From Old-Fashioned to Trend-Setters
- How H&M’s CSR Work has Developed over Time
Master’s Thesis 15 credits Department of Business Studies Uppsala University
Spring Semester of 2020
Date of Submission: 2020-06-03
Saga Bowallius
Rebecca Samuelsson
Supervisor: Shruti Kashyap
Abstract
Background: Corporate Social Responsibility has been studied since the 1970s, but was originally controversial and met opposition from e.g. Milton Friedman who viewed a company’s responsibility as being strictly economic. Since then, CSR has grown in scope and importance, especially within the fast fashion industry, and is now a central part of academia and business operations. However, the debate whether companies’ responsibilities are only economic or also include responsibilities such as social, environmental, and transparency- related is still ongoing, and it is therefore interesting to study how companies view their own responsibilities.
Purpose: Our research aims to fill the existing research gap regarding how companies view their responsibilities by providing an overview of how the CSR work has changed over time in fast fashion companies.
Research Question: How has the focus of the CSR work changed over time in large, international, fast-fashion companies?
Methods: A qualitative content analysis inspired by grounded theory was used to answer the research question. The data material consisted of H&M’s sustainability reports from 2002, 2005, 2008, 2011, 2014, 2017 and 2019. The material was categorized into social, environmental or transparency dimensions, along with several under-categories. A simpler analysis of news articles regarding sustainability during the period 2002-2019 was also performed.
Results: The results suggest that the fast fashion industry has increased their sense of responsibility as the expectations of stakeholders in the area has grown, and that CSR work increasingly is seen as a possible competitive advantage. The results also show that the most difficult parts to fulfill is the ethical level of the CSR pyramid, due to the difficulty of comprehending and fulfilling the stakeholders’ different expectations and demands, and the social dimension, because of its profound complexity, especially within fast-fashion.
Keywords: CSR, Sustainability, Sustainability Reporting, Stakeholder Theory, H&M, Fast Fashion
Key Concepts
Fast fashion: Clothes that are made and sold cheaply, so that people can buy new clothes often.
Instead of having two seasons, fast fashion gives consumers new variations every week.
(Cambridge Dictionary, 2020)
CSR/Sustainability: Researchers have not come to an agreement of a unilateral definition of CSR, however a generally accepted theory is Carroll’s CSR pyramid (Dahlsrud, 2008). A common definition of CSR describes that companies have economic, legal, and ethical responsibilities (Carroll & Schwartz, 2003; Carroll, 1991). In our thesis we use the concepts of CSR and Sustainability interchangeably.
CSR/Sustainability reports: Corporate social responsibility reports are attempting to serve one essential purpose: they portray the relationship between a corporation and society. They seek to improve communications between the corporate world and the broader society within which companies report. (Boston College - Center for Corporate Citizenship, 2010)
Table of Contents
1. Introduction _____________________________________________________________ 1 1.1 Disposition _____________________________________________________________ 3 1.2 Purpose & Research Question _______________________________________________ 4 2. Theory & Literature Review _______________________________________________ 5 2.1 Stakeholder Theory _______________________________________________________ 5 2.1.1 Special Interest Groups ______________________________________________ 7 2.1.2 Government _______________________________________________________ 7 2.1.3 Media ____________________________________________________________ 7 2.2 CSR Over Time __________________________________________________________ 7 2.3 The CSR Pyramid ________________________________________________________ 9 2.4 The CSR Dimensions ____________________________________________________ 11 2.4.1 The Social Dimension ______________________________________________ 11 2.4.2 The Environmental Dimension _______________________________________ 11 2.4.3 The Transparency Dimension ________________________________________ 12 2.5 Operationalization of Conceptual Framework _________________________________ 12 3. Industry & Case Background _____________________________________________ 14 3.1 CSR & Fast Fashion _____________________________________________________ 14 3.2 H&M _________________________________________________________________ 15 3.2.1 H&M’s View of CSR _______________________________________________ 16 3.2.2 H&M’s Vision ____________________________________________________ 16 3.2.3 H&M Way of Work ________________________________________________ 16 3.3 Summary ______________________________________________________________ 18 4. Method ________________________________________________________________ 19 4.1 General Methodological Choices ___________________________________________ 19 4.2 Data Sources ___________________________________________________________ 20 4.3 Analytical Approach _____________________________________________________ 22 4.4 Triangulation of Data ____________________________________________________ 23 5. Empirical Findings ______________________________________________________ 25 5.1 Social _________________________________________________________________ 25 5.1.1 Profitability _______________________________________________________ 25 5.1.2 Government ______________________________________________________ 25 5.1.3 Supply Chain _____________________________________________________ 26 5.1.4 Special Interest Groups _____________________________________________ 28
5.1.5 Employees _______________________________________________________ 29 5.1.6 Customers ________________________________________________________ 30 5.1.7 Communities _____________________________________________________ 31 5.2 Environment ___________________________________________________________ 32 5.2.1 Profitability _______________________________________________________ 32 5.2.2 Government ______________________________________________________ 33 5.2.3 Supply Chain _____________________________________________________ 33 5.2.4 Special Interest Groups _____________________________________________ 34 5.2.5 Customers ________________________________________________________ 35 5.2.6 Communities _____________________________________________________ 36 5.3 Transparency ___________________________________________________________ 38 5.3.1 Government ______________________________________________________ 38 5.3.2 Supply Chain _____________________________________________________ 39 5.3.3 Special Interest Groups _____________________________________________ 39 5.3.4 Customers ________________________________________________________ 40 5.4 Summary ______________________________________________________________ 40 6. Analysis _______________________________________________________________ 42 6.1 Economic ______________________________________________________________ 42 6.2 Legal _________________________________________________________________ 43 6.3 Ethical ________________________________________________________________ 44 6.4 Philanthropic ___________________________________________________________ 47 6.5 General Analysis ________________________________________________________ 48 7. Conclusions ____________________________________________________________ 50 8. Limitations & Further Research ___________________________________________ 52 9. References _____________________________________________________________ 53 Appendices _______________________________________________________________ 58 Appendix I ________________________________________________________________ 58 Appendix II _______________________________________________________________ 59 Appendix III ______________________________________________________________ 60 Appendix IV ______________________________________________________________ 61
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1. Introduction
Over the past years, financial information has become increasingly insufficient in understanding a company’s performance. In order to provide a fairer view of company performance, an increasing amount of non-financial disclosures have been incorporated into firm reporting practices. One increasingly popular form of firm disclosure in this context consists of reporting on the work within Corporate Social Responsibility that companies do.
