What Sipp

SIPP: WHAT
Valid for all brands in H&M group
SIPP: WHAT
AN OVERVIEW OF WHAT THE SUSTAINABLE IMPACT
PARTNERSHIP PROGRAM (SIPP) CONTAINS
Sustainability Version 1.0

July 2015
WHAT DOES SIPP CONTAIN
VALIDATION SELF ASSESSMENT SELF REPORTING
• MINIMUM REQUIREMENTS • HIGG – Social Labour Facility • H&M Performance Data both
Module & Environment on Social & Environment
Facility Module
SUSTAINABLE IMPACT PARTNERSHIP PROGRAM – 3 STEP APPROACH
2015 2016
MINIMUM REQUIREMENTS
MINIMUM REQUIREMENTS CLASSIFIED INTO FOUR SUBJECTS
• Chemical inventory list. • Anti-harassment and anti- • Delaying self reporting • Transparent reporting
Environment
Progress
Business Practice
Social
• Chemical purchasing procedures discriminatory recruitment • No Progress (over 2 years) • Non use Undeclared Unit
• No use of H&M banned organic policy • Non use of Sandblasting
solvents • Employment Contract • Non use of Child labor
• Energy METERs • No subcontract to prison • Legal Licences,
• Water METERs water inlets • Forced Labor policy/no forced
• Water METERs discharge points labor
• BSR /legal water quality • Child Labor policy
standards • No Child labor
• Wastewater treated • No pregnancy testing
• Minimum wage
• Overtime premium
• Written policy on Freedom of
Association(If applicable) / No
violation to freedom of
association
• Grievance policy
• Anti-harassment and anti-abuse
policies
• Fire alarm
• 2 unlocked emergency exits
• Clear emergency exit routes
• Fire extinguishers
CONSEQUENCE OF LETTER OF CONCERN
– Failing to meet the minimum requirements will generate a letter of concern.
– Each letter of Concern will be scored and render a On-Hold Status for the Production Unit
– A letter of Concern in principal will be sent to the Supplier & Production Unit
– When the Supplier receives a LoC a correction action plan is needed on how & when the
violation will be rectified. Timeline should be mutually agreed, ie quick fix issues will have a
short timeline and more complicated issues can have a longer time line.
– Once the violation is rectified or correction plan is seen in progress the Production Unit
receives the “Approved status” again.
– Repeated violations will lead to stop of production
– Stop production means no more production for 5 years.

SCORING ON LETTER OF CONCERN
– Violation on Business Practice leads to 2 Points
– Repeated violation (of the same type) within 2 years leads to 8 points ( 4 times )
– Violation on Social & Environment Minimum requirement leads to 1 Point
– Repeated violation (of same type) leads to 3 points ( 3 times)

BUSINESS PRACTICE (BP) RULES
Supplier Letter of Concern Scoring

PU 1 PU 2 PU 3 Score Total
Case 1 BP 1 Child labor 2

Consequence LC & Remediation 2
Within 2 years
Case 2 BP 2 Fake documents 2

Case 3 BP 3 Unit of undeclare unit 2
Consequence STOP PU 1 exceeds 5 score 6

Within 2 years

Case 2 BP1Child labor 8
Consequence STOP SUPPLIER equals 10 score 10

Case 2 BP 2 Fake documents 2
Within 2 years

Case 3 BP 3 UUU 2
Case 4 BP 1 or 2 or 3 BP 1 or 2 or 3 BP 1 or 2 or 3 8
Consequence STOP SUPPLIER exceeds 10 score 14
SOCIAL & ENVIRONMENT MINIMUM REQUIREMENTS -MR
Case 1 MR1 1
Case 2 MR2 1
Consequence LC & Remediation & Reduce business 2
Within 2 years
Case 3 MR3 1
Case 4 MR4 1
Case 5 MR5 1
Consequence STOP PU equals 5 score 5
Case 1 MR1 1
Within 2 years
Case 2 MR1 3
Consequence LC & Remediation& Reduce Business 4
Case 3 MR1 9
Case 1 MR1 1
Within 2 years
Case 2 MR 1 3
Consequence LC & Remediation& Reduce Business 4
Case 3 MR 1 9
SOCIAL & ENVIRONMENT MIN REQUIREMENTS & BUSINESS PRACTICE

