H & M Hennes & Mauritz Ab

Governance roles

Reference: pages 63-64 (G1 GOV-1: page 117).

The board of directors "oversees the management of business conduct matters and material sustainability impacts, risks, and opportunities" and receives quarterly updates on sustainability performance (page 64). It has 14 non-executive members: 8 elected by the annual general meeting, 3 employee representatives and 3 deputy employee representatives. The company reports 50% female members and 57% independent members (page 64).

The CEO, supported by the executive management team, runs the business day to day, including linking the business plan and strategy to the management of material impacts, risks and opportunities. The chief sustainability officer sits on the executive management team and, with the sustainability management team, oversees delivery of the sustainability strategy (page 64). The audit committee oversees financial and sustainability reporting, risk management and internal control, including material sustainability matters (page 64).

Board and management experience covers the fashion and retail sectors, and the board received CSRD training in 2024. H&M Group has no remuneration committee; the full board does that work (page 64).

Information provided to management and the board

Reference: pages 63-64, 68-69, 74-75.

The board "receives quarterly updates on sustainability performance and results", covering material matters, key actions across brands and functions, and progress on strategically important targets. The CEO receives quarterly reports with KPIs on targets and the effectiveness of actions (page 64). The board updates the audit committee on sustainability risks and on the effectiveness of internal control over sustainability reporting as part of its biannual reporting (page 64).

Stakeholder views reach the board through an annual update from the chief sustainability officer and its yearly approval of the sustainability strategy (page 68). Results of the double materiality analysis go to the executive management team and the board before the next financial year starts, to inform strategic priorities (pages 68-69). The board also gets annual updates on progress against the climate targets and on key investments in the climate transition plan (pages 74-75).

Sustainability in incentive schemes

Reference: pages 64, 78 (E1 GOV-3: page 64); remuneration guidelines pages 133-134, 157-158.

The remuneration guidelines aim to link incentives to the company's long-term strategy and sustainability targets (page 64). In the long-term incentive program (LTIP 2025), performance share awards depend on three-year criteria: operating profit, total shareholder return on the H&M share and an ESG criterion, the reduction of GHG emissions. The ESG criterion is tied to cutting absolute Scope 1, 2 and 3 CO2e emissions against the 2019 level (page 64). The company reports that 10 percent of remuneration in LTIP 2025 was linked to climate-related considerations (page 78).

Short-term variable pay is mainly based on financial results such as total sales and operating profit, and may also reflect non-financial goals, including sustainability (page 64). The company says no outstanding share or share-price programs exist for the board (page 64).

Statement on due diligence

Reference: page 65.

A table maps the five core elements of due diligence to where they appear in the statement (page 65):

• Embedding due diligence in governance, strategy and business model: sustainability steering and governance; sustainability strategy, business model and value chain; "Our ambition, steering and strategy" in each topic (E1 to E5, S1 to S4, G1)
• Engaging with affected stakeholders: interests and views of stakeholders; process for engagement and remediation (S1 to S4)
• Identifying and assessing adverse impacts: the double materiality analysis process and the identification of material matters in each topic
• Taking action: management of material matters; targets and actions; climate transition plan (E1)
• Tracking effectiveness and communicating: "Our progress and results" in each topic

The company says its human rights and environmental due diligence follows the OECD Guidelines for Multinational Enterprises and the UN Guiding Principles on Business and Human Rights (page 65).

Risk management and internal control over sustainability reporting

Reference: page 65 (corporate governance report page 41).

Sustainability impacts and risks found through due diligence feed into the enterprise risk management (ERM) system. Risks are ranked in a matrix covering likelihood and impact on financial size, brand reputation and regulatory compliance. The corporate governance team reviews the ranking; prioritized risks go to the audit committee biannually and to the board annually (page 65).

The main reporting risks named are non-compliance with frameworks and regulations, and failure to report accurate information. Internal control over sustainability reporting (ICSR) is built to mirror internal control over financial reporting. It currently covers key and prioritized sustainability areas and the reporting process. The sustainability data and controlling team is responsible for it, and the audit committee monitors its effectiveness (page 65).

Strategy, business model and value chain

Reference: pages 65-67.

The company describes its strategy as decoupling growth from resource use (cutting emissions and the use of virgin materials and water), supporting people and communities, and driving change within the industry (pages 63, 66). It serves women, men, youth and children in 81 markets, with 4,101 stores and 132,403 employees (pages 65-66). New markets in 2025 included Brazil, El Salvador and Venezuela (page 66).

Own operations: design, purchasing, marketing, sale, warehousing, distribution and resale. The portfolio of over 30 companies includes Sellpy, Syre and Looper Textile (page 66).

Upstream: H&M owns no factories. Independent suppliers, mainly in Asia (Mainland China, Bangladesh, India, Vietnam, Türkiye), make the collections. The chain runs from raw materials (Tier 4) and yarn (Tier 3) through fabric (Tier 2) to garment manufacturing (Tier 1) (pages 66-67).

Downstream: customer use, collection, sorting, recycling and waste management of garments, textiles and packaging (page 66).

The company states it "did not operate in any markets where our products or services were banned" in 2025 (page 66).

Interests and views of stakeholders

Reference: pages 67-68.

A table lists nine stakeholder groups with how and why they are engaged (page 67): own workforce, workers in the value chain, affected communities, consumers and end-users, suppliers and business partners, investors and analysts, policymakers, partnerships and industry peers. Methods include employee surveys and dialogue with worker and union representatives; trade unions, multi-stakeholder initiatives and anonymous worker surveys for value chain workers; and representative groups and partnerships for affected communities. Some partners also act as proxies for affected rightsholders.

The company engages every key group annually, at global and local level. Insights are documented quarterly and fed into the double materiality analysis (page 68). The board gets an annual update from the chief sustainability officer (page 68). The company plans changes to its engagement process during 2026 to meet regulatory requirements on the role of stakeholder engagement in due diligence (page 67).