Corporate Social Responsibility (CSR) has been studied since the 1970s (Carroll, 1979). It was originally controversial, and was strongly opposed by researchers such as Milton Friedman (1962), who viewed a company’s responsibility as being strictly economic. Over the decades since then however, CSR has grown in scope and importance, and is now a central part of academia and business operations. However, the debate whether companies’ responsibilities are only economic or also include responsibilities such as social, environmental, and transparency-related is still ongoing (Grafström, Göthberg & Windell, 2015). It is therefore interesting to study how companies view and portray their own responsibilities.
One industry wherein CSR is especially important is the fashion industry (Perry & Towers, 2013). Because it is an industry which is both globalized and highly competitive these factors contribute to the increase in importance of CSR work (Arrigo, 2013; Sumner, 2018). The sub- branch of the fashion industry referred to as fast fashion, within which companies like H&M operate, has rapidly become a large segment. Fast fashion is more responsive to trends and a more agile form of fashion compared to the conventional (Gupta & Gentry, 2018). Accordingly, fast fashion launches up to 20 seasons compared to two seasons, per year, of the conventional fashion company, alongside with low prices and controlling the supply, creates manipulated scarcity which results in ‘must have items’ and the promotion of consumption (Birtwhistle &
Moore, 2007). However, in order to maintain this agility and responsiveness, fast fashion companies have rearranged their supply chains and production, affecting both workers in the production unit as well as the environment in a negative way (Becker-Leifhold & Heuer, 2018).
For example, producing synthetic fibers requires many hazardous chemicals that are a danger to both workers and the environment (Lynch, 2009). These changes towards the promotion of consumption in the fast fashion industry have increased the need for companies to take a bigger
2 responsibility in their CSR work since they have been criticized for not doing enough good (Anguelov, 2016).
From a societal perspective, CSR disclosures have risen in importance over the past years, including in the fast fashion industry. In Sweden for example, a 2019 study by Svensk Handel indicates that Swedish consumers express that it is of increasing importance to them that fashion products are made in a sustainable way. In the study, which measured how important Swedish consumers considered sustainable products to be, fashion was ranked as the third most important product category, with only sustainable food and beauty products being considered to have more importance than fashion products (ibid.).
Despite the above identified demand for better CSR disclosures, there continues to be a general lack of CSR research in the fast fashion industry (Arrigo, 2013). In particular longitudinal studies of CSR are seldom performed (Aguinis & Glavas, 2012). Since CSR is an increasingly crucial and rapidly changing topic (Grafström, Göthberg & Windell, 2015), and with the indications of the growing importance of CSR in the fashion industry from both companies and consumers (Sumner, 2018; Svensk Handel, 2019), more research on this topic is needed. The work that will be undertaken in this thesis aims at addressing this important research gap.
This study is a qualitative study that seeks to answer the question How has the CSR work changed over time in large, international, fast-fashion companies? and in order to execute this investigation, a longitudinal case study approach was taken and the data was analyzed by using a qualitative content analysis method. We have used the representative, for the fast fashion industry, case company - H&M, which is a large, multi-national, family-owned fast fashion firm (Giertz-Mårtensson, 2012). The study was done through a periodic selection of H&M’s sustainability reports from 2002-2019 in combination with a media coverage search and analysis from the same period. This was done in order to achieve triangulation of the collected data. H&M published their first standalone CSR report in 2002 and has produced yearly reports on the topic every year since. During the same time, H&M has gone from operating in 14 markets (H&M, 2002a) to 74 (H&M, 2019a), and has become the second or third largest fast fashion company measured in revenue, depending on current exchange rates (Gestalt & Garcia, 2019). Studying H&M provides the literature with important indications of how the fast fashion industry in general views their societal responsibilities and how the CSR work has changed over time. The study specifically looked at different CSR dimensions (i.e. Social,
3 Environmental, and Transparency) as well as different levels of Archie B. Carroll’s (1979) pyramid of CSR (i.e. Economic, Legal, Ethical, and Philanthropic).
The analysis shows that the economic and legal levels of Archie B. Carroll’s (1979) CSR pyramid have been fulfilled by H&M in all the years under study, and within all three dimensions (social, environmental or transparency). The ethical and philanthropic levels of the pyramid were increasingly fulfilled across the time-period studied, although the fulfillment of the ethical level within the social dimension was negatively affected by scandals relating to supply chain workers’ rights and advertisements. The results generally suggest that the fast fashion industry has increased their sense of responsibility as the expectations of stakeholders in the area has grown. There is also a clear indication that CSR work is increasingly being seen as a possible competitive advantage for fast fashion firms such as H&M. The most difficult part in fulfilling the CSR pyramid is the ethical level, due to the difficulty of comprehending and fulfilling the stakeholders’ different expectations and demands. Within the fast fashion industry, the expectations within the supply chain dimension seems especially difficult to comply with, because of their profound complexity.
1.1 Disposition
The disposition of our study is as follows; In Section 1 we introduce our research question and the motivation behind our study as well as a brief overview of the methodology and results of the study. In Section 2 we present the theories, concepts and prior literature, that makes up our conceptual framework in this study and an overview of how this framework is operationalized in the analysis. In Section 3 Industry & Case Background - we present some important background information about CSR in relation to Fast Fashion, as well as a history of the case company. In Section 4 we present the methodological approach of this study in greater detail from how the data collection was performed to how the analysis took form. Section 5 lays out the data that we have collected from both the sustainability reports and the media coverage.
This section takes the structure of the themes that became clear to us from the coding of the data. In Section 6 we use our conceptual framework and apply and contrast it to the empirical findings. In Sections 7 & 8 we present our conclusions from the study as well as limitations of it and propose ideas for future research based on our conclusions and limitations.
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1.2 Purpose & Research Question
Our research aims to fill the existing research gap regarding how companies view their responsibilities by providing an overview of how the CSR work has changed over time in fast fashion companies. To do this, the study has analyzed how sustainability work in the fast fashion industry has developed during the period 2002-2019 in order to answer the following research question.
How has the focus of the CSR work changed over time in large, international, fast-fashion companies?
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2. Theory & Literature Review
In the following section we present the theories that make up the conceptual framework used in this study in order to further investigate: How has the focus of the CSR work changed over time in large, international, fast-fashion companies? This section starts with an explanation of Stakeholder Theory which is the overarching theory of the thesis. The theory is used to explain the changes in CSR that become evident in the data material. Then, a more detailed description of CSR development over time in the literature is presented. This is followed by the CSR pyramid and continues with the three dimensions of CSR that we have found in our empirical process. The section ends with an explanation of how we have operationalized these theories in the study.