Case 1 MR1 1
Case 2 BP 1 2
Case 3 MR1 3
Within 2 years
LC & Remediation 6
Case 4 BP2 2
LC & Remediation& Reduce
Business 8
Case 5 MR2 1
LC & Remediation& Reduce
business 9
Case 6 MR2 3
STOP SUPPLIER exceeds 10 score 12
Facility Module
2015 2016
SELF ASSESSMENT
HIGG- ENVIRONMENT FACILITY MODULE
HIGG INDEX ENVIRONMENTAL MODULE STRUCTURE
Facility Environmental Facilities

Module contains 7 sections
Module
Level 3:
1. EMS or Program Delivering
2. Energy Use & improvements
Brand Greenhouse Gas
Emission
Module 3. Water Use Level 2: Setting
4. Wastewater/ Effluent goals
5. Emission to Air
6. Waste Management
Product 7. Chemicals Management Level 1: Measuring
performance and
Module demonstrating compliance
WITHOUT HIGG HIGG – LEVEL 1
Lacking Awareness and Measuring Performance and

Understanding demonstrating compliance
Compliance Cost Reduction
Reduce environmental impacts

HIGG – LEVEL 1 HIGG – LEVEL 2
Measuring Performance and Setting Goals

demonstrating compliance
Compliance Cost Reduction Continuous Cost reduction

environmental
Reduce environmental impacts improvement Communication
HIGG – LEVEL 2 HIGG – LEVEL 3
Setting Goals Delivering Improvements
Environmental Communication
Continuous Cost reduction sustainability
environmental
improvement Communication Business value Cost reduction
CHALLENGES FACED BY FACTORIES
How to clearly understand Higg requirement?

Difficulty in understanding self-assessment questions
• Lacking of internal skills set and understanding of issues
• Difficulty in engaging subject matter expert
Knowledge gaps
• Understanding the level of details required
• Identifying right supporting documents
• Absence of practice of consolidating and analyzing consumption data
• Language
Factory level staff/subject matter experts are not engaged
Over-estimate Higg performance

• Lack of understanding of key concepts
• Lack of documentation support
• Not making use of available support materials
HIGG VERIFICATION STRATEGY
Prioritizing verification
Understanding Higg verification process

• Conduct desktop review
• Review Higg self assessment answer
• Review H&M env. Performance data
• Obtain documents where necessary
• Conduct onsite verification where
necessary
• Provide feedback on adjusted scores and
comments
Provide support materials to suppliers
• How to Higg Manual
• H&M Env. Performance Data Guidebook
UNDERSTAND HIGG DESKTOP VERIFICATION PROCESS
– Phased process in improving Higg quality

2A HOW TO HIGG GUIDE ON FACILITY ENVIRONMENTAL MODULE
Also available in
other language!
For languages contact H&M

Sustainability team in your
Region/Country
2A HOW TO HIGG GUIDE ON FACILITY ENVIRONMENTAL MODULE
– How to Higg manual provides practical guide for suppliers to self assess and develop factory
sustainability programs using the Higg Index
Also available in
Recommended supporting
documents other language!
Step by step guidance with further

