of conduct for its suppliers that covers environmental and social issues. In 2012, it audited 485 potential new factories around the world. Twenty-five percent of them didn’t make the cut. Most of those were in Asia. “We didn’t find the right mindset in terms of transparency,” says Helena Helmersson, the company’s head of sustainability.
Helmersson also said that H&M will be setting up model factories with some of its best suppliers in some of its most important markets, including Bangladesh. This, she says, will give H&M the chance to show it’s possible to run a factory that’s environmentally sound, quality-conscious, efficient, fair to workers, and profitable. The details about that in next year’s annual report should make for interesting reading.