2.1 Stakeholder Theory
Traditionally, company success has been measured by financial measures such as stock price or earnings per share. This means that any action or inaction performed by the company had to be justified to the stockholders (Freeman & Reed, 1983). This is still the perspective of shareholder theory, which suggests that the firm’s only moral responsibility is to provide return to its financiers, as long as they do not engage in deception or fraud (Smith, 2003).
The stakeholder concept first coined in 1963 by the Stanford Research Institute, proposes that companies also have responsibilities to other groups (Freeman & Reed, 1983). The managers are viewed as agents for all stakeholders, and have to ensure that none of the stakeholder’s ethical rights are violated and make decisions that are in the best interest of all stakeholders (Smith, 2003). Furthermore, Smith (2003) also argues that these two responsibilities exist in order to ensure a balance between profit maximization and long-term survival of the company.
According to Freeman, Harrison & Wicks (2007), the stakeholders (see Figure 1 next page) are those that “can affect or are affected by the corporate activities” (p. 242) and can be divided into primary and secondary stakeholders. Primary stakeholders are the ones that have a direct stake in the company, which the company relies on for existing in the short term. The secondary stakeholders lack this importance, but can still have a varying degree of influence on the company’s future (Freeman, Harrison & Wicks, 2007).
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However, a relation does not have to be direct to be important. One example of this is special interest groups, that usually examine companies’ actions and compile the information in reports that are sent to other stakeholders. These reports can then have a large influence on other stakeholders’ behavior, especially if they result in a scandal in the media (Grafström, Göthberg
& Windell, 2015, p. 76). The relationship between the company and the stakeholders are also bidirectional. One way that the company can for example affect the stakeholders through lobbying, applying voluntary standards and through cooperation (Grafström, Göthberg &
Windell, 2015).
The ultimate power of implementing CSR practices or not lies of course with the company itself, which can be either reactive or proactive (Grafström, Göthberg & Windell, 2015, p. 105).
Nevertheless, according to Grafström, Göthberg & Windell (2015), the power, legitimacy, and urgency of each stakeholder and its demands determine which stakeholders are the most important to a company, and based on this, companies prioritize between the sometimes- conflicting demands. So as companies, stakeholders and their interplay change over time, the societal trends and expectations of companies evolve, and companies have to adjust in order to achieve legitimacy (ibid.).
Figure 1. The different stakeholders. (Source: Freeman, Harrison & Wicks, 2007, p. 7)
7 The most important stakeholders when it comes to CSR are special interest groups, government and media (Grafström, Göthberg & Windell, 2015).
2.1.1 Special Interest Groups
Special interest groups are privately owned non-profit organizations which aim to work for a special set of interest, and thereby contributing to common good. Many special interest groups focus on human rights or the environment and perform studies, develop guidelines and/or consult with companies. One reason for the importance of special interest groups is that states, media and other stakeholders increasingly pay attention to their knowledge and demands.
(Grafström, Göthberg & Windell, 2015, p. 87-90) 2.1.2 Government
Because of their ability to create laws, states are naturally an important stakeholder for companies. CSR work, however, is much driven by voluntary action, although legal obligations have increased over the years. (Grafström, Göthberg & Windell, 2015, p. 90-94)
2.1.3 Media
Attention from the media makes some issues become more important than others. They often report on the sustainability work of the United Nations, and the reports created by special interest groups. The media can be seen as having an interest in the company, but also work as an intermediary that other stakeholders use in order to achieve their interests. They help set the agenda for society at large, and have increased their focus on CSR in the 21st century.
(Grafström, Göthberg & Windell, 2015, p. 94-98)
2.2 CSR Over Time
The concept of corporate social responsibility (CSR) started to take form in the 1950’s, but was then referred to as social responsibility (SR). Compared to today’s broad definition of the concept, it was a narrower definition. It was a notion that top managers should act in the best interest of certain groups that were associated with the company (Carroll, 2008). Those groups were mostly the employees, philanthropy-recipients, and stockholders (ibid.).
Some scholars, on the other hand, were against the notion of a company having any social responsibility at all. Friedman (1962) argued that the only social responsibility a company has
8 is to its; stockholders, and maximizing their profits. Although this debate is still ongoing, it is clear that more and more companies manifest a will to take societal responsibilities in different ways (Grafström, Göthberg & Windell, 2015).
From the earlier days up until the 1970s’ CSR was more about discussing and spreading the knowledge of social responsibility that companies have, and less about real actions from the companies. During the 1970s’ the base of what we today consider the definition of CSR to be was founded from, e.g. Archie B. Carroll’s four-parted definition of CSR. Which later became the CSR pyramid consisting of; economic, legal, ethical, and philanthropic responsibility (Carroll, 1979).
From the 1980s’ the concept of CSR has shifted its main focus, to a much broader sense. More components were incorporated in CSR, environmental issues amongst many others. And took on a more stakeholder direction, instead of merely concentrating on a few groups. Globalization and an increase in competitiveness between companies, have put CSR in a position where a company can have a competitive advantage by working with CSR, transforming it into; value creating actions and firm performance (Carroll, 2008; Ferramosca & Verona, 2020).
Globalization created new issues to be handled for companies, not just handling domestic issues but also having to take responsibility in other countries as well (Carroll, 2015). Previous research has also shown that companies that do include Corporate social responsibility information in their annual reports “have better corporate governance ratings; are larger; belong to higher profile industries; and are more highly leveraged” (Chan, Watson & Woodliff, 2014, p. 59).
The idea of a company's rights and obligations are continuously debated and perceptions change over time, and the idea of companies being responsible towards society has increased over time.
The biggest increase can be seen in large, publicly traded companies in the late 1990 and onwards. Which is affirmed by Gray, Kouhy & Lavers (1995), who showed that larger companies tend to have more CSR work. Moreover, another reason for this change are the scandals, such as Enron’s accounting scandal that led to the company’s bankruptcy, and the campaign against Nike’s use of cheap labor in developing countries, which also had an effect on the clothing industry as a whole (Grafström, Göthberg & Windell, 2015, p. 17-18).