Material impacts, risks and opportunities and their interaction with strategy and business model

Reference: pages 68-71; topical chapters (E1 SBM-3: page 73).

The table of material sustainability matters (page 70) covers 10 topic areas. Each row is typed as an actual or potential impact, a financial risk or a financial opportunity, with value chain location and time horizon. By our count it holds 53 rows: climate change 8, water pollution 2, water use 1, biodiversity and ecosystems 2, resource use and circular economy 7, own workforce 9, workers in the value chain 11, affected communities 3, consumers and end-users 4, business conduct 6. The company states no total.

The company says "no significant changes" were identified in its material sustainability impacts since the previous period, and that the 2025 analysis now includes financial effects (page 68). It reports that no material current financial effects from identified risks and opportunities materialized during the year (page 68). The effect on strategy and business model, including the resilience analysis, is described on page 68 and in each topical chapter (see E1-3).

Process to identify and assess material impacts, risks and opportunities

Reference: pages 68-69; topic screening in each chapter.

The double materiality analysis runs in five steps (page 68): understanding, identification, assessment, prioritization and monitoring. Inputs include the SASB Standards, OECD Guidelines, ESRS, WWF and the European Environment Agency, plus results from due diligence and stakeholder engagement (page 68).

Impact materiality scores severity (the average of scale, scope and irremediability) and likelihood; for negative human rights impacts, severity takes precedence. Financial materiality scores inherent and residual likelihood and financial size, using the same criteria as other business risks (page 69). For FY2025, impacts rated medium, high or critical were material, and financial effects rated high or critical were material (page 69).

Time horizons are short term (within one year), medium term (one to five years) and long term (five to fifteen years) (page 68). Sustainability impacts and risks are being brought into the ERM system, a step that continues through 2026. The sustainability governance team and the corporate governance team review the process at the end of each financial year (page 68).

Disclosure requirements covered by the sustainability statement

Reference: pages 123-125 (ESRS index); pages 126-129 (datapoints from other EU legislation).

The statement prints an ESRS content index with page references. It covers ESRS 2 (BP-1, BP-2, GOV-1 to GOV-5, SBM-1 to SBM-3, IRO-1, IRO-2) and E1, E2, E3, E4, E5, S1, S2, S3, S4 and G1, plus 15 entity-specific disclosures, such as Green Fashion Initiative, resale, garment collection, wage management and employee engagement. Rows marked "Subject to phase-in": E1-9, E2-6, E3-5, E4-6, E5-6, S1-7, S1-11 and S1-15. The index has no row for E1-7, E2-5, E3-4, E4-5, S1-12, G1-5 or G1-6.

The datapoint table (pages 126-129) gives page numbers for SFDR, Pillar 3, Benchmark Regulation and EU Climate Law datapoints. Some are marked "Not material", including the two E3-4 water datapoints, and others "Subject to phase-in", including the E1-9 datapoints.

Phase-in: "H&M Group has exercised all phase-in provisions in Appendix C of ESRS 1 except S1-13" (page 63). The company says it omitted no information based on intellectual property, know-how or innovation results (page 63).

Transition plan for climate change mitigation

Reference: pages 74-77.

H&M Group has "adopted a climate transition plan and set science based targets" to contribute to limiting warming to 1.5°C. The plan is approved by the CEO and board and is described as fully embedded in business strategy and financial planning (pages 74-75).

Key actions (page 74): energy efficiency and renewable energy in own operations; energy efficiency and renewable energy in garment and fabric manufacturing; advocating for systemic change; improving logistics and low-emission transport; more recycled and sustainably sourced materials; GHG removals and storage projects.

Targets (page 76): cut Scope 1 and 2 and Scope 3 (excluding indirect use-phase) emissions by 56% by 2030 and 90% by 2040 against 2019, then reach absolute net-zero by 2040.

Resources in 2025: SEK 2,484.2 m OpEx and SEK 347 m CapEx on key actions (page 75). No investment in coal, oil or gas activities; none of the CapEx activities is assessed as meeting the EU Taxonomy criteria; the group is not excluded from the EU Paris benchmarks (page 75).

Locked-in emissions: a qualitative assessment concluded these emissions do not compromise the climate targets. Some owned distribution centers rely on natural gas for heating, which the company does not treat as a significant lock-in (page 75).

Identification of climate-related risks and scenario analysis

Back-filled from E1 IRO-1 (page 74) and the climate matters table (pages 72-74). This disclosure requirement did not exist under the 2023 ESRS the report was prepared against.

Risk types (pages 73-74): the matters table tags three material risks as physical (higher procurement costs, supply disruption on transport routes and in key production markets) and one as transition (higher sourcing costs from carbon taxes).

Method: a quantitative and qualitative TCFD-based analysis, run in 2024, screened key assets and activities along the value chain for physical hazards (flooding, extreme heat, drought, wildfires, cyclones, water stress) and transition events (legislation, market shifts, reputation, technology), using site coordinates, energy and water use, economic weight and GHG emissions. A simplified pass over all risks preceded financial modeling of the largest.

Scenarios and horizons (page 74): SSP1-2.6 (net-zero 2050, 1.5°C), SSP2-4.5 (delayed transition, moderate, about 3°C) and SSP5-8.5 (hot house, above 3°C), plus NGFS inputs (NiGEM NGFS v1.23.2 [GCAM 6.0 NGFS]) for transition risk. Horizons: within one year, by 2030 and by 2040.

Result: no single asset gave rise to a material financial risk, but several material risks sit upstream (raw materials, textile production, transport). A named assumption is "the continuing expansion of renewable energy alternatives in key production regions".

Resilience in relation to climate change

Back-filled from ESRS 2 SBM-3, "Our material sustainability matters and business resilience" (page 68), and the E1 introduction (page 72). This disclosure requirement did not exist under the 2023 ESRS the report was prepared against.