resources 
HOW TO GENERATE A QUALITY SELF-
ASSESSMENT
HOW TO GENERATE TIME EFFICIENT AND HIGH QUALITY HIGG SELF ASSESSMENT
– Right approach to Higg self-assessment
– Appoint Higg Index lead
– Engage the right staff  subject matter experts
– Follow guidelines – How to Higg, H&M Manual
– Understand data requirement
– Guiding on document preparation
– Be conservative, transparent, and right first time
– Answers should be detailed and justifiable
– When developer conducting verification…
– Adjust score with justifications
– Provide feedback to suppliers
– If the factory has already got their score verified through different channel (e.g. 3rd party, brand),
check their verification information
DRIVE SUPPLIERS’ CONTINUOUS IMPROVEMENT THROUGH 3 KEY STEPS
Self-assessment
and reporting
Level 3:
Delivering
improvements
Level 2: Setting
goals
Capacity
Improvement Level 1: Measuring
Building performance and
HIGG
SECTION-BY-SECTION
SCORING
– Each of the seven sections of the Facilities Module has questions that total 100 points per
section. Each section's score is then weighted to calculate  out of 100 points
– The Emissions to Air section is the only section that allows the questions to be skipped if they
are not applicable (a rationale/explanation must be provided)
Weighting (with
Section "Emissions to air")
Section 1 – Environmental Management System or Program 15%
Section 2 – Energy Use and Greenhouse Gas Emission 15%
Section 3 - Water Use 15%
Section 4 - Wastewater / Effluent 15%
Section 5 - Emission to Air 10%
Section 6 - Waste Management 15%
Section 7 - Chemicals Management 15%
Total 100%
EMS
ENVIRONMENTAL MANAGEMENT SYSTEM (EMS)

WHAT IS IT?
– A system to ensure that the Environmental
organisation is in conformity with policy
its stated environmental policy.
(ISO14001). Key building blocks of
an EMS: Training
Environmental
aspects
– There are a number of international

standards on environmental
management systems: EMS
– ISO14001:2004
Environmental
Management
objectives and
– BS7750 review
targets
– EMAS (Eco-Management and

Audit Scheme) Internal audit
SECTION 1 – ENVIRONMENTAL MANAGEMENT SYSTEM
EMS
KEY CONCEPTS - SECTION 1 ENVIRONMENTAL MANAGEMENT SYSTEMS OR PROGRAMME
Key concepts Higg question
• EMS audit (by 3rd party/ Internal auditor) • FAC-1.3.2

Level 3
Demonstrating • Suppliers / contractor • FAC-1.3.1
leadership in
environmental • Environmental information disclosure • FAC-1.3.3, FAC-1.3.4
management
Level 2 • Environmental Management System (EMS) • FAC-1.2.1
Establishing an • Plan-do-check-act cycle (PDCA cycle) • FAC-1.2.1

environmental
management • Management review • FAC-1.2.1
system • Environmental strategy and target • FAC-1.2.2
• Environmental aspects and impact • FAC-1.1.1

Level 1
Understanding • Significant environmental impacts • FAC-1.1.1, FAC-1.1.2
environmental impacts • Meeting Legal requirements • FAC-1.1.3, FAC-1.1.5
EMS Level 1
ENVIRONMENTAL ASPECTS AND IMPACTS

WHAT IS IT?
– ENVIRONMENTAL ASPECT: an activity at the site (e.g. manufacturing processes) that interacts
with the environment and can cause it to change (Global Social Compliance Programme, 2010)
– ENVIRONMENTAL IMPACT: any change to the environment wholly or partly resulting from an
organization’s environmental aspects (ISO14001:2004)
Aspect Impact
• Energy generation • Air pollution, climate
(steam or electricity) change
• Use of freshwater • Drying of

groundwater
• Discharge of • Water pollution
wastewater
e.g. generation of e.g. air pollution/
steam by boiler (coal, smog in the city
biofuel etc.) • Disposal of waste • Land contamination
EMS FACLevel
1.1 1
SIGNIFICANT ENVIRONMENTAL IMPACT

WHAT IS IT?
– Significant environmental impact (FAC-1.1.1): impacts which need to be prioritised for
management action to reduce the impact; impacts that would lead to out-of-compliance
consequences if left unmitigated.
 WHAT ARE WE LOOKING FOR?
– Significant environmental impact assessment – an internal evaluation of all environmental

aspects, typically be conducted under EMS program
– Environmental impact assessment (EIA) – systematic process of identifying and evaluating
the environmental impact of a project or activity (UNEP)
• Usually conducted by trained professionals (e.g. consultants, universities, research institute)
• Factories, depending on the legal requirements of the country where they are located, may
need to conduct an EIA before it starts its operation or even its construction.
• Every EIA should contain a registry/table of significant environmental impacts (most
relevant to FAC-1.1.1)
FAC 1.1
SIGNIFICANT ENVIRONMENTAL IMPACT