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2.3 The CSR Pyramid
Archie B. Carroll has been a prominent researcher within the field of Corporate Social Responsibility (Baden, 2016; Dahlsrud, 2008). Carroll (1991) argues that firms have gone from having a strictly economic responsibility, to having to obey the law, to having additional stakeholders such as employees and the environment. With this as the basis, Carroll has created the pyramid of CSR, which aims to characterize a firm’s CSR work in a way that is useful for finding the balance between different stakeholders. Figure 2 illustrates the pyramid which consists of four levels of responsibility; economic, legal, ethical and philanthropic (Carroll, 1991).
Figure 2. The pyramid of Corporate Social Responsibility. (Carroll, 2016, p. 5)
Economic responsibilities. The economic responsibilities are considered the basis of all business. Even CSR has to be based on economic sustainability in order to be legitimate. A firm’s basic role is to produce goods or services and produce an acceptable profit. (Carroll, 1991)
Legal responsibilities. In addition to economic responsibilities, the firm’s operation has to follow the law. These set out the fundamental ideas of fair operations, these responsibilities are
10 seen as “codified ethics” (Carroll, 2016). The legal level is, together with the economic responsibilities, the principal concepts that a firm has to follow.
Ethical responsibilities. The ethical responsibilities include the standards, norms and expectations that consumers, employees, shareholders, and other parts of the community view as fair but are not included in law. These ethics and values change faster than the laws, since they are the guiding force behind the creation of laws. These ethical responsibilities are therefore dynamic and often debated in society since, and can therefore be difficult for companies to address. (Carroll, 1991; Carroll, 2016)
Philanthropic responsibilities. The last level includes active participation in contributing financial or human resources to improve the quality of life in communities. Unlike ethical responsibilities, however, the philanthropic level of CSR action is not expected, however it is appreciated. Therefore, Carroll (1991) argues that this is the least important part of CSR work.
The CSR firm should, of course, strive to “make a profit, obey the law, be ethical and be a good corporate citizen. The four levels of the CSR pyramid are, however, in constant tension with each other (Carroll, 1991), with the most tension between the economic responsibilities and the others. They are, however, not in complete opposition to each other and are fulfilled simultaneously (Carroll, 2016).
Carroll & Schwartz (2003) argue that a common misunderstanding with the pyramid is that it is hierarchical, with the bottom steps having to be fulfilled before moving upwards or that some steps are less meaningful than others. In reality, the steps can be followed in whichever order and even overlap, for example an action could be motivated both by economic, legal, and ethical responsibilities (ibid.).
However, even though the CSR pyramid is a generally accepted and seen an influential theory in CSR research (Carroll & Schwartz, 2003; Baden, 2016), there has been a line of attempts to further expand as well as attempts to try and mitigate any misconceptions of the theory.
According to Baden & Harwood (2013), the moral, environmental, and ethical side of CSR is not given as much attention in research as the economic side of it. Therefore, in this thesis we have expanded our conceptual framework to include three dimensions of CSR as well. The
11 dimensions have been found and are derived from our collected and coded data as well as prior literature.
2.4 The CSR Dimensions
In this section we present the three dimensions of CSR that we have chosen to incorporate in our conceptual framework for this study. Social and environmental was chosen since they, as stated above, have not been given as much attention as other dimensions (e.g. economic) in Carroll’s CSR pyramid (1979). However, these dimensions are incorporated in the Triple Bottom Line. The TBL is a concept that goes beyond the economic result of a company, and adds to that the social and environmental value they create (Elkington, 2013). The discussion of the environmental aspect of business has been especially prominent in the context of the triple bottom line also referred to as TBL or People, Planet & Profit (Grankvist, 2009).
Moreover, the transparency dimension is an addition to the framework, that was found as an emergent theme from the data and therefore incorporated. In this thesis we combine the CSR pyramid with the three dimensions which has, to our knowledge, not been done in prior literature.
2.4.1 The Social Dimension
The social dimension is one of the two most frequent dimensions in the CSR definition (Dahlsrud, 2008). And within this dimension is the relationship between business and society (ibid.) and it is about being a good member of society and looking out for everybody that is in some way associated with your business (Grankvist, 2009). Elkington (1999), describes how social capital should be used to measure the social responsibility that a company takes. The author also argues that if companies do not take responsibility within this broader dimension, that can be disastrous for other sustainable actions that they have taken (ibid.). This is due to the fact that these concepts are interconnected within the TBL.
2.4.2 The Environmental Dimension
The presence of the environmental dimension in CSR definitions is lower than the other dimensions (Dahlsrud, 2008). Although one explanation can be that some organizations separate environmental work from CSR, another is that this dimension was not included in the earlier definitions of CSR however it has gradually been more included in CSR over time. The environmental dimension was, however, present in over half of the definitions that Dahlsrud
12 (2008) studied, and is therefore included as a CSR dimension. Grankvist (2009) argues that a company has to take environmental responsibility by making sure that it does not have a long- term negative effect on the environment.
2.4.3 The Transparency Dimension
Transparency in organizations refers to the information that the company discloses to external groups and how accurate that information is perceived to be (Brandes & Darai, 2017).
Schnackenberg & Tomlinson (2016) defines transparency as “Transparency is the perceived quality of intentionally shared information from a sender” (p. 1788). According to the authors, a good transparency in reporting will boost the performance of the company because a higher level of transparency will increase the level of trust in stakeholder relations (Schnackenberg &
Tomlinson, 2016). This trust is created when stakeholders get full access to the proper information in regard to their business relationship, and this will lead to the organization being perceived as a transparent one (Augustine, 2012).
According to Dubbink, Graafland & Liedekerke (2008), there is a lot of literature that points to the fact that a high level of transparency is a prerequisite for a company to get the full benefit of performing CSR work. The authors also argue that, if a company does not disclose their work within CSR, i.e. the company is not transparent, external stakeholders cannot differentiate between companies that are successful in CSR and those who are not (ibid.). If a company does not get recognition for its efforts within CSR, the incentive for further development, of e.g.
product innovation in sustainable materials, would decrease (Dubbink, Graafland &
Liedekerke, 2008). Transparency will also increase accountability and responsibility for the company in regards to the CSR issues that they work with (Schnackenberg & Tomlinson, 2016) and the risk of being exposed by stakeholder also increase the sense of responsibility (Mabillard
& Pasquier, 2016).