The 2025 resilience analysis assessed potential effects of external events from climate change and the company's capacity to manage them, across the full value chain: production and transport of raw materials and input goods, and product use and disposal (page 68).

Results: planned and ongoing actions (recycled and sustainably sourced materials, resource efficiency investments) support the ability to respond to supply chain disruption and keep operating in the short to medium term, within one to five years. Supply chain flexibility adds to this. The results assume the 2030 climate and resource use targets are met and the asset base does not change significantly. They show "no additional need to adjust or adapt" strategy on access to finance, redeploying or upgrading assets, or reskilling (page 68).

Page 72 says the company "is well-positioned to manage risks related to climate change". The method is to be developed further in 2026 to cover all material matters (page 68). No separate statement of areas of uncertainty appears in these passages.

Policies related to climate change mitigation and adaptation

Reference: pages 74, 120.

The environmental policy commits H&M Group to reducing its climate impact in line with the 1.5°C target and the Paris Agreement. It covers climate change mitigation, GHG emissions and energy use. The company states it "does not cover matters related to climate change adaptation" (page 74).

The sustainability commitment, which every business partner must sign, requires suppliers to monitor and report energy use and emissions and to pursue continuous efficiency improvements (page 74).

Policy details (page 120): the environmental policy applies to all group entities, in own operations and across the upstream and downstream value chain; the sustainability department reviews it each year; the chief sustainability officer is accountable for implementation; and it is published on the company website.

Actions and resources in relation to climate change policies

Reference: pages 75-77.

Total 2025 resources for key climate transition actions: SEK 2,484.2 m OpEx and SEK 347 m CapEx (page 75). Actions with disclosed 2025 spend and projected 2030 effect (pages 76-77):

• Energy efficiency in own operations: SEK 7.2 m OpEx and SEK 296.9 m CapEx; about 389 tCO2e
• Renewable energy in own operations (virtual power purchase agreements, on-site solar, certificates): SEK 59.2 m OpEx and SEK 2.9 m CapEx; about 55% cut in Scope 1 and 2 by 2030, around 37,766 tCO2e
• Supplier energy efficiency: SEK 27.1 m OpEx; 2% of Scope 3, around 81,306 tCO2e
• Renewable energy and coal phase-out at suppliers: SEK 24.6 m OpEx; 38% of Scope 3, around 1,565,387 tCO2e
• Recycled and sustainably sourced materials: SEK 1,244.5 m OpEx; 13% of Scope 3, around 536,472 tCO2e
• Logistics and advocacy: no spend disclosed, because costs cannot be separated; logistics is projected at 3% of Scope 3, around 102,243 tCO2e

Financing also flows through the Green Fashion Initiative and the Apparel Impact Institute Fashion Climate Fund (page 75).

Targets related to climate change mitigation and adaptation

Reference: pages 76, 78.

2030 (baseline 2019): cut absolute Scope 1 and 2 by 56%; cut absolute Scope 3, excluding indirect use-phase emissions, by 56%. 2040: cut each by 90% and reach absolute net-zero (page 76). The targets were validated against the SBTi Net-Zero Standard and approved in 2022 as consistent with 1.5°C, and are voluntary (page 76). 2019 was chosen as a year not affected by the pandemic.

Supporting targets (page 76): 36% less store electricity per square meter and opening hour by 2030 against 2016; 100% renewable electricity matched in own operations by 2030, at least half through virtual power purchase agreements; phase out on-site coal at suppliers by 2026; 100% renewable electricity at Tier 1 to 3 suppliers by 2030.

Progress in 2025 (pages 78-79): Scope 1 and 2 down 41% against 2019; Scope 3 under the target down 34.6% against 2019 and 13.6% on 2024. Store electricity intensity is down 32% against 2016. On-site coal boilers fell to 10 factories from 118 in 2022 (page 78).

Energy consumption and mix

Reference: page 78 (method page 80).

Own operations, 2025 (2024 in brackets):

• Total energy consumption: 1,146,868 MWh (1,173,864)
• Fossil: 147,347 MWh, 13% of the total (153,899; 13%)
• Nuclear: 8,205 MWh
• Renewable: 991,316 MWh, 86% of the total
• Renewable share of electricity: 95% (96%); share from power purchase agreements with new renewable generation: 49.1% (19.6%)
• Energy intensity: 5 MWh per SEK m of net revenue

All activity falls under one NACE code (G47.5), so total consumption is also reported as high climate impact sector energy.

Entity-specific (page 78): in the textile supply chain, 48% of 1,127,954 MWh of electricity was matched with renewables. Consumption rests mainly on metered and invoiced data, with estimates where data is missing (page 80).

Gross Scopes 1, 2, 3 and total GHG emissions

Reference: pages 78-79; method pages 80-81.

2025, tCO2e (change on 2024):

• Scope 1: 25,131 (-11.8%)
• Scope 2, market-based: 17,039 (+0.2%); location-based: 337,786 (-9.4%)
• Scope 1 and 2, market-based: 42,170 (-7.3%), down 41% against 2019
• Scope 3, total: 6,813,000 (-12.5%); under the science-based target, excluding indirect use-phase: 4,865,000 (-13.6%), down 34.6% against 2019
• Total, market-based: 6,855,000 (-12.5%)

Scope 3 was calculated with 26% primary data (page 78). The company says no relevant activities exist in categories 2, 8, 9, 10 and 13, so they are excluded (page 80). Biogenic emissions were not calculated for 2025 (pages 78, 80). Categories 1, 4, 5, 6 and 12 were recalculated and prior periods restated; the changes cut 2024 full Scope 3 by 11%, or 984,000 tCO2e (pages 63, 81).

