WELCOME Conscious Actions Highlights 2013

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1 CONSCIOUS ACTIONS HIGHLIGHTS 2013

2 WELCOME Conscious Actions Highlights 2013 At H&M, we have set ourselves the challenge of ultimately making fashion sustainable and sustainability fashionable. We want to help people express their personality and feel proud of what they wear. I m very excited to see the progress we ve made so far and how this will help us to make you an even better offer and create a more sustainable fashion future. Karl-Johan Persson, CEO, H & M Hennes & Mauritz AB, Stockholm 2014

3 About H&M Conscious Making more sustainable fashion choices available, affordable and attractive to as many people as possible. That is our starting point and the reason why we have created H&M Conscious. With seven commitments at its heart, Conscious is the name for everything we do for a more sustainable fashion future. Hundreds of Conscious Actions big and small, short- and long-term are dedicated to putting these commitments into practice. Our Conscious Collection, for example, is one of them. But there are many more. Check out some of the highlights on the following pages and more at hm.com/conscious. OUR SEVEN COMMITMENTS 1. Provide fashion for conscious customers 2. Choose and reward responsible partners 3. Be ethical 4. Be climate smart 5. Reduce, reuse, recycle 6. Use natural resources responsibly 7. Strengthen communities

4 COMMITMENT ONE Provide fashion for conscious customers To us, quality is so much more than the fabric you can feel between your fingertips. It s also about the planet and the people around us. And it s about offering you the very best we have. Fashion and sustainability, not just one or the other. FROM THE LIFE OF BLAZER # This blazer is sold for 79.99/ 129. It is made of 83% organic cotton and 17% hemp. No chemical pesticides or fertilisers have been used. You can wear it and love it for many years, but if you don t want it anymore you can leave it at any H&M store and we will give it a new life. 15.8% of our cotton now comes from more sustainable sources (2012: 11.4%). The goal is 100% by 2020 at the latest. Clevercare symbol launched, providing guidance for conscious garment care. Organic leather, vegetable-tanned and from cows that were bred for organic meat production in Swedish farms, is the latest addition to our range of conscious materials. We increased sustainability training by 164% for our Sales Advisors in UK and Ireland stores.

5 COMMITMENT TWO Choose and reward responsible partners We set the bar high for our suppliers and regularly check how well they live up to our demands. But it s a two-way street. We also need to be a good partner ourselves. It s about long-term partnerships, training and rewarding good sustainability performance with better business. FROM THE LIFE OF DRESS # Made in Phnom Penh, Cambodia, at the Gladpeer Garment Factory Ltd. 5,216 people work in this factory, 88% of them are women. Their average income is about 15% higher than the applicable minimum wage and almost twice the wage of a primary school teacher. The factory belongs to one of our 162 strategic partners and we have worked with them for more than 10 years. Workers in this factory are represented by independent trade unions. We audited the factory 3 times during the year and found a relatively good sustainability performance (82 out of 100 in our ICoC-index). Major improvements have been made in recent years particularly in health & safety and workers basic rights. One major challenge that remains is to reduce overtime. Fair living wage roadmap launched, enabling suppliers to pay higher wages to their workers. 894,975 workers in Bangladesh and India have been educated about their rights since First brand to sign the Accord for Building and Fire Safety in Bangladesh. 100% of our building contractors have signed our Code of Conduct to promote good working conditions.

6 COMMITMENT THREE Be ethical Fair play, respect and integrity are fundamental to our business. Being ethical also means protecting human rights and fighting corruption. And not only to take responsibility for our colleagues, but also to serve as a good example wherever we operate. FROM THE LIFE OF SHIRT # This shirt has been sold in H&M stores in 53 countries. More than 116,000 people at H&M work to bring this shirt and other fashion to you. Wherever our products are sold or made, we apply zero tolerance to corruption. We see their diversity of any kind as a strong asset. For example, 73% of our managers are women. 50% of our board members are women. UN Guiding Principles on Business and Human rights adopted. We teamed up with Civil Rights Defenders to support human rights and equality globally. 80% of our senior managers across the business are female.

7 COMMITMENT FOUR Be climate smart Being climate smart is a constant series of choices, big and small; choosing efficient lighting, for example. It also means inspiring those around us to make equally smart climate choices, such as washing at lower temperatures or skipping the dryer altogether. FROM THE LIFE OF T-SHIRT # This T-shirt has been made with 50% organic cotton. About 26% of its carbon emissions occur when it s washed or tumble-dried at home. That means 19% less carbon emissions than using conventional cotton only. You can wash it at up to 60 degrees, but choosing 30 instead will save you money and requires 50% less energy. 14% reduction in electricity use per H&M store sqm since % of the electricity we used came from renewables. Our goal is 100%. Our own solar photovoltaic panels generated enough energy to supply 145 European households for an entire year. In spite of opening more stores, our transport fleet reduced CO2 emissions by 5% and fuel litres by 11% per store.