2.5 Operationalization of Conceptual Framework
According to Lynham (2002), operationalization refers to when the parts of the conceptual framework are connected to practice. In this thesis we seek, in part, to use the theories and perspectives that have been presented in this section, in the real-world context of H&M’s CSR report and media coverage and how the focus has changed over time. And it is through this operationalized approach that we illustrate how we have bridged and connected theory with
13 practice (Lynham, 2002). Specifically, in this study, the CSR pyramid serves as a conceptual framework to analyze our findings and the dimensions of CSR outlined in the theory section served the role of guiding both out initial coding, as well as our classification of codes. These two theoretical components are linked together explicitly in section 6, and somewhat more implicitly in section 5.
As further elaborated in Section 4, this thesis is based on an abductive approach, meaning that the data and theory collection is performed simultaneously. During the analysis phase we have taken a mainly deductive approach, which means that we have analyzed the empirical findings through the lens of the fundamental CSR theory; Carroll’s (1979) CSR pyramid. Moreover, when analyzing the data, the three dimensions; environment, social, and stakeholder will each be analyzed by looking for initiatives on each level of the pyramid. Table 1 visualizes the way that the analysis will be performed and provides examples of observations that can be made.
Table 1.
Environment Social Transparency
Philanthropic
Unexpected environmental initiatives, e.g. leading
change
Unexpected social initiatives, e.g. leading
change
Unexpected transparency initiatives, e.g. leading
change
Ethical Expected environmental initiatives, e.g. certifications
Expected social initiatives, e.g.
certifications
Expected transparency initiatives, e.g.
certifications
Legal Following environmental
laws Following social laws Following transparency laws
Economic
Economically driven environmental initiatives and motivations, e.g. save energy
costs, sales
Economically driven social initiatives, e.g.
to avoid sanctions
Economically driven transparency initiatives,
e.g. to avoid sanctions This table shows how we have operationalized the conceptual framework.
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3. Industry & Case Background
In this section we start with presenting the development of CSR in the fast fashion industry from previous research. Then in Section 3.2 - H&M, we present a brief history of the case company as well as; how their view of CSR, vision, and way of work with CSR has changed over the studied period.
In a global market, like the fashion market, companies have to pay constant attention to competitors’ actions and demand requirements (Arrigo, 2009). Furthermore, H&M is the second or third largest fast fashion company measured in revenue, depending on current exchange rates, following Inditex and sometimes Fast retailing (Gestalt & Garcia, 2019). Therefore, it is reasonable to assume that H&M’s actions will have influence over, and be influenced by, other companies in the same market, and that the results of the study will have important indications for the whole industry.
3.1 CSR & Fast Fashion
According to Arrigo (2013), fashion companies that do not engage in social and environmental work risk getting “a damaged image, a loss of consumer and shareholder trust as well as the difficulty in attracting qualified employees” (p. 176). The study also shows that the CSR work for the fast-fashion chain the GAP resulted in employee attraction and motivation, a powerful brand, enhanced consumer perceptions and profitability (Arrigo, 2013).
One reason why CSR is especially important for fashion brands is due to globalization of the industry (Arrigo, 2013; Sumner, 2018). The fast fashion industry has for a long time been criticized for its negative effects on society, i.e. through the promotion of consumption, and for insufficient work with ethics (Anguelov, 2016). One example of this relates to the tendency to locate the production of fast fashion to countries where workers’ salaries are low and their rights are weak (ibid.).
The fashion industry is also highly competitive, and the closeness to consumers are important (Arrigo, 2013). According to a report published by Svensk Handel (2019), only food and beauty products ranked higher than fashion, when consumers were asked about the importance of sustainable products. And when asked, 76% of consumers thought it was either important or
15 very important that the products were developed with the largest possible sustainability focus, and the importance increases every year. At the same time, the report further claims that the fashion industry is one of the retail industries where the lowest share of companies works actively with sustainability (ibid.).
One possible explanation for the lack of sustainability work in fashion although the consumer attitudes favor sustainable products is an attitude-behavior gap. Although consumers like sustainable products more, other factors, such as price, are more determining factors when the purchase is made. Also, a lack of transparency regarding sustainability, or customer knowledge about sustainability, is an explanation for the attitude-behavior gap. (Wiederhold & Martinez, 2018)
3.2 H&M
The clothing company H&M (formally known as Hennes) was first founded back in 1947 by Erling Persson, and quickly got successful and opened more stores in Sweden (Giertz- Mårtenson, 2012). In 1964 the first store outside of Sweden was opened in Norway, after that came stores in most of western Europe (ibid.). The first US store came in 2000 (H&M, 2020a) and by 2002 the company had 844 stores worldwide and were present in 14 countries (H&M, 2002a). Today the company is located in 71 markets, 47 of which are also available online, and the H&M group consists of eight different brands (H&M, 2019a).
In 1997 H&M started working with CSR through the launch of their first Code of Conduct, i.e.
a contract between H&M and their suppliers, stipulating CSR rules, (H&M, 2008, p.12).
Between 1997 and 2001 an overview of the CSR work was published in the annual reports.
However, in 2002 the CSR work was given a separate Sustainability Report, that has been published every year since.
One aspect that has shaped the H&M business is the value of self-financing. Erling Persson advocated that the company should grow without debt-financed investments. Despite this restriction, H&M has been the most successful company in the Swedish stock market since its IPO in 1975 (Giertz-Mårtenson, 2012). The founding family still owns 48,4% of the shares and 74,9% of the votes in the company (H&M, 2020b).
16 Earlier research about H&M has focused on their supply chain (Shen, 2014), communication (Dach & Allmendinger, 2014) and internationalization (Mo, 2015), however relatively little attention has been given by the scientific community to H&M and the fashion industry compared to other industries (Giertz-Mårtenson, 2012).
3.2.1 H&M’s View of CSR
The 2002 and 2005 reports are called “CSR Reports”, and are based on their definition of CSR.
In these reports, H&M write that they have chosen to define CSR as “a concept whereby companies integrate social and environmental concern in their business operations and in their interaction with their stakeholders on a voluntary basis in order to meet or exceed the ethical, legal, commercial, and public expectations that society has of business”. (H&M, 2002, p. 6;
H&M, 2005, p. 7)
From 2008 onwards, the reports are renamed as Sustainability reports, which H&M defines as
“the needs of both present and future generations must be fulfilled.” (H&M, 2008, p. 6). This is a less clear definition, and seems to focus somewhat more on the environment than the social part, although both are clear focus areas for the reports.
3.2.2 H&M’s Vision
H&M’s sustainability vision has changed dramatically over the years (see Appendix I). It has gone from focusing on “upholding” human rights and “contributing” to a sustainable development towards integrating it into all operations and to “lead the change”. The development shows a gradual increase in scope and ambition.