GHG removals and GHG mitigation projects financed through carbon credits

Reference: page 77. The main ESRS index (pages 123-125) has no E1-7 row, but the datapoint table lists "E1-7 GHG removals and carbon credits paragraph 56" at page 77 (page 126), which is the basis for recording it as reported.

Removals: the company has "entered into 23 offtake agreements for permanent carbon removals", starting with a 2022 direct air capture contract with Climeworks, and it is a member of Frontier. At the end of 2025 it had not canceled any permanent removal credits and had received 388 tonnes. Agreements deliver credits up to 2033, verified under PURO or ISOMETRIC standards. It has no removal projects inside its value chain. The credits target residual emissions in 2040, expected at no more than 10% of the 2019 baseline.

Credits: through the LEAF Coalition (jurisdictional REDD+ in Pará, Brazil) it expects credits in 2027. It states "For 2025 we have not retired or taken delivery of any carbon credits" and makes no GHG-neutrality claim based on them (page 77).

Internal carbon pricing

Reference: page 77. The ESRS index lists E1-8 without a visible page number; the content below is on page 77.

H&M Group applies an internal shadow price of USD 20 per tonne CO2e (2025) in the product income statement used by assortment and sourcing teams, so carbon cost enters decisions on materials and manufacturing sites. It is applied to each order and covers raw material extraction, Tier 1 to 3 production and transport across the value chain. That is about 57% of total Scope 3 emissions. Scope 1 and 2 are not covered.

The price was set from the estimated cost of reaching the 2030 Scope 3 target and is expected to rise as emissions fall. A cap avoids disruption to operations. The company says the price is not based on scientific principles and is not reconciled with the financial statements, and that the carbon price used in the TCFD financial risk analysis (expected carbon taxes and border adjustment mechanisms) is a different figure (page 77).

Policies related to pollution

Reference: pages 82-83, 120.

Two policies govern pollution: the environmental policy and the chemical restrictions list. Both commit the company to chemical compliance and to the quality of wastewater discharge. They cover preventing and controlling hazardous chemicals, including substances of concern and substances of very high concern, and limiting microfibres and microplastics (page 83).

The sustainability commitment, signed by every business partner, requires safe chemical handling, wastewater treatment and hazardous waste management. Local environmental management systems and an OHS guideline add incident preparedness requirements (page 83).

The chemical restrictions list follows the AFIRM Restricted Substances List and the ZDHC Manufacturing Restricted Substances List (MRSL), applies to all products and is binding on suppliers. It is reviewed annually, and the head of product offer development and support leads implementation (page 120).

Actions and resources related to pollution

Reference: pages 82-83.

Securing wastewater quality (page 83): since 2023 the company has tested discharged wastewater and checked how well on-site effluent treatment plants work at Tier 1 and 2 suppliers, against the ZDHC Wastewater Guidelines and with a focus on priority pollutants. Non-compliant suppliers must fix the problem and are retested at once, then monthly until they comply.

Chemical compliance (page 83): the AFIRM RSL and ZDHC MRSL are applied in the supply chain. All relevant supplier units had annual wastewater testing, with results published on the Detox.Live platform. Suppliers submit monthly chemical usage data to the ZDHC Gateway, which produces InCheck reports on MRSL compliance.

Microfibres (pages 82-83): the company supports research on fibre shedding, evaluates treatment technologies, is a founding signatory of the Microfibre 2030 Commitment and has begun adding fibre fragmentation testing to material selection and product development.

The company discloses no spend for these actions, saying costs "cannot be separately identified" (page 83).

Targets related to pollution

Reference: pages 82-83.

• 2025: keep 100% of Tier 1 and 2 production units with on-site effluent treatment plants at ZDHC wastewater compliance (Foundation Level)
• 2030: raise chemicals in Tier 1 and 2 production units assured to meet ZDHC MRSL requirements to 95%

The targets are voluntary and developed with WWF but not validated by an external party (page 83). They cover the supply chain. 2025 results (page 83): 100% of units compliant at Foundation Level; 92.6% of chemicals assured to meet MRSL requirements.

Pollution of air, water and soil

Reference: pages 82-83.

Pollution-related impacts sit mainly upstream. The company states that water pollution "mainly occurs during manufacturing, not within our own operations" and that, because industry-wide data and methods are limited, it currently cannot quantify these emissions. It aims to improve data collection and disclose more in future reports (page 82). No amounts of pollutants emitted to air, water or soil are reported. The datapoint table lists the E-PRTR pollutant datapoint (paragraph 28) at page 82.

Metrics given instead (page 83): 100% of Tier 1 and 2 units with on-site effluent treatment plants meet ZDHC wastewater requirements at Foundation Level, verified by biannual testing at accredited third-party laboratories (COD, BOD, total suspended solids, pH, temperature); 92.6% of chemicals in Tier 1 and 2 units are assured to meet ZDHC MRSL requirements. No estimates are used for either metric.

Policies related to water and marine resources

Reference: pages 84-85, 120.

The environmental policy commits the company to reducing negative environmental impact and to working with stakeholders on managing water sources. It covers water use, water treatment and pollution prevention. A water management instruction supports monitoring of consumption, wastewater quality standards and consistent reporting (page 85).

The sustainability commitment sets binding supplier requirements: metering and quarterly reporting of withdrawals, separate tracking of water used in wet processing, treatment of industrial wastewater to ZDHC standards or stricter legal limits, water-efficient equipment, and water reclamation or recycling (page 85).

The company says it has "not adopted dedicated policies on oceans and seas", but supports protection of arctic ecosystems by signing the Arctic Corporate Shipping Pledge (page 85).

Actions and resources related to water and marine resources

Reference: pages 84-85.

Actions focus on Tier 1 and 2 suppliers with wet processing (page 85):

• Improving water efficiency: piloting water-saving technologies, investing in waterless dyeing and helping suppliers write water roadmaps suited to local conditions.
• Increasing recycled water: supporting suppliers in adopting water recycling, including a project with a consortium of partners at Fakir Knitwear Ltd. under the Sustainable Manufacturing and Environmental Pollution Programme (SMEP) in Bangladesh.

