La sostenibilità aziendale e la percezione dei consumatori: il caso di H&M

UNIVERSITÀ DEGLI STUDI DI BERGAMO

Dipartimento di Economia Aziendale

Corso di Laurea Magistrale in Business Administration, Professional and

Managerial Accounting

–

Classe n. LM-77 Scienze economico-aziendali

CORPORATE SUSTAINABILITY AND CONSUMERS’

PERCEPTION: THE CASE OF H&M

Relatrice:

Chiar.ma Prof.ssa Silvana Signori

Correlatore:

Chiar.mo Prof. Mauro Cavallone Tesi di Laurea Magistrale

Martina COLLEONI

Matricola n. 1043457

ANNO ACCADEMICO 2021 / 2022

......................................................................................................................... 5

INTRODUCTION ........................................................................... 6

Chapter 1- SUSTAINABLE DEVELOPMENT

................................................................................................... 7

1.1 Sustainability Governance ................................................................................... 9

1.2 UN Sustainable Development Goals

..................................................................................................... 11

1.3 The Triple Bottom Line ................................................................................ 13

1.4 Sustainable Development in industry

– ..................................................................................... 15

Chapter 2 FAST FASHION SECTOR

......................................................................................................... 15

2.1 What is fast fashion? .......................................................................................... 16

2.2 Fast fashion and consumerism

...................................................................................................... 17

2.3 Impact on environment

............................................................................................................ 23

2.4 Sustainable fashion .... 26

2.5 The role of consumers awareness on the transition towards more sustainable systems

............................. 31

Chapter 3- SUSTAINABILITY REPORTING AND COMMUNICATION

.......................................................................... 31

3.1 Sustainability report: what is it and aims

................................................................................................................... 33

3.2 GRI Standards ....................................................................................................... 35

3.3 The AA1000 Standard ...................................................................................................... 35

3.4 Principles for reporting

........................................................................................................... 37

3.5 Process of reporting ....................................................................................... 38

3.5.1 Key Performance Indicators .............................................................................. 40

3.6 Shadow accounting and greenwashing

........................................................................................ 41

3.7 Other information to consumers

– ............................................................................................................ 44

Chapter 4 H&M CASE ................................................................ 45

4.1 H&M Sustainability Performance Report 2020

..................................................................................................... 45

4.1.1 Vision and strategy .............................................................................................. 46

4.1.1.1 Leading the change ............................................................................... 47

4.1.1.2 Circular and climate positive

...................................................................................................... 49

4.1.1.3 Fair and equal ............................................................ 54

4.2 Approach to the change: from fast to green brand

............................................................................................. 55

4.2.1 Green or greenwashing?

................................................................................................ 57

4.3 Consumers data collection

............................................................................................................. 58

4.3.1 Data collected ........................................................................................................... 72

4.3.2 Analysis report

........................................................................................................................... 75

CONCLUSION ....................................................................................................................... 77

BIBLIOGRAPHY

........................................................................................................................... 81

SITOGRAPHY

INTRODUCTION

The aim of this research is to put the attention on the importance of sustainability practices

inside company’s activities and to consumers awareness. Nowadays, sustainability is

becoming part of our everyday life due to the urgent call for a change to safeguard planet

Earth. We live in a society where people act in wrong ways driven by ideologies of

consumerism, and we constantly contribute every day to increase the second most

polluting sector: the fashion industry. The world is filling up with rags as well as plastic.

In developed countries, like our, consumerism and fashion are damaging the entire

humanity at social and environmental levels, increasing the phenomenon of fast fashion.

To contrast this situation, it is necessary to create a sense of urgency and awareness

among the consumers: in this way people can purchase in a more conscious way.

Companies and consumers are able to influence each other regarding the urgent adoption

of sustainable practices. Now, only few consumers are very attentive to the sustainability

of the products they buy, for this reason a strong intervention by the sellers is necessary.

Moreover, fast fashion brands are risking to damage their image, that is also the reason

they are moving to change their production behaviours, bringing attention to

sustainability. One of the most striking examples is the famous fast fashion brand H&M,

placed in the spotlight for its new green initiatives which seeks to redeem its image. This

research analyses how this firm is trying to create the new green identity, modifying its

habits at the eyes of stakeholders, through the creation of sustainability report and

concrete initiatives in stores. Sustainability report is the main tool that companies can use

to spread their commitment in sustainable behaviour. This will be analysed in the third

chapter, understanding the fundamental notions for editing, the principles and standards

to which references must be made to obtain a consistent report. There are international

standards and guidelines that provide the correct way to build the report.