– Example: List of significant environmental impacts Environmental impacts are assessed by
trained professionals in detail an EIA report
(Should be updated annually)
Evaluating the
List of activities in Significant
Identify their environmental impacts environmental environmental impacts
the factory impact identified
EMS FACLevel
1.1 1
LEGAL REQUIREMENTS
– Factory should keep a list of all the regulations and permits required for operation? See
example below:
List of relevant environmental regulation
(Should be updated at least annually)
– Having this list is a mandatory requirement within ISO14001, factories which are ISO14001
certified must have a company of this list.
EMS FACLevel
1.1 1
LEGAL REQUIREMENTS
WHAT IS IT?
– There is a chance that the local requirement is stricter than the national requirement – conduct
researches or seek expert advice when in doubt.
Textile and Garment Industry DB44/26-2001 Grade 1 GB 4287-2012

Standard (Guangdong) (National)
pH 6-9 6-9
BOD ≤20 ≤25

(Biological oxygen demand, mg/L)
COD ≤100 ≤100

(Chemical oxygen demand, mg/L)
Colour ≤50 ≤70
TSS ≤70 ≤60

(Total suspended particulates, mg/L)
EMS FACLevel
1.1 1
LEGAL REQUIREMENTS
– Common misconceptions of FAC-1.1 by manufacturers – these are what we are NOT looking for:
•  Environmental inspection report by the government departments
•  Test reports of emissions sources (e.g. boiler, wastewater treatment plant)
•  Social compliance audit report
•  List of significant environmental impact without basic environmental impact (e.g. a factory
with a wastewater treatment plant without listing wastewater discharge as a significant
environmental impact
EMS Level 1
COMPLIANCE – WATER EXTRACTION PERMIT

– Use of underground water
– Observe any use of groundwater &

extraction points
– Obtain water extraction permit: Factory

should be able to provide you with valid
water extraction with following details
1. Permit valid period (i.e. date of issue

and date of expiry)
2. Number of extraction points
3. Extraction limit
Water pump for ground Water meter to track ground
4. Frequency of inspection by
water extraction water use
government bodies
EMS Level 1
WASTEWATER DISCHARGE PERMIT
– Learn about the factory’s approach on

complying with local legal requirements (e.g.
frequency of quality test)
– Valid wastewater discharge permit and

reference / title of local legal requirement is
typically referred to when reviewing legal
compliance status
Permit sample – the Philippines
Permit sample – China

EMS FACLevel
1.2 2
ENVIRONMENTAL POLICY
WHAT IS IT?
– Environmental policy (or strategy): the origin and basis of every EMS. The “plan-do-check-
act” is a key guiding principle in formulating an environmental policy.
Questions that should be answered

EMS framework
in the environmental policy
“What do you want to do on the
Policy
environment?
“What are we required to manage?”

Planning
What are the aspects?
Implementation “By what means and methodology?

& operation How to do? When to implement?
“How do we know we are doing

Checking
well? Is it effective enough?”
Review & “What can we do better? Where are

improve the barriers and constrains?
Environmental management system model (PDCA), ISO14001:2004
EMS FACLevel
1.2 2
ENVIRONMENTAL OBJECTIVE AND TARGET

–  Filing system for all documents related to environmental management system – evidence
of a well-managed environmental system (Section 4.4.4 of ISO-14001:2004)
–  Environmental policy (as discussed in the previous slide)
–  Environmental management plan, see sample below:
Sample of an environmental management plan, should be updated at least annually

EMS FACLevel
1.2 2
MANAGEMENT REVIEW
WHAT IS IT?
– Top management shall review the EMS regularly (usually annual) to ensure whether the
environmental targets and objectives have been met and to recommend for any change in the
EMS to continuous improvement of environmental performance. Key elements:
– Environmental performance of key environmental aspects;
– Extend to which the environmental objectives and targets have been met;
– Recommendation for action and follow-up action plan.