The company also monitors water intensity at wet processing sites and screens sites with the WWF Water Risk Filter (page 84). It discloses no spend for these actions, saying costs "cannot be separately identified" (page 85).

Targets related to water and marine resources

Reference: pages 84-85.

Absolute freshwater use in wet processing units, against a 2022 baseline: -10% by 2025 and -30% by 2030 (page 85). The targets are voluntary and validated by WWF; they cover wet processing units in the supply chain.

Progress (page 85): freshwater use at Tier 1 and 2 supplier facilities fell 22.8% against the 2022 baseline and 11% against 2024, driven by lower material weight, efficiency measures and more recycling and reuse. Recycled water reached 20.3% of use (18.4% in 2024; 11.3% in 2022). Total water use in the supply chain was 41,238,915 m3 (46,476,830 in 2024; 48,006,918 in 2022).

Transition plan on biodiversity and ecosystems

Reference: page 86.

The company states it has "not adopted a transition plan to manage matters related to biodiversity and ecosystems". Its biodiversity actions follow the Avoid, Reduce, Restore, Regenerate, Transform (ARRRT) framework and the Global Goals on Biodiversity (Kunming-Montreal framework) (page 86).

On strategy and business model, the SBTN mapping and WWF Risk Filter identified dependence on land, water and ecosystem services for inputs such as cotton. The resilience analysis indicates that ongoing efforts to raise the share of recycled and sustainably sourced materials support resilience over one to five years. The company plans to develop its biodiversity risk analysis further in 2026, in line with the TNFD framework (page 86). No biodiversity-sensitive areas were found in its own operations or sites under direct control (page 86).

Policies related to biodiversity and ecosystems

Reference: pages 86, 120.

The environmental policy commits the company to contributing to reversing nature and biodiversity loss in line with the Kunming-Montreal Global Biodiversity Framework. It covers land use and conversion, biodiversity and ecosystems, and dependence on finite resources such as virgin materials (page 86).

The sustainability commitment requires partners to protect biodiversity during raw material extraction, including deforestation-free supply chains, and to prioritize raw materials verified by credible third parties (page 86). There is no dedicated policy on marine resources or sustainable oceans and seas; the company signed the Arctic Corporate Shipping Pledge (page 86).

A footnote says that areas sensitive for biodiversity and threatened species were identified in the value chain, and that "Current policy does not address these areas" (page 86).

Actions and resources related to biodiversity and ecosystems

Reference: page 87.

• Avoiding conversion of land and natural ecosystems: more sustainably sourced materials, certified through frameworks that bar ecosystem conversion (FSC, Responsible Wool Standard), stronger internal risk procedures and traceability at Tier 4. Planned through 2030.
• Reducing land footprint: more recycled materials and support for farming practices that improve soil health and water retention, including ROC-certified materials and projects with Better Cotton Initiative, IDH and Materra.
• Land restoration in India: SEK 1.8 m OpEx in 2025, including the Satpura-Pench project with WWF.
• Land restoration in South Africa: SEK 1.3 m OpEx in 2025, including the Regenerative Wool Production Project in the Eastern Cape Drakensberg Grasslands with WWF.

The first phase of both projects ended in 2025 and a new phase runs 2026-2030. The actions did not use biodiversity offsets (page 87).

Targets related to biodiversity and ecosystems

Reference: pages 86-87.

The company says it has "not yet set biodiversity-related targets for 2025". During 2025 it evaluated science-based biodiversity targets using the SBTN framework and intends to adopt land-related targets in 2026, covering the upstream value chain and focused on reducing its land footprint and the risk of land-use change, deforestation and ecosystem degradation (page 87).

Its existing materials targets, which aim to raise the share of recycled and sustainably sourced materials, are described as related to actions that reduce pressure on ecosystems (page 87; targets on page 89).

Policies related to resource use and circular economy

Reference: pages 88-89, 120.

The environmental policy commits the company to decouple growth from the use of critical and finite resources, to circulate products and materials at their highest value, and to move away from virgin materials toward recycled or sustainably sourced ones. It covers resource inflows and outflows (page 89).

The sustainability commitment requires business partners to manage resources and waste responsibly. The company also follows the EU Waste Framework Directive and Waste Hierarchy and the Ellen MacArthur Foundation's principles of eliminating waste and pollution, circulating products and materials, and regenerating nature (page 89).

The chief sustainability officer is accountable for implementing the policy, which is reviewed annually (page 120).

Actions and resources related to resource use and circular economy

Reference: pages 89-91.

2025 spend (pages 89-90):

• Recycled materials: SEK 801 m OpEx. Includes investment in Syre for textile-to-textile recycled polyester and a multi-year agreement to source CIRCULOSE as a replacement for virgin viscose.
• Sustainably sourced materials: SEK 443.5 m OpEx, including FSC-certified wood-based materials and two new farming projects aimed at 35,000 farmers.
• Resale: SEK 1,118.6 m OpEx and SEK 47.4 m CapEx, across Sellpy, H&M, Weekday, ARKET and COS.

No spend is disclosed for durability and recyclability work or for raising the share of waste sent to reuse and recycling, because costs are built into normal operations (pages 90-91). The company also joins industry initiatives, including the Ellen MacArthur Foundation, Textile Exchange, Canopy Style and the UNIDO SWITCH2CE pilot in Bangladesh (page 91).

Targets related to resource use and circular economy

Reference: page 89.

• 2025: at least 30% recycled materials in commercial products
• 2030: 100% recycled or sustainably sourced materials in commercial products, aiming at 50% recycled, and 100% in packaging

Supporting targets exist for cotton, polyester, wool, man-made cellulosic fibers and wood (page 89). The targets are voluntary, and the company says they "do not specifically cover increased circular product design, material use rate, minimisation of primary raw materials or waste management" (page 89). It has set no targets for resource outflows and waste (page 89).