Finally, to support the research of this paper, a poll has been created to know the

purchasing’s attitude of people, their knowledges regarding sustainability issues, and how

the brand H&M is perceived by consumers. In this way, we can understand the actual

sustainability approach that consumers have and if the reputation assigned to the brand

by consumers reflects the values, the objectives and the actions reported in the brand's

sustainability report, recognising if this tool is effective for a fast fashion brand. 5

Chapter 1- SUSTAINABLE DEVELOPMENT

The need for sustainable and environmentally friendly economic growth began in the

seventies, when society became aware that the traditional model of development will

cause the collapse of the Earth's ecosystem in the long term. Over the years,

environmental efforts by the international community, including the Paris Climate

1

Agreement , have concretely demonstrated that the planet's limits are real (Balocco,

2021). Climate change and the deterioration of the environment are destroying the

ecosystems and this has negative repercussions on development, health and natural

resources. The environmental crisis, climate change, rising temperatures are strong and

understandable signs of the dramatic impact we are experiencing. These signals should

conduct people and companies to reflections and actions with a new sustainable view.

The economic development model that characterizes the West countries cannot be

sustainable in the medium-long term and it is therefore necessary to identify new

strategies in order to think of a long term that also includes respect for the environment

(Daly H.E., 2014). The concept of sustainability requires new ways of thinking about the

world and new ways of acting in the economic, science, technology, politic areas and

even the daily life of individuals, able to create a system of values that respects and

promotes life in its entirety. Each Earth’s citizen can act in a better way to improve the

future, but companies and international organisations play a fundamental role, as they are

able to move the masses leading them on a sustainable path.

1 The Paris Agreement is a legally binding international treaty on climate change. It was adopted

by 196 Parties at COP 21 in Paris, on 12 December 2015 and entered into force on 4 November

2016. Its goal is to limit global warming to well below 2, preferably to 1.5 degrees Celsius,

compared to pre-industrial levels. https://unfccc.int/process-and-meetings/the-paris-

agreement/the-paris-agreement 6

1.1 Sustainability Governance

Never like today, there is a competitive business environment where companies have

pressure to improve their sustainability practices reducing footprints and continuing to

maximize profit. Sustainability governance helps the company to implement

sustainability practices across business, ensure responsibility and manage the goals set.

Business sustainability processes are not the same for all companies, for this reason

governance is defined as the way in which sustainable development is built. From

consumers’ research is underlined the request to seek additional sustainability education

from brands themselves, adopting a more active role in increasing awareness for

consumers (Amed et al., 2019). 2

Corporate Social Responsibility demonstrates corporate awareness, citizenship, and

social performance integrated into the business model. The World Business Council for

“the ethical behaviour of a company

Sustainable Development (WBCSD) defines CSR as

towards society”. CSR guides the organization toward its mission and support its

consumers. It is also an integral component of corporate governance, useful when there

is a conflict between the corporate goals of maximizing profits and social goals (Idowu,

3

2012). In 2001 the European Union spoke first about CSR in one of its green books ,

defining the CSR in terms of voluntary integration of the social and environmental

concerns in their commercial operations and in their relations with interested parties. At

the beginning, the CSR initiatives were voluntary and defined as self-regulation, but over

time, new mandatories and impositions have intervened that have pushed companies

towards greater compliance at a social level.

Today there are different organisations and entities that promote and supervise the

adoption of CSR in businesses. International Organization of Standardization (ISO)

2 Corporate social responsibility (CSR) is defined as the sense of responsibility that a company or

any other economic entity demonstrates towards the community and the environment.

https://www.insidemarketing.it/glossario/definizione/corporate-social-responsibility/

3 Bruxelles, 18.7.2001 COM(2001) 366, Promote a European framework for corporate social

responsibility.

http://www.csspd.it/download/ALLEGATI_CONTENUTI/csrgreenpaper_it.pdf 7

4

26000 is defined as the recognized international standard for CSR. It is socially accepted

that CSR adheres to analogous principles but with no formal act of legislation. Conflicts

inside the business lead to the establish of CSR policies and programs, act to ensure taking

the social interest seriously and to maintain legitimacy with the public. ISO 26000 covers

several ranges of activity inside the organization, from economic to social, environmental,

ethical, and governance issues. This standard goes beyond profit-maximization and social

performance to cover all dimensions of sustainability performance, providing also a

guideline for companies to contribute to sustainable development.