–  Minutes of management review meeting (meeting should be conducted at least annually
as per GSCP requirement)
–  List of recommendation an follow-up action plan (if any).
EMS FACLevel
1.2 2
EMS TRAINING
WHAT IS IT?
– ALL employees at the factory should have basic
understanding of the EMS in place and be aware of
their respective responsibilities in achieving the
environmental objectives and targets.
– Key topics to be covered in the training:
– Key Concepts in EMS (as discussed in this
presentation)
– Key personnel and responsibilities in achieving the
environmental objectives and targets
–  Training materials (covering the key topics)

–  Attendance record (see example)
last training: within 1 year of the date of the audit
EMS FACLevel
1.3
1.2 3
INTERNAL AUDIT
–  Audit checklist / records (at least conducted annually)
Brief
description of
performance
The audit
should cover
section 4.1 – 4.6
of ISO14001 Rating against
of EMS
requirements
Should be
accompanied by an
audit report and a
list of corrective
http://www.blackpool.ac.uk/sites/default/fi action (in case of
les/documents/gap_analysis_checklist_pe non-compliance)
er_center.pdf
EMS Level 3
ENGAGING SUPPLIERS/SUB-CONTRACTOR
WHAT IS IT?  WHAT ARE WE LOOKING FOR?
– Engagement with at least one (Higg –  Terms and condition on the service agreement
requirement) upstream supplier or sub- –  Suppliers compliance survey
–  Suppliers environmental declaration
contractor on improving the said suppliers’
environmental performance
(environmental performance of one of the
environmental aspects identified by the
factory in earlier Higg questions).
– Upstream suppliers: suppliers of raw

materials (e.g. yarn, cotton, packaging,
chemicals, etc.)
– Sub-contractor: service providers (e.g.

subcontracted washing, waste disposal and
recycling)
EMS Level 3
ENVIRONMENTAL INFORMATION DISCLOSURE

–  Environmental performance data published in publicly

available channels (e.g. annual reports, company website,
newsletters) Publicly reported data
GHG emissions
– Example of publicly reported data by PT Eratex (Indonesia- • Annual emissions: Scope 1 and 2
based apparel manufacturer) • In tCO2e
Emission to air
• NOx, PM, SO2
• Latest Test value and legal limits
Wastewater
• BOD, COD, TSS, volume (m3)
• Monthly test value and legal limits
Waste disposal
• Off-cut waste
• Monthly value in kg
Source: http://www.eratexco.com/index.php/environmental
COMMON CHALLENGES ON EMS
– Level 1:
– Unclear about terms/concepts: Environmental impact assessments
– Not articulating Higg answers, e.g. Roles and responsibilities for EMS team
– Level 2:
– Environmental permits out-of-date (e.g. Invalid permits)
– Not articulating process in ensuring environmental compliance
– Mis-concept about EMS training – not MSDS, chemical, hygiene training
– Lacking EMS system review
– Level 3:
– Unclear about terms/concepts: EMS audit/certification, disclosure of env. performance to public

SECTION 2 – ENERGY USE AND GREENHOUSE GAS EMISSION
Energy & GHG
ENERGY MANAGEMENT
WHAT IS IT?
• Why energy management?
o Cutting fuel and utility costs
o Reduce resource use
o Reduce carbon emission (e.g. burning of fossil fuels)
• What to manage?
o Major systems in energy management
Building Heating and Machinery and Operations

Lighting
Efficiency Cooling Equipment
Energy & GHG
STEPS IN ENERGY MANAGEMENT
1
Assess current performance
2
Set goals and action plan
3
Implement action plan
4
Evaluate progress
KEY CONCEPTS - SECTION 2 ENERGY USE AND GREENHOUSE GAS EMISSION
Key concepts Higg question H&M env. data
• Demonstrating energy savings • 2.3.1, 2.3.2