2025 results (page 91): 91% of commercial product materials recycled or sustainably sourced and 32% recycled, meeting the 2025 target. For packaging, 86% recycled or sustainably sourced and 51% recycled.

Resource inflows

Reference: pages 91-92; method pages 92-93.

Total weight of materials in commercial products and packaging: 595,179 tonnes in 2025 (652,012 in 2024), of which 85% commercial products and 15% packaging. Biological materials are 70% of the total, and 78% of those are sustainably sourced. Recycled materials weigh 209,070 tonnes, or 35% (33% in 2024) (page 91).

Commercial products used 506,015 tonnes of material for 364,093 tonnes of product. Mix by weight: cotton 56%, polyester 23%, wood and man-made cellulosic fibers 8%, polyamide 4%, wool 1% (page 91). Packaging weighed 89,165 tonnes (92,038 in 2024): paper 58%, cardboard 23%, plastic 12%, wood 6% (page 92).

Method changes (pages 92-93): the commercial materials period now matches the financial year, and textile labels are excluded from packaging volume; 2024 figures were restated.

Resource outflows

Reference: pages 90-93.

Products and services (page 90): the company tests products against internal quality standards for durability, updated its internal definitions of recyclability, and says durability, repairability and recyclability have no legal or standard definition in apparel. It scales resale and garment collection.

Resale (pages 91-92): 0.8% of turnover (SEK 1,844 m), up 31% on 2024, offered in 26 markets.

Garment Collect program (page 91): 17,808 tonnes collected in 54 selling markets; 60% went to reuse, 29% to recycling and 11% to disposal.

Own operations waste (pages 91-92): 91% directed to reuse and recycling, 7% to disposal and 2% to landfill. The landfill share is mainly mixed waste, such as food packaging, mixed foils and desiccants.

The company has set no time-bound targets for resource outflows and waste (page 90). Waste detail is under E5-5-Waste.

Waste

Reference: pages 92-93.

Total waste generated in own operations: 54,766 tonnes in 2025, made up of 5% product waste, 85% packaging waste and 10% other operational waste (page 92).

Non-recycled waste: 7,470 tonnes, 14% of operational waste (pages 92-93). Non-product waste from stores and offices is excluded because landlords manage most of it. For hazardous waste, all volume is assumed to go to incineration without energy recovery (pages 92-93).

Policies related to own workforce

Reference: pages 100-101, 120.

The company is guided by its human rights policy, social policies and supporting guidelines. The social policies cover equality, inclusion, diversity, non-discrimination, harassment prevention, health and safety, labor relations, grievance handling and compensation. They rest on the UN Guiding Principles, the ILO declaration, OECD Guidelines and relevant UN conventions (pages 100-101).

The company prohibits trafficking, forced labor and child labor, and commits to ending discrimination and harassment. Policies include specific commitments for vulnerable groups, bias-aware recruitment, inclusion training and colleague resource groups (page 101). Anonymous reporting runs through the Speak Up channel (page 101).

Social policies apply to all employees of the group and its fully owned entities. Senior operational executives implement them under the chief human resources officer, and they are published on the company website (page 120).

Taking action on material impacts on own workforce

Reference: pages 101-102.

Actions in 2025 (pages 101-102):

• Labor rights: minimum employment standards extended to bar all forms of forced labor for directly contracted employees; support for freedom of association and collective bargaining.
• Wellbeing, health and safety: a global occurrence handling system launched to register and track incidents; an annual global health and safety week.
• Inclusion: bite-sized inclusion and diversity training, awareness campaigns, employee-led colleague resource groups and a global I&D dashboard.
• Adequate wages and working hours: global compensation data harmonized and a method added to test wages against living wage benchmarks.
• Talent: refreshed leadership principles, a leadership development program and a global onboarding program for leaders.
• Data privacy: encryption, access controls, privacy risk assessments and training.

For each action the company says it does not disclose spend because costs are built into normal operations and "cannot be separately identified" (pages 101-102). It does not expect material restructuring or workforce reductions from its climate targets (page 100).

Targets related to own workforce

Reference: pages 101-102.

Target for 2028: "Improve employee engagement year-on-year and increase the satisfaction score (eSAT) to 80" (page 101). The target is relative, voluntary and not required by legislation. No stakeholders took direct part in setting it; the company consulted the European works council and local trade unions (page 101).

Progress (page 102): the eSAT score reached 77, up from 76 the year before, the highest since the survey began. The score comes from a 5-point scale question, "How happy are you working at [brand]", converted to 0-100 (page 105). Engagement is reported as an entity-specific disclosure in the ESRS index (pages 124-125).

Characteristics of the undertaking's employees

Reference: page 103; method page 104.

Headcount at 30 November 2025: 132,403 employees, 100,813 female and 31,590 male (no other gender categories are reported).

Non-guaranteed hours employees: 0. Largest countries: Germany 15,988; USA 14,534; Sweden 10,262; other countries 91,619.

Turnover: 77,555 employees left, a rate of 59.2%. The company says turnover is structurally higher in retail because of part-time contracts and seasonality (page 103).

Collective bargaining coverage and social dialogue

Reference: page 103; method page 104.

Nearly half of the workforce, 49% of total employees, was covered by collective bargaining agreements or represented by trade unions in 2025 (page 102). The calculation compares employees covered by an agreement or union representation with total headcount at 30 November, with data from local payroll systems (page 104).

A table shows coverage in ranges (0-19% to 80-100%) for EEA and non-EEA countries with more than 50 employees representing over 10% of the workforce, and workplace representation for EEA countries (page 103). The European works council and a global framework agreement with UNI Global Union provide further social dialogue (page 100).

