To identify and prioritise the issues that are most relevant to our stakeholders and our business we analyse our stakeholders’ expectations as well as the social, environmental and economic impacts along our value chain in a materiality analysis.
Materiality
Material Issues 2023
For many years, H&M Group has been conducting its materiality assessment in line with applicable GRI standards. In 2023, the company began developing its process to align the approach with Corporate Sustainability Reporting Directive (CSRD) and the European Financial Reporting Advisory Group’s (EFRAG) draft Implementation Guidance for Double Materiality, which is expected to come into force in 2025.
H&M Group’s materiality assessment and HRDD processes are closely connected. The company identifies an extensive list of possible impacts as part of its overall risk and impact assessment, using a wide range of sources, including OECD sector risks, ESRS first set of drafts, GRI standards, a systematic analysis or ongoing dialogue with relevant stakeholders, particularly stakeholders affected by an issue, stakeholder surveys and systematic analysis of stakeholder expectations. These are prioritised to create a preliminary materiality assessment, which is subsequently reviewed by a second set of internal experts, followed by selected external stakeholders with expertise in the key impact areas, the company’s auditors, and the Board of Directors.
During 2023, H&M Group followed the process described above. In 2024, as part of the ongoing development of the company’s process to prepare for CSRD, the company will further refine the process in order to work towards including a financial materiality assessment based on input from internal experts and other external stakeholders. Read more about how H&M Group engages with its stakeholders in the company’s Sustainability Disclosure. H&M Group reviews its material impacts annually, with a more detailed assessment every three years.
The findings from the 2023 materiality assessment informed the company’s update to its 2022 GRI-based materiality matrix. Accordingly, the company has made a number of minor adjustments:
- Waste, including packaging, increased in materiality.
- Material / resource use increased slightly in materiality.
- Water increased in materiality.
Materiality matrix 2023
