CHINA - H&M Should-Be Stand

The CEO of H&M faces a dilemna in this article, "H&M vows to rebuild trust in China after Xinjiang backlash". This is due to an 2020 article resurfaced on social media that says the company "expressed concern about the allegations of forced labor in Xinjiang and said it would no longer source cotton from there". The Chinese is mounting a campaign to discredit H&M, causing several of its physical stores to close, and its online presence to disappear. China is H&M’s fourth-biggest market by sales, so the company cannot afford to make the Chinese government angry. What should the H&M's CEO do?

DocNgu Doodles says that the CEO should direct the company to state clearly that it only sources cotton from places that it is allowed to verify that there is no forced labor, no child labor, and other specific human rights related issues. These other issues must be stated specifically and not in general terms. Its statement will not mention China nor any other countries. The company should not drop buying from a location because of "expressed concern" about "allegations". This is hearsay. The company should send a team to investigate. If the country does not allow the team to investigate, then the company will drop buying from that country due to "it is not allowed to verify that there is no ... etc ...". For the China issue, the onus is now on China to allow an independent investigation. The pressure is then removed from H&M CEO since she can claim she just follows a very clear policy of the company.