MIT Sloan Management Review Article on 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.

About the Author

N. Craig Smith is the INSEAD Chair in Ethics and Social Responsibility, director of the Ethics and Social Responsibility Initiative at the INSEAD Hoffmann Global Institute for Business and Society, and a specialist professor at the INSEAD Corporate Governance Centre.

Markus Scholz (@scholz101) holds the Endowed Chair of Corporate Governance & Business Ethics and is head of the Institute for Business Ethics and Sustainable Strategy at the University of Applied Sciences for Management & Communication in Vienna. He is also a visiting scholar at INSEAD’s Ethics and Social Responsibility Initiative.

Jane Williams is a writer and editor who has conducted research in association with INSEAD’s Ethics and Social Responsibility Initiative.

Learn more about MIT SMR.