In the first years, the vision also focused on earning trust from stakeholders. This implies that stakeholders had low or no trust in H&M’s sustainability work. The fact that this was scrapped from the vision could indicate that they have succeeded in gaining trust from stakeholders.
3.2.3 H&M Way of Work
From the beginning of the CSR reports H&M did not have a written down CSR strategy, an aim to have one was first presented in the 2008 sustainability report which states that during 2009 the new strategy will be rolled out (H&M, 2008, p. 4). And goal and KPI development is under way and will be finished during 2009. The strategy has then shifted focus and been altered and added to during the years. For example, H&M has had a Code of Conduct agreement
17 regarding different aspects of CSR, this was a contract signed by suppliers aiming at upholding them to a certain sustainable way of conducting their business and production.
The amount of integration of CSR in the day-to-day business within H&M has developed during the period from 2002-2019. In the sustainability report from 2008 the development was described as “The biggest change is that we now make sustainability a shared responsibility in the entire organization.” (H&M, 2008, p. 3) and in the 2011 report “We work to make sustainability a natural and fully integrated part of everything we do.” (H&M, 2011, p. 10).
During the same time reaching different CSR related goals such as environmental ones, started being a responsibility and having the same high priority as other goals for each individual business unit, as part of this integration.
H&M shifted their focus of CSR integration, from being mainly focused on their own company towards the importance of CRS integration in the entire industry illustrated by the following quote “... to maintain our business idea, we need to maximize the positive impacts and minimize the negative impacts we have along our value chain. We achieve this by using our size and scale to leverage and catalyze changes that improve the operation of our own value chain as well as the wider industry.” (H&M, 2017, p. 5). And in the latest report from 2019 this point is made even more clear “At H&M Group, we are working to ensure a sustainable fashion industry for all.” (H&M, 2019, p. 3). And at the core H&M expresses the aim to be the leader of this change in the industry “We’re exploring new business models, innovating with new materials and processes and collaborating with others to re-invent the fashion industry.“ (H&M, 2019, p. 3).
Although sustainability work has become more incorporated into all H&M’s employees’ work, the number of employees dedicated to sustainability work has increased (see next page Table 2). These include both the auditors going over the compliance of the Code of Ethics, Sustainability commitment etc. in the supply chain, as well as employees in the HQ. Overall, the H&M Group went from having 39 000 employees in 2002 (H&M, 2002, p. 11) to 179 000 employees in 2019 (H&M, 2020c). The proportion of CSR employees has therefore gone from 0,77 to 1,34 per 1000 employees.
18 Table 2.
Year 2002 2005 2008 2011 2014 2017 2019
Employees Working in CSR 30+ 50 86 110 170 150 240
This table shows the number of employees working in CSR each of the studied year, as stated in the sustainability reports.
3.3 Summary
In this section we have presented how CSR has progressed within the fast fashion industry and a selection of information about the case company has also been presented. In the last part of this section, a brief history of the case company H&M has been presented. As well as the company’s view of CSR, vision, and the way they work with CSR, and how these three components have developed from 2002-2019.
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4. Method
In this section we describe the methodological approach of this study. In this thesis we will conduct a longitudinal case study methodology, by incorporating data from both sustainability reports and media coverage. The section starts with presenting a general overview of what has been done in this thesis and the following section describes our two data sources in more detail.
In Section 4.3 - Analytical Approach, we present how the two different kinds of data have been processed and created the base for our analysis. In the last part of this section we explain the concept of triangulation and why it was necessary and beneficial for this thesis.
4.1 General Methodological Choices
In this thesis we conduct a longitudinal case study methodology, by incorporating data from both sustainability reports and media coverage. A longitudinal case study allows the research to investigate the chosen case deeply for a period of time despite the limited time the researchers have to conduct the study. When using a case study method, different qualitative methods for data collection is according to Bryman & Bell (2005), a well-suited approach. Although results from a case study may not be fully generalizable for the whole industry, they do have important implications for future research and theory. The aim with the data analysis in this thesis is to be able to identify concepts and how their importance develops over time, which are not completely isolated to the H&M case. It can be argued that H&M is a representative case for large, international fast-fashion companies that can provide this study with analytical generalizability. Although H&M’s CSR work is in many aspects unique, the understanding of context and concepts developed in this thesis can be applied to other large, international companies in the fast fashion industry in the 21st century.
In order to find an answer to our research question How has the focus of the CSR work changed over time in large, international, fast-fashion companies? content analysis was used as the base for the methodologic approach. The study period was 2002-2019 and the data used was gathered from sustainability reports and in addition to those, news articles as well as press releases. In order to compile the data, coding was used and three higher level themes were found; Social, Environment, and Transparency.
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4.2 Data Sources
As previously stated, this thesis seeks to analyze data from both sustainability reports and media coverage. The collection of the two types of data are discussed below.
H&M has currently produced standalone sustainability reports annually from 2002 to 2019.
This signals that during this period of time H&M has put a significant focus on sustainability, which is a prerequisite for investigating our research question of how the focus has changed over time. Due to the time constraint of the study, we have used a periodic sample, which allows the research to cover the whole period. The sustainability reports were gathered from the years;
2002, 2005, 2008, 2011, 2014, 2017, 2019, which is every 2-3 years, since it is a feasible amount of data for this study, while also providing the study with enough data to show significant changes over time. To increase validity and reliability, both authors of this thesis have read all of the reports and media coverage.
In this thesis we are interested in how H&M communicates with all stakeholders and we aim to answer the research question by gathering data from the sustainability reports of H&M. The reason for this is that we are interested in how the company itself describes and motivates their CSR work, and the sustainability reports are the natural place to look for any stakeholder who is interested in H&M’s CSR work. We have focused on public data since we are interested in how H&M portray their CSR work, and how it is perceived by other stakeholders. Using publicly available data and providing our coding scheme, also increases the transparency of our work, and the replicability of the study (Dubois & Gabbe, 2002).
The media coverage data was gathered from Retriever Research “Mediearkivet”, which is a tool that creates easy access to a variety of published materials, from both domestic and international press. The media coverage included four print sources (i.e. Svenska Dagbladet, Dagens Nyheter, Dagens Industri, and Cisionwire), that were considered suitable for the data collection since they are well renowned, national, and impartial publications. The timeframe that was deemed interesting to investigate was 1st of January 2002 until 31st of December 2019.
This timeframe encompasses the timeframe of the sustainability reports, which means that the data creates a more comprehensive picture of the focus of the CSR work.