Level 3 • Demonstrating GHG savings • 2.3.3
Demonstrating
improvements
• Energy management
Level 2 • Energy and GHG target setting • 2.2.1-2.2.2 • 2.2.1.1-2.2.1.6,
Target setting and (Normalized and Absolute) and action plan 2.2.2.1-2.2.2.5
planning • Energy audit • 2.2.3
Level 1 • Measuring energy use baseline • 2.1.1-2.1.3 • 2.1.2.1-2.1.2.6

Measuring performance and • Metering • 2.1.1.1,2.1.1.2
demonstrating compliance • GHG inventory • 2.1.4 • 2.1.4.1, 2.1.4.2
Energy & GHG Level 1
ENERGY METERING
WHAT IS IT?
• Measure energy consumption that tracks usage over time in aggregate or sub levels
• Measurement system capabilities vary from site to site—from almost none to complete sub-
metering
Level 1: Total energy used in the factory
Level 2: At the individual workshop level
Level 3: Main energy-consuming equipment
Source: NRDC, Guide to Metering in Textile Mills

ENERGY METERING
Why energy metering? Benefits?
• Provide a simple overview of main patterns of energy use to evaluate overall

efficiency of production and report to stakeholders (such as customers)
• Provide a baseline of energy use in specific workshops and by specific
equipment before efficiency measures are put in place, in order to evaluate the
effectiveness of those measures
• Evaluate new equipment to ensure it is performing to manufacturer
specifications
• Provide real-time data on performance of existing energy-intensive processes
and equipment to evaluate whether they are being operated efficiently and
without equipment malfunction. Similar equipment or processes running in
different workshops can be benchmarked against each other, or against a
database of historical resource use to further increase performance insight
Source: NRDC, Guide to Metering in Textile Mills

ACCESS ENERGY PERFORMANCE BY ENERGY AUDIT/ASSESSMENT

WHAT IS IT?
- Conduct energy assessment/audit
o Assess all production processes and auxiliary
systems in factory Project example I:
o Identify list of energy reduction measures Electricity savings of 11%
o Calculate the exact savings in terms of energy, Coal savings 16%
Reduction of 1,850 tonnes CO2
cost and payback period
Estimated USD 225 000 per year
- An energy assessment/audit audit should identify Payback period 11 months
for the site, savings (energy and costs) and pay- • Lighting • Compressed • Ventilation and
back rates by specific investment or action (e.g., air air conditioning
investing $X in a lighting retrofit will save ___ kWh • Insulation • Steam • Condensate
annually, which equals $Z in savings and a payback system recovery
management
of ___ months.)
- If a company only provide assessment for specific
system (e.g. lighting audit), it is not regarded as
energy assessment under Higg
COMMISSION ENERGY EFFICIENCY ASSESSMENT

• Energy efficiency assessment provides factory with an overview of savings opportunities
which can then be used as the basis for planning projects and monitoring savings.
Partial samples of energy saving summaries

(Above: low-cost saving opportunities for a dyeing
mill in China. Right: energy saving opportunities for
a garment factory in Cambodia)
TECHNICAL EXAMPLES: BOILER SOLUTIONS

Practice Typical payback
Introduce regular inspection of steam traps. Replace faulty < 1.5 years
traps with higher quality longer lasting models
Pre screening equipment

Install boiler pre-screen to remove coal particles larger than < 1.2 years
3cm.
Install supplementary insulation to boiler casing, ensuring flame < 0.5 years
retardant insulation materials are used.
Install variable frequency drive to actively control boiler blower < 1.5 years
Double Lighting Layers
and fan speed in relation to oxygen concentration and furnace
pressure.
Boiler economizer
Recover heat from boiler economizer for example to preheat < 1.5 years
boiler feed water or to preheat freshwater which can then be
used for process use or staff showering.
Recover the hot waste air to preheat boiler incoming air or other < 1.5 years
processes with heating near the boiler room. Insulate ventilation
pipes to maximize heat reuse. Air pre-heater
TECHNICAL EXAMPLES: COMPRESSED AIR SOLUTIONS

