In the wake of public scrutiny over H&M’s failure to meet the commitment that 850,000 workers would be paid a living wage by 2018, H&M commissioned Ethical Trading Initiative (ETI) to perform a review of the brand’s living wage work, which was published in December 2018. Clean Clothes Campaign now wants to balance that picture by laying out key shortcomings of the review that are strongly intertwined with the shortcomings of H&M’s roadmap itself, and even more so with the way H&M approached its implementation.

Clean Clothes Campaign International office was one of the stakeholders that ETI contacted in its research phase. Some of our assessments of H&M’s living wage work are now reflected in ETI’s “Review of H&M group’s Roadmap to fair Living Wage”, and we agree with most of ETI’s recommendations.

However, we were surprised to note that some essential information is not highlighted strongly enough or is completely missing from the Review. We believe that including this information would have led to additional findings and recommendations.

Not a single worker is making a living wage!

There are strong reasons to be critical of H&M’s roadmap and the lack of progress on delivering actual wage improvements. Yet, the Review does not pursue those avenues, not even on issues that ETI has expressed similar views on as we we hold at the CCC. Instead, the Review offers excuses for why the pace of progress has been so slow, and why workers at H&M supplier factories are still far from earning living wages.

Contrary to ETI’s assessment, we consider the way that H&M has been communicating about its living wage work to be an attempt to obfuscate original commitments and skirt responsibility. We documented some specific examples in “Lost and found: H&M’s living wage roadmap”.

Furthermore, we find a number of indicators that H&M has presented as relevant for the pursuit of a living wage – and ETI adopted in the Review – to have little or nothing to do with what was described in the original roadmap and with actual wage improvements for workers.

One can argue about whether or not alternative strategies would be likely to produce better results. Regardless of where one stands on this point, however, it is an undeniable fact that H&M has so far failed to guarantee respect for a core human right that is also included in H&M’s own base code of conduct.

That is a massive and urgent problem that the Review did not address, thereby giving H&M further room for handling this issue as a public relations exercise. For example, H&M’s press release in September 2018 that also announced the ETI evaluation was titled “H&M Group reaches close to a million workers with its Fair Living Wage Strategy”, despite the fact that this so-called strategy has not led to a single worker actually making a living wage.

In sum, we found the following key shortcomings in the Review:

1. Instead of the original roadmap documents, ETI presented an edited version in the Review, thus omitting several specific goals that H&M did not meet, including the commitment for 850,000 workers to be paid a living wage by 2018.
2. ETI blames the lack of progress on “clumsy communication”, but as a multi-billion dollar company H&M has sufficient resources to ensure that their communication is clear and consistent. There are other reasons to believe that what is interpreted as “clumsiness” was, in fact, intentional.
3. Instead of evaluating whether H&M has made meaningful progress on wages, the Review praises H&M for simply trying, without acknowledging that actual progress would require changes to the way H&M operates its supply chain.
4. ETI allows H&M to evade responsibility for ensuring that human rights, including the right to a living wage, are respected in its supply chain, thereby ignoring the UN Guiding Principles for Business and Human Rights.
5. Despite acknowledging that the mechanism of freely elected worker representatives has serious downsides, ETI does not critically assess H&M’s use of this mechanism as an indicator in its living wage work.

What needs to happen

We have repeatedly called on H&M to take concrete steps toward a living wage actually being paid to workers, namely:

• Publish a detailed road map on wage increases, with time-bound, measurable wage level increase targets and time-bound actions in the field of purchasing practices.
• Invest in long term, sustainable relationships with factories.
• Invest in measurable and transparent changes in real wages of workers in the H&M supply chain.

We have also repeatedly called for transparency, as this is another area where H&M strayed off course it chartered in 2013. Instead of getting ever more nontransparent, as it is currently the case, H&M needs to publish the following:

• Information on the living wage pilot projects carried out as part of H&M’s commitment, including concrete factory information, wage level and development through time at each factory, and lessons learned.
• Definition of a “fair living wage” as well as information on the proposed methodology to calculate a “fair wage” and to make sure that it is actually paid.
• Based on the above definition, minimum acceptable wage levels – in concrete terms – for all H&M’s production countries.
• Detailed information about efforts made within existing living wage initiatives such as ACT.
• A cost breakdown of the pricing structure, specifying how labour costs are calculated at present and how that is different from before H&M’s living wage commitment was made,including information on how much more H&M is paying to suppliers to ensure that FOB-prices are high enough to pay all workers the “fair wage”. (Note: FOB stands for “free on board”, which is a price that includes all costs up to placing the garments aboard a ship an overseas vessel.)

In addition, H&M should regularly publish up-to-date information on wages paid at each supplier factory, so that progress toward the specific wage increase targets can actually be measured.

We urge ETI to take these points on board in all future work with H&M and other garment brands.

You can read the full response to ETI’s review of H&M’s living wage work here