21 Initially the news search provided us with 113 117 articles that just had to include H&M. Since we are interested in studying the articles related to Sustainability and CSR, we chose that the articles also had to include either the word “hållbarhet” (“sustainability” in Swedish) or CSR.
This left us with 348 articles in the period 2002-01-01 to 2019-12-31. Figure 3a below illustrates the number of articles per year. From these, duplicates were removed, which left us with a total of 339 articles.
Figure 3a. In this figure the number of articles per year of the 348 articles studied, is shown.
Figure 3b. Number of articles per year out of the 165 articles studied.
In the media coverage data, all the 339 articles were briefly read through and assigned into categories, or removed if they did not obviously concern both H&M and their sustainability work. In total, 165 articles were placed into categories and Figure 3b illustrates the number of articles per year. If one article corresponded to several categories, it was assigned to all of them.
The categories with less than five articles assigned, were then removed. The assignment of articles into the rest of the categories is quantitatively shown in, Appendix II.
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4.3 Analytical Approach
As stated above, the data gathered from the sustainability reports was analyzed through qualitative content analysis. Content analysis is performed by gathering data in the form of text from for example written reports or diaries and identifying keywords that can be codified into categories (Bryman & Bell, 2005). According to Abbott & Monsen (1979), the simplest form of content analysis is analyzing a text and judging whether an event is present or not, providing only one level of measure. A more complex and diverse analysis can, however, be achieved by studying several categories and attributes (ibid.). Therefore, in order to achieve a more complex and diverse analysis we have sought to create as many categories that the data showed us and from these categories, emergent themes can be identified.
The method we have used is inspired by grounded theory, which is a well-established qualitative method (Bryman & Bell, 2005, pp. 447-453). Grounded theory is an inspiration for our approach as it is an iterative abductive method, where data collection and analysis are performed several times (ibid.; Timmermans & Tavory, 2012). When conducting case studies, the ability to go back and forth between empirical findings and theory (i.e. using an abductive approach) is a strength, which allows the researcher to get in-depth knowledge about the case company (Dubois & Gabbe, 2002). The longitudinal component of the case study further promotes this in-depth knowledge, since in a longitudinal study the researchers are able to identify patterns of similarities and changes over time (Mills, Durepos & Wiebe, 2012).
One central part of an approach based on grounded theory is the coding, which consists of going through the data and marking the parts that could be of theoretical or practical significance.
During this stage, theory, data collection, and coding are performed simultaneously. These indicators are then translated into concepts that are continuously compared with each other, clarified and developed into categories. (Bryman & Bell, 2005, p. 450-453)
In qualitative research the aim is to find data that help create analytical, not statistical, generalizations (Curtis, et. al., 2000). The analysis of the media coverage was done by reading through a selection of the articles and assigning each to categories. In total, nine categories were identified. By strategically choosing observations (i.e. articles) that best illustrate changes within each of the nine categories, a better understanding of the studied phenomenon is obtained (ibid.). If the selection instead were to be made through a random selection, the observations
23 would be normally distributed and thereby a risk of interesting observations might be deemed to be outliers, thus not included in the data of this thesis (Morse, 1998).
Reliability of a study means that the data collection method and way that we analyze the empirics, are done in such a way that it “will yield consistent findings” (Saunders, Lewis &
Thornhill, 2009, p. 156). To ensure reliability of this study we disclose in detail how we have collected our data, present our operationalization of theory, and in the appendix, we disclose our coding scheme as well as the coding process (see Appendix III and IV).
4.4 Triangulation of Data
Data triangulation is an important part of qualitative analysis such as that undertaken in this thesis, that is analyzing how the focus of H&M’s CSR work has changed over time. By gathering data from multiple sources, a more holistic picture of the development under study is captured (Saunders, Lewis & Thornhill, 2009, p. 146). The use of multiple independent data sources or collection techniques serves to control and corroborate the data, by ensuring that it does not differ significantly between different sources and provide the analysis with different aspects of the phenomenon, which allows for a deeper analysis (Bryman & Bell, 2005, p. 310).
For the purpose of this thesis, triangulation was achieved by studying both H&M’s sustainability reports and media coverage of H&M and their CSR work.
H&M states that the sustainability report, “together with our annual report and the information provided at our web site should mirror our standards on disclosure, audit and accounting concerning both financial and non-financial information.“ (H&M, 2002b, p. 53). Unlike internal documents, official documents do not have to reflect the actual behavior of an organization. Although the documents are not produced with the aim to mislead, different people and groups within the company may interpret events differently. The documents do, however, reflect the ideas and opinions that the company wants to communicate and considers to be of importance (Bryman & Bell, 2005, p. 435). This suggests that, although studying the sustainability reports is a suitable choice, data triangulation adds to the quality of the study.
Validity of a study means that the findings really are showing the researcher what one thinks they are showing (Saunders, Lewis & Thornhill, 2009, p. 157). In this study we have achieved validity through the triangulation of data. This way we can be sure that the conclusions that we
24 have drawn are based on what the data really is showing. Furthermore, both authors of the thesis have read through all of the sustainability reports. Regarding the news reports, all articles that could not clearly be assigned to the categories have been discussed by both authors before their removal.
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5. Empirical Findings
In the following section, we present the findings of our study with the aim of answering the research question: How has the focus of the CSR work changed over time in large, international, fast-fashion companies? The empirical findings in the following sections are from the sustainability reports and the media coverage search, both data types are presented together. Because of our abductive approach, we have chosen to structure this section after the themes that grew out of the collected data. We have created a coding scheme in order to get a better overview of how the coding laid the foundation for the three emergent higher-level themes: social, environment and transparency. Each of these higher-level themes are then broken down into sub-themes. The quotes that we refer to in each sub-section, are the building blocks on which the concepts in the three main categories were constructed. For a full overview of the themes, see the coding scheme in Appendix III. The observations in this section are then analyzed according to the operationalization of the conceptual framework in Section 6.
5.1 Social
5.1.1 Profitability
Regarding profitability, the main observation is that H&M considers social sustainability and profitability to be interlinked.
During the studied period H&M has had a consistent view that sustainability, in some way, is a part that is needed to maintain good profitability. In the 2008 report H&M also states that:
“Sustainability for H&M covers three areas: People, Planet and Profit.” (H&M, 2008, p. 5).
This view is further deepened in the later report where People, Planet and Profit is referred to as having provided better and more long-term business opportunities, which is a very desirable thing to have in a competitive industry like apparel (H&M, 2017, p. 10). In the news articles, H&M was generally seen as a sustainable investment, and sustainability work has increasingly become seen as something that is a profitable business strategy.
