Does Your Business Need a Human Rights Strategy?

Swedish fashion giant H&M’s commitment to “operating with respect to human rights across the value chain” recently cost the company $74 million and the wrath of its third-biggest — and fastest-growing — market. In late 2020, H&M, along with other well-known fashion brands, publicly announced that it was no longer sourcing cotton from China’s Xinjiang region due to concerns over the use of forced labor among the country’s minority Uyghur population. When a website highlighted the announcement in March 2021, the Chinese consumer backlash was fierce. The company’s brands disappeared from Chinese e-commerce sites, landlords in parts of China forced many of the brand’s stores to close, and Chinese customs officials issued a warning alleging that H&M’s cotton dresses contained “dyes or harmful substances” that could endanger a child’s health.1 By the time the company’s quarterly results were announced in July, there was little surprise that sales had fallen by 23% from March to May.2 At the time, chief executive Helena Helmersson said the situation remained “complex” and expressed H&M’s commitment to regaining the trust of its customers and partners in China.