Practice Typical payback
Ensure comprehensive monthly checking for air leaks. Use Immediate
ultrasonic leak monitors in noisy environments.
Ensure pressure set-point corresponds with equipment Immediate
rating. Ensure pressure drop through system is minimized.
Group high/low pressure equipment in different systems.
Water cooled compressor
Install variable frequency drive compressor and controls to <1.5 years heat recovery
minimize compressor idling time.
Install heat recovery system to capture compressor exhaust < 1.2 years
recycling to boiler feed, process or shower water. Observed examples of compressor
time-in-idle (RESET database)
Reduce ambient temperature of compressor room. < 1.5 years Time in Idle
80
60
% of Time
40
20
0
A B C D
Time in idle (%) 50 38 66 61
Graphic showing role of VFD compressor to reduce idling
TECHNICAL EXAMPLES: LIGHTING SOLUTIONS

Practice Typical Pay Back
Period
Remove redundant lamps where light is overly bright or not needed. Immediately
Up to 5% of lamps can often be removed in this way.
Eliminate ‘double layer’ where two levels of lighting overlap. Immediately
Increased use of day-lighting sensors to dim or turn lamps over 6-12 months
when day-lighting is sufficiently strong.
Switching to efficient lamp technology. Typical replacement is to <12 - 18 months
use T5 tubes instead of existing T8 tubes with a resulting energy
saving of about 30% of lighting load compared to `iron ballast’ type.
We remain cautious about reliability & cost effectiveness of LEDs.
Location Typical Illuminance (Lux)

Office 300*
Warehouse <100
Packing 300
General Workshop 300
Cut and Sew Workshop ( at 750
production lines) Excessive lux! Good use of daylighting
Differential recommended lux levels
SETTING ENERGY TARGET

WHAT IS IT?
C
– A formal target here refers to a quantified performance requirement of the site’s annual
energy use of an energy source. A formal target must:
1) include a definite start date (i.e., "baseline") and the performance level (i.e. annual energy
use or "baseline") at start date;
2) include an end date of the target, meaning the intended completion of the required
reductions;
3) include an exact reduction quantity, expressed in percentage;
– 4) be relevant to reducing the site’s energy use; and,
– 5) frequency of reviewing the target.
Benefits of setting energy target

– Provide a clear goal to improve energy performance of facility and incentives to implement
improvement measures
– For external and stakeholders communications in regards to environmental impact of facility
– Provide a benchmark to measure and track on-going energy performance
NORMALISED AND ABSOLUTE TARGETS

• To calculate a normalized value, measure utility/pollution generated in a given time period
and divide by the chosen business metric. For example, a normalized waste generation can
be calculated as follows: 10,000 kg waste ÷ 5,000 garments = 2kg waste/garment.
• Normalisation metric is often business metric (e.g. units or mass of production, unit revenue,
unit gross sales, unit turnover, full-time employee equivalent, square foot)
Absolute Normalised
Description Target measured in absolute energy use, based on historical Target measured in absolute energy use normalised by normalisation
data. metric
Advantages Easy to calculate and understand; reflect total consumption level Take into account production fluctuations on energy use; provide
of facility internal and/or external benchmarking on a fair basis; unaffected by
organic growth or decline of facility
Limitations Sensitive to external impacts on energy use(e.g. production Difficult to justify for base load energy consumption; finding the best
fluctuations, facility’s organic growth or decline); difficult for normalisation metric could be complex if energy use is subject to more
external benchmarking than one external impact factors
Applicable For a constant process (such as lighting that is on 24/7 for safety Where output and one or two other variables are the major sources of
reasons) or if required for regulatory purposes (as with the variation in performance, and a simple basis for comparison or
baseline year). identification of non-conformities is required.
Not Applicable Processes that are subject to variation, such as most systems at Where changes in other variables can make the past energy intensity a
generation sites. poor predictor of performance, or where the data is of insufficient
quality or frequency to develop a meaningful intensity baseline.
Example Total annual energy consumption (MJ) Total energy consumption (MJ) / production unit (kg of garment)
Source: Energy Savings Measurement Guide (ESMG), Australian Government