5.1.2 Government
The data related to government suggests that H&M has changed from mainly aiming to comply with laws, to view interaction with governments as a way to achieve industry-wide change.
26 In the reports we have found that there has been a large change in the focus regarding how H&M gets involved in the advancement of legal aspects associated with their company. In the 2005 report it was stated that their goal was to meet the legal requirements of the countries they were present in (H&M, 2005, p. 15; H&M, 2005, p. 54). However, in 2008 they wrote that they use lobbying to influence political decisions that have an impact on their business (H&M, 2008, p. 50). In 2014, there was a lot of focus on fair wages, in particular for the workers in the production units, with H&M meeting the Prime Minister from both Bangladesh and Cambodia in order to discuss stronger minimum wage legislation (H&M, 2014, p. 4; H&M, 2014, p. 46).
However, changing legislation is not an easy task for simply one company and H&M stated that “in many of the production markets in which we operate, poor implementation of legislation means that fair jobs are not available to all.” (H&M, 2017, p .59). Therefore, another shift in focus happens in the 2017 report, in which H&M stated that legislation for fair wages is an industry-wide challenge, that needs a collaboration between other brands as well as H&M’s own business partners (ibid.). The media coverage also portrayed H&M as a company that is partnering with government organizations to try to achieve change, through, for example, promoting stricter regulations.
5.1.3 Supply Chain
Within the supply-chain sub-theme, a division can be made between suppliers’ compliance with H&M’s code of conduct in general, and H&M’s work for supply chain workers’ rights. On the first topic, the main finding is that H&M has increased their work on suppliers’ compliance with their Code of Conduct to the point where they create long-term partnerships with suppliers. On the second topic, the main finding is that, although the H&M’s work has become more extensive, scandals have occurred in this area.
Supplier Compliance with H&M’s Code of Conduct
In 2002 the company stated that they try to only cooperate with those that are following the Code of Conduct (H&M, 2002b, p. 11). However, in the same report it is stated that if a supplier is not in compliance, H&M have gotten critique for not terminating that contract. H&M defends this based on their responsibility towards the employees of their suppliers explaining that “the ones that are truly affected are the workers. Another buyer indifferent to workers’ rights might then replace H&M.” (H&M, 2002b, p. 40). In 2005 they started auditing their supplier factories, in order to get better control of non-compliance (H&M, 2005, p. 5)
27 Starting in the report from 2011 and continuing to the latest one, the focus has shifted away from audits and more towards using their size to enforce their demands for change in the entire industry. In the 2011 report it was stated that H&M notices a difference in level of sustainable performance, between new suppliers that were at a lower level and old ones that were at a higher level (H&M, 2011, p. 28), which H&M stated, proves that they have an influence on, for example, improving working conditions (H&M, 2011, p. 2). Monitoring or auditing of factories was no longer enough according to H&M, instead the focus had to be more on strengthening the suppliers “ownership over their sustainability issues” (H&M, 2011, p. 32).
H&M has also during the studied period increased the aim of having long-term and meaningful partnerships with their suppliers. H&M stated that both parties would benefit if this kind of partnership was created, because it creates a security that enables the supplier to: “plan ahead and invest in improvements in their operations.” (H&M, 2008, p. 15). This long-term approach was even said to influence the suppliers to work more sustainably in their production, meaning that this approach was an incentive for the suppliers (H&M, 2014, p. 32).
The extent of the supply chain that H&M considered the company to have influence over was also broadened during the studied period. From the start they only viewed it as having influence over their direct suppliers (H&M, 2002b, p. 40). However, in 2008 they stated in their CSR report that they were looking “further back in the production chain, for example in areas such as fabric dyeing” (H&M, 2008, p. 3). By using their influence to make those production units work in a more sustainable way, i.e. H&M has moved from only direct influence to both direct and indirect influence. For example, they started a program in which these second-tier suppliers could voluntarily choose to make sustainable improvements to their production (H&M, 2008, p. 16).
Supply Chain Workers
One example of a concept that H&M has worked continuously with in regards to supply chain workers is fair wages. In the report from 2005 it is stated that violations of laws concerning working hours and wages, is something that they have found during their audits (H&M, 2005, p. 8). In 2008 it is stated in the sustainability report that: “As a buyer, we are in a position to influence working conditions […] at our suppliers’ operations.” (H&M, 2008, p. 3).
28 In 2014, developing the skills of workers as well as educating both them and the suppliers was brought up as some of the key elements for increased wages for the workers in the factories (H&M, 2014, p. 10; H&M, 2014, p. 48). And then in the later reports, there was much more talk about that there was a need for a systemic change in regards to the fair wages: “We believe that all workers should earn a fair living wage and we are fully committed to this vision.
Consequently, we are improving wage practices factory-by-factory while at the same time partnering with other brands and trade unions to achieve the systemic changes needed to ensure fair wages across the industry.” (H&M, 2017, p. 63).
A thorough process of identifying human rights issues was conducted in 2015, involving both internal workshops and external experts as well as organizations (H&M, 2017, p. 91). And building on that they stated a mission of “100% Fair & Equal” which concerned both employees of the H&M Group and in their supply chain (H&M, 2017, p. 56). In the latest report we found a more long-term and working through dialogue approach, exemplified by the following quote:
“Creating sustainable change within a rapidly evolving industry requires us to combine leading by example with partnerships and dialogue, so that we can achieve positive impacts in our own value chain while driving long-term industry wide progress.” (H&M, 2019b, p. 17).
The news articles revealed that H&M has been in some scandals, such as evidence of child labor and unfair wages in the supply chain, and this was the main focus in the earlier years. In the later years, while some scandalous reportages still occurred, H&M was often pictured as a company that does better than other companies in the industry, but that the industry is generally performing quite badly in ensuring workers’ rights in the supply chain.
5.1.4 Special Interest Groups
The main findings within this sub-theme was that, H&M took on an approach of cooperating with special interest groups and other initiatives to achieve industry wide change. As opposed to from the beginning when the main reason for the cooperation with stakeholders was in order to increase knowledge about how to act sustainably.
H&M stated that “H&M recognizes the need of interacting and having a dialogue with its various stakeholders” (H&M, 2002b, p. 17), as well as “it is essential for us to understand what our stakeholders expect from us.” (H&M, 2005, p. 22). In several sustainability reports, H&M