In 1987 the World Commission on Environment and Development (WCED) published

the article “our also known as Brundtland report. This publication is

common future”,

considered the first guidance in principles for sustainable development, and it is still used

today. The Brundtland Report defines the term sustainable development as a development

that satisfy the present needs without compromising the need of the future generation.

The document underlies the importance of join forces between states to reach common

goals, in peace and in collaboration. Despite it was published more than thirty years ago,

it deals with all current arguments relating how to run our society in a sustainable way.

This because years ago there were signals and evidence of unsustainable development of

economy and society, but only in the last recent years the call towards sustainability

became urgent. Today companies adopt all the measures to act fairly and create a

governance inside the firm able to fulfil its goals, spread awareness through clothes

consumers, showing results and action in the sustainability report. Recently, the United

Nation established the UN sustainable development goals, a way to give common goals

to every company who join the fight against unsustainable development.

4 Kyoto Protocol, ISO 26000 (2010) Guidance on social responsibility 8

1.2 UN Sustainable Development Goals 5

The United Nations Development Goals are global goals, defined by United Nations in

2015 to achieve common results in end poverty, save planet resources and maintain peace

and prosperity. UNDP operates in about 170 countries, reducing inequalities, eliminating

poverty, hunger, discrimination and sustains progress helping countries to achieve

Sustainable Development Goals.

The UNSG are 17 and to achieve them by 2030, in every context is necessary high

knowhow, technology and financial resources. For this reason, the developed countries

try to help the developing countries in realising these goals, and that is the essence of the

last goal, the seventeenth. Collaborations between countries and economies are

fundamental to achieve common goals: this is not a challenge to see who arrives first, but

it is a race against time, to save Planet Hearth and to give equity to the entire population.

6

Below there are the exact list of UN Development Goals :

1. no poverty;

2. zero hunger;

3. good health and well-being;

4. quality education;

5. gender equality;

6. clean water and sanitation;

7. affordable and clean energy;

8. decent work and economic growth;

9. industry innovation and infrastructure;

10. reduced inequalities;

11. sustainable cities and communities;

12. responsible consumption and production;

13. climate actions;

5 The United Nations organization was born in 1945 with the main objective of maintaining peace,

providing international security, guaranteeing the respect for human rights, the provision of

humanitarian aid and the promotion of sustainable development. (www.un.org)

6 https://www.undp.org/sustainable-development-goals 9

14. life below water;

15. life on land;

16. peace, justice and strong institutions;

17. partnership for the goals.

Figure 1. The sustainable development goals

Source: official site of UN

According to the Human Development Index (HDI), present on the official page of

7

UNDP , in 2020 the country at first rank is Norway and Italy is at 29th ranks.

Every company, in its own small way, can contribute to the achievement of these goals

on a global scale, but also the citizens of planet Earth are called to respect these goals in

order to enhance the respect for the environment and to help companies in achieving them

(reference to UNSDG n.17). These goals connect several areas: they consider the human

respect, the environmental protection and the economic development. Therefore, the call

for a sustainable behaviour does not concern only the environmental sphere, but also the

social and economic area. The concept of Triple Bottom Line encloses the three areas

where companies must put the attention to ensure a sustainable development.

7 https://hdr.undp.org/en/data 10

1.3 The Triple Bottom Line

line, or “three Ps”, was coined in 1994 by John Elkington 8

The term triple-bottom and it

is an economic concept that sustains a company should commit to three level at the same

time to reach sustainability goals: people, planet, and profit. Business decisions are

usually made by comparing the costs and expected benefits, expressed in monetary terms,

and only then the other dimensions could take into account in decisions. According to

TBL, only companies who undertake these three aspects together are running the business

well. People do not have to consider the term sustainability only with reference to

environmental issues, but it is related to ethic issues at a much broader level. The three

variables involved in this model, summarize the macro areas necessary to incorporate the

sustainable concept inside the company.

Figure 2. The triple-bottom line

Source: Earth Accounting on twitter

• Planet: this environmental variable is related to water, air, depleting and

renewable resources, energy, land, and pollution. The introduction of sustainable

environmental practices is fundamental to reduce the ecological footprint and

wastes. The creation of a circular economy is not instant, the results of

environmental practices will be visible in the medium-long term, but climate

change is in place now. In fact, it is important to implement right now new

decision-making and create new way of production able to stop the climate change

8 https://www.economist.com/news/2009/11/17/triple-bottom-line 11

immediately. The presence of topics regarding the planet-safeguarding in a<