Diversity metrics

Reference: page 103; method page 104.

Top management by gender: 53 women (51%) and 51 men (49%). Top management means managers reporting directly to the CEO and managers reporting directly to them (page 104).

Employees by age:

• Under 30: 67,676 (51.1%)
• 30 to 50: 53,881 (40.7%)
• Over 50: 10,846 (8.2%)

Board gender diversity is reported under GOV-1: 50% female (page 64).

Adequate wages

Reference: pages 102, 104.

The company reports that "No gaps were identified in relation to adequate wage benchmarks, indicating that all employees earn at or above adequate wage levels, in every country of operation" (page 102).

The metric is the percentage of employees paid below the applicable adequate wage benchmark, in total and by country. It compares individual gross pay at 30 November with agreements, legal wage levels and benchmarks, including the WageIndicator Foundation's living wage guidance, with local reviews to validate results (page 104). In 2025 the company added a method for comparing wages with living wage benchmarks and plans biannual checks (pages 101-102).

Training and skills development metrics

Reference: page 104. The ESRS index marks S1-13 with a footnote on phase-in (pages 124-125), while page 63 says all phase-in provisions were used "except S1-13".

Average training hours per employee in 2025: 15.7 hours for women and 15.1 hours for men (page 104).

Scope: all employees with access to the digital learning platforms, plus learning managed outside the global platform but tracked locally. On-the-job training is excluded, which the company says "may understate total learning hours". Average hours are total tracked hours divided by the average number of employees by gender (page 105).

Health and safety metrics

Reference: page 104.

2025 (page 104):

• Own workforce covered by the health and safety management system: 100%
• Fatalities from work-related injuries and ill health: 0 (own workforce) and 0 (other workers on company sites)
• Recordable work-related accidents: 3,190
• Rate of recordable accidents: 17.5, per one million hours worked

Recordable incidents include fatalities, lost-time injuries, restricted work cases and medical treatment. Data comes from the global incident and accident system, supplemented by manual reporting where system coverage is incomplete, and the method follows ISO 45001 (page 104). The datapoint on days lost to injuries and illness is marked "Subject to phase-in" (page 126).

Remuneration metrics (pay gap and total remuneration)

Reference: page 102; method page 105.

The company states that the "gender pay gap, expressed as a percentage of the average pay level of male employees, amounted to 99.7 percent" and that the annual total remuneration ratio between the highest paid individual and the median salary was 90.4 (page 102).

Method (page 105): the gap is "the difference between the average gross pay of male and female employees", weighted by the number of employees in each job and expressed as a percentage of male pay, using gross hourly pay for all employees. Remuneration covers base salary, cash allowances, bonuses, commissions, cash profit-sharing, other variable cash pay and long-term incentives; benefits in kind are excluded. No estimates are applied.

Review flag: a 99.7 percent figure for a "gap" defined as a difference looks more like pay parity; check against the report.

Incidents, complaints and severe human rights impacts

Reference: page 104.

2025 (page 104):

• Incidents of discrimination: 0
• Fines, penalties and compensation for discrimination incidents, including harassment and complaints: 0
• Severe human rights issues and incidents connected to own workforce: 0, including cases of non-respect of the UN Guiding Principles and OECD Guidelines
• Fines, penalties and compensation for severe human rights issues: 0

The table also gives counts of complaints filed through channels for the own workforce and complaints filed to OECD national contact points. Data comes from the Speak Up platform. Anonymous reporting is allowed, which limits verification of origin, but all cases are reviewed internally (page 105).

Policies related to value chain workers

Reference: pages 107-108, 120.

The human rights policy sets out the commitment to respect the rights of all people along the value chain. Every business partner must sign and follow the sustainability commitment and code of conduct for business partners, which require respect for the rights, wellbeing and dignity of all individuals and require partners to pass these standards to their own suppliers (page 108). Partners must provide an effective grievance mechanism and a remediation process (page 108).

A footnote states that, to date, no cases of non-respect of the UN Guiding Principles, the ILO Declaration or the OECD Guidelines involving value chain workers have been reported in operations or the supply chain (page 108). The human rights policy covers own operations and the upstream and downstream value chain, and the chief sustainability officer oversees it (page 120).

Taking action on material impacts on value chain workers

Reference: pages 109-110.

Actions by tier, all without disclosed spend because costs "cannot be separately identified" (page 109):

• Tier 4 (raw materials): stronger due diligence and work with the Better Cotton Initiative and Organic Cotton Accelerator on decent work.
• Tiers 1 and 2: annual assessments of all partners; occupational health and safety and gender-based violence training; OHS committees required at Tier 1; ethical recruitment training; overtime monitoring; wage management systems and digital wage payments.
• Logistics: announced and unannounced audits of warehouses and container freight stations in high-risk countries.

2025 results (page 110): Tier 1 units employed 1,128,629 workers, 59% women. Units with health and safety committees: 95% (96% in 2024). Units with trade union representation: 36% (39%); with collective bargaining agreements: 29% (33%). Digital wage payments covered 84% of Tier 1 workers. Three Cambodian factories signed collective agreements with a wage component.

Targets related to value chain workers

Reference: pages 108-110.

• 2025: maintain 100% of Tier 1 production units with access to grievance handling and dispute resolution procedures
• 2028: enroll 100% of strategic Tier 1 production units with wage risk in the wage management system
• 2030: train 1 million workers on occupational health and safety and on gender-based violence and harassment

The targets are voluntary and no value chain workers took direct part in setting them; the company consulted the ILO, Better Work, IndustriALL and IF Metall (pages 108-109). The grievance target was not externally validated (page 109).

Progress (page 110): grievance access stayed at 100%. Wage management system enrollment reached 80%. The training target was set in 2025 and a system to measure progress is still being developed.

Policies related to affected communities

Reference: pages 111-112, 120.