8 COMMITMENT FIVE Reduce, reuse, recycle It breaks our hearts to see fashion end up in landfill. That s why you can drop any clothes you no longer want or need at H&M to give them a new life. And, of course, we are reducing, reusing and recycling on many other fronts: hangers, packaging, shopping bags and more. FROM THE LIFE OF DENIM # This denim is made with 20% recycled cotton and 28% recycled polyester. Its recycled polyester used to be 3.1 PET bottles. This way, it helped to keep fashion from ending up in landfill. To make it out of recycled material only, more technological innovation is needed to ensure highest quality demands. The recycled cotton is generated from no-longer wanted clothes. We are working to overcome this challenge and our goal is to create a closed loop for textile fibres. 3,047 tonnes of no longer wanted garments collected. That s as much textile fabric as in about 15 million T-shirts. The amount of recycled polyester we used is equivalent to 9.5 million PET bottles. All H&M standard carrier bags are made of 100% recycled plastic the material proven to be produced with the lowest environmental impact. We collected over 187,000 kilos of unwanted garments to give them a new life. That would fill around 21,000 large laundry baskets. Thank you!

9 COMMITMENT SIX Use natural resources responsibly Making great fashion can use a lot of resources for example, water. Cotton needs it to grow and we all use it to wash our clothes. To create a sustainable fashion future, we need to consider future generations today and make fashion using less of our planet s resources. FROM THE LIFE OF DENIM # Over 1 million pairs of this denim have been sold since Today it s made using innovative waterless technology. With this and other improvements in the production, the water use is 65% lower than before. This means that almost 31 million fewer litres of water have been used. 340 million fewer litres of water used in denim production. 30,000 tests conducted to ensure that our products are safe to wear and don t cause harm to the environment. 2,300 hours of training for our colleagues on water impact as part of our collaboration with WWF. 83% of our stores have installed systems that ensure our buildings are running as energy efficiently as possible.

10 COMMITMENT SEVEN Strengthen communities The way we do business has an impact on millions of people. We contribute to over one million jobs and we strongly believe in the shared value of investing in social and environmental initiatives that strengthen communities around us. FROM THE LIFE OF KIDS SHOES # This ballerina shoe was sold for 12.99/ % of its sales price supported UNICEF s work to improve access to education, health and child protection in India and Bangladesh. This way, it contributed to empowering more than 1 million children since ,000 people helped with safe drinking water through the sales of H&M Gift Cards. 3,555,687 garments donated to charitable causes. More than 12,000 additional jobs created. We donated almost 546,000 items to the British Red Cross, worth approximately 5.8m.

11 H&M s main owner, the Stefan Persson family. To spend this money wisely, we asked our customers which causes they felt strongest about. In a public vote, the following three causes were chosen: clean water, empowering women and education. We now partnered with world-renowned organisations in these fields to make a difference. Thanks to everyone who helped us in making this important decision! Find out more at hm.com/ consciousfoundation. ENABLING A FAIR LIVING WAGE We have been working to promote wage increases for garment workers for many years. But despite good progress, lasting change requires even more work. This is why we have now launched a roadmap to take our efforts to the next level and bring together all the players brands, suppliers, governments and the workers themselves. We will support our suppliers and their employees in establishing fair and regular wage negotiations. And we are sending them a clear signal: we are willing to pay more so that our suppliers can pay higher wages to their workers. We will also continue to engage with governments so that ultimately all garment workers can benefit, not just those who work for our suppliers. Read more at hm.com/fairlivingwage. MAKING A DIFFERENCE TOGETHER This year the H&M Conscious Foundation received additional funding of SEK 500 million (EUR 56 million/usd 76 million) from JOIN US IN CREATING A MORE SUSTAINABLE FASHION FUTURE Did you know that reducing the washing temperature from 60 to 30 degrees can save a whopping 50 percent in energy use? If not, you re certainly not alone. That s why all our clothes will soon carry the Clevercare label. At clevercare.info you will find useful tips on how you can care for your clothes with less impact on the environment while keeping them just as clean and fresh and even saving time and money! % LESS ENERGY USE

12 H&M is one of the companies that are honestly trying to make a difference. Yolanda Kakabadse, President WWF international ACKNOWLEDGEMENTS Here are some of the rankings, indexes and awards that assessed and recognised our work during the year. Dow Jones Sustainability Index FTSE4Good Global 100 List World s Most Ethical Companies CDP s Global 500 Climate Performance Leadership Index Interbrand Global Green Brands Rank a Brand Most sustainable fashion retailer in the Netherlands GET THE WHOLE PICTURE This is an overview of just some of the many highlights from H&M s Conscious Actions from Read more at hm.com/conscious or download the full report from hm.com/consciousactions2013 THANK YOU We would like to take this opportunity to thank everyone who contributes to our continued sustainability mission: our thousands of passionate colleagues who work hard every day to further integrate sustainability into our business, our customers, our partners and the many other stakeholders who help us become better every day. en-gb

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