ENERGY REDUCTION ACTION PLAN

WHAT IS IT?
• Key elements of a good action plan
o Assigned responsibilities for implementation of opportunities
o Timetable for implementation
o Process for reviewing progress against targets
o Prioritized list of energy saving opportunities including management and technical
actions
ENERGY REDUCTION ACTION PLAN - EXAMPLE
Expected
Estimated annual Total energy cost Estimated Expected project Responsible
Category Measure Description of improvement measure project Progress status
savings savings (USD/y) investment completion date person & title
start date
Install individual
Individual lighting switch for each
switch for better Peter
Lighting cutting table has installed. Will switch 3400 kWh/y 500 Nil AUG 2013 AUG 2013 Complete
zoning control Facility Manager
off non-usable table during OT period
(cutting room)
Install individual switch for each team
Turn off lights
in sewing room - need to rearrange the Peter
Lighting during break time 14900 kWh/y 2300 8800 USD OCT 2013 NOV 2013 Complete
network to have 2 teams share one Facility Manager
(sewing room)
switch
Install high
efficiency chilled Susan
MVAC water pump (to Install new pump 31200 kWh/y 4900 9700 USD JUL 2013 Admin Manager Project on hold
reduce from 37kw
to 22kw)
Replace old chiller Susan In progress
MVAC with high efficiency Install 2 high efficiency chillers 129200 kWh/y 20600 76000 USD JUL 2015 Admin Manager following
chiller timeline
Maintenance
Peter
and Repair air leaks Check weekly 7100 kWh/y 1100 Nil JUN 2013 JUN 2013 Complete
Facility Manager
Housekeeping
GREENHOUSE GAS MANAGEMENT
What’s Why do we need How to manage

Greenhouse Gas? to manage it? it?
GREENHOUSE GAS?
• Greenhouse Gas is a gas in an atmosphere that absorbs and emits heat.
• Major types of greenhouse gases:
CO2 CH4 N2 O
Carbon Dioxide Methane Nitrous Oxide
• Other major greenhouse gases: HFC, PFC, SF6 (under Kyoto Protocol)
• Greenhouse effect:
WHY DO WE NEED TO MANAGE GREENHOUSE GAS?

• Corporate GHG management can serve several business goals
• 1. Communications
o Enhance environmental portfolio
o Provide quality carbon emission data to complete the
requirements of international environmental programmes, e.g.
Carbon Disclosure Project
• 2. Performance tracking
o Measure and report GHG performance overtime
Carbon Footprint
o To understand the environmental performance of the
organization
• 3. Impact reduction and cost savings
o Footprint accounting allows identifying emission “hotspots”
2012 2013 2014 2015
o Organization can identify energy and carbon reduction
opportunities from these “hotspots”
HOW TO MEASURE GHG EMISSIONS?

• Calculating Corporate Carbon Footprint
o Seven greenhouse gases are accounted in accordance to GHG Protocol Corporate
Standard: CO2, CH4, N2O, HFCs, PFCs, SF6, NF3
o The GHG emissions are calculated by multiplying “activity data” with documented
“emission factors” (EF).
o For emission factors that are not in units of CO2e, the factors are multiplied with their
corresponding Global Warming Potential (GWP).
o GHG emission are expressed in tonnes of carbon dioxide equivalent (tCO2e).
GHG (tonne CO2e) = Activity data x Emission factor x GWP

EXAMPLE OF GHG INVENTORY SUMMARY
HOW TO DEMONSTRATE GHG EMISSIONS
(NOT RELATED TO DIRECT ENERGY USE SAVINGS)
– FAC 2.3.2 asked if a factory has achieved GHG

reductions which are not related to direct energy
reductions
– Examples:
– Reductions due to fuel switch

Fuel switch:
– Use of renewable energy From
Coal/diesel
– Purchase carbon offsets
boiler to
biofuel boiler
– Factory needs to demonstrate calculated GHG
reductions related to these changes
 Use solar power in

replacement of purchased
electricity
COMMON CHALLENGES ON