Two policies apply: the human rights policy and the sustainability commitment. They commit the company to respecting land rights, protecting access to natural resources and ensuring operations do not contribute to ecosystem degradation or weaken community livelihoods (page 111). Where indigenous peoples may be affected, the company is committed to meaningful consultation and seeks free, prior and informed consent, and it refers to UNDRIP and ILO Convention 169 (pages 111-112).

Community engagement is supported by grievance mechanisms, including anonymous channels, and a commitment to enabling remedy and protecting human rights defenders. A footnote states that, to date, no cases of non-respect of the UN Guiding Principles, the ILO Declaration or the OECD Guidelines involving affected communities have been reported (page 112).

Taking action on material impacts on affected communities

Reference: pages 112-113.

• Land rights and livelihoods: partnerships with the Better Cotton Initiative, Responsible Wool Standard and FSC, which uphold community and indigenous peoples' rights. BCI requires high conservation value assessments before land conversion; RWS and FSC require free, prior and informed consent (pages 112-113).
• Clean water and a healthy environment: all Tier 1 and 2 suppliers must meet national rules and ZDHC wastewater standards, and supplier units with wet processes must have a working effluent treatment plant. The company works with WWF on river basin water quality (page 113).

The company says it does not disclose spend because costs "cannot be separately identified" (page 113). It describes its progress as qualitative and says it aims to define measurable outcomes in future cycles (page 113).

Targets related to affected communities

Reference: page 112.

The company states: "For 2025, we have not set any time-bound and outcome-oriented targets related to affected communities." It focuses instead on gathering views from people in affected communities and building them into strategy, through stronger due diligence and stakeholder engagement (page 112).

It links its pollution-related targets indirectly to access to a clean and healthy environment, and its resource-related targets to safeguarding the land rights and livelihoods of farmers in its supply chain (page 112).

Policies related to consumers and end-users

Reference: pages 113-114, 120.

Three policies apply: the product compliance policy, the ethical product design policy and the data privacy policy (page 114). The product compliance policy covers product and children's safety, chemicals, physical properties, labeling and consumer-facing claims, and was introduced in the reporting year (pages 114, 121). The ethical product design policy, in use since 2019, guides inclusive and respectful product development and campaigns. The data privacy policy sets binding rules for handling personal data under the GDPR and other privacy laws (pages 114, 121).

A footnote states that no cases of non-respect of the UN Guiding Principles, ILO Declaration or OECD Guidelines involving consumers and end-users have been reported, and no severe human rights issues connected to them (page 114).

Taking action on material impacts on consumers and end-users

Reference: pages 114-115.

• Responsible marketing: since 2019 the ethical product design policy has guided diverse representation, healthy lifestyles and respect for cultural norms, with team training, ethical research guidelines, a cultural restrictions database and a naming tool (page 114).
• Product safety: a formal product compliance policy launched in 2025, with a governance model covering regulatory monitoring, risk assessments, testing, supplier inspections and consequence management, plus training for staff and suppliers. Risk assessment is the 2026 focus (page 115).
• Customer data privacy: encryption, regular privacy assessments, a structured data privacy framework and ongoing training, backed by a dedicated budget (page 115).

Spend is disclosed for none of these actions, because costs "cannot be separately identified" (pages 114-115). Substantiated privacy complaints: 6 in 2025, as reported under S4-3.

Targets related to consumers and end-users

Reference: page 114.

The company states: "For 2025, we have not set any time-bound and outcome-oriented targets related to consumers and end-users." It focuses instead on gathering insights from direct customers to act on their views, through stronger due diligence and stakeholder engagement in line with international standards (page 114).

Business conduct policies and corporate culture

Reference: pages 117-118, 120-121.

Corporate culture is guided by the document "Our way" and the code of ethics. All employees must comply with the code, which sets zero tolerance for corruption and bribery and is consistent with the UN Convention against Corruption. Employees are trained on it at onboarding (page 118).

Suppliers and business partners must sign the sustainability commitment and the code of ethics for business partners. Suppliers handling animal-derived materials or beauty products must also follow the animal welfare policy (page 118).

Whistleblowing: the externally available Speak Up channel takes reports from employees, suppliers and other stakeholders, anonymously where local law allows. The company says it does not tolerate retaliation against good-faith reporters. All allegations are investigated confidentially (pages 118-119, 121). The code of ethics policies are led by senior operational executives, with oversight by the head of group security operations (page 121).

Targets related to business conduct

Back-filled from the business conduct chapter (page 119), where targets and effectiveness fall under the Minimum Disclosure Requirements rather than a numbered disclosure requirement. G1-3 became a standalone DR only in the 2025/2026 ESRS.

H&M Group states: "We have not set any time-bound and outcome-oriented targets relating to business conduct for 2025." It focuses instead on building a corporate culture that reflects its values and on managing supplier relationships and corruption risk through clear policies and procedures (page 119).

Effectiveness is tracked without a target: the company tracks the number of code of ethics violations each year, covers 100% of functions at risk with anti-corruption training, and reports investigation outcomes to the CEO, CFO and audit committee. Confirmed breaches lead to corrective actions, stronger controls and targeted training (page 119).

Incidents of corruption or bribery

Reference: page 119.

2025 (page 119):

• Convictions for violations of anti-corruption and anti-bribery laws: 0
• Fines for such violations: 0
• Substantiated cases of corruption and bribery: 2

Code of ethics non-compliance (entity-specific): 31 reported incidents of potential non-compliance, including reported corruption cases, among employees and business partners; 8 substantiated cases. Sanctions: employees, 7 terminations and 2 warnings; business partners, 0 warnings (page 119).

Data comes from litigation files and Speak Up reports, reviewed by group legal and group security. Anonymous reporting limits verification of the source of some cases, and no estimates are used (page 119). The datapoint on standards of anti-corruption and anti-bribery is listed at page 118 (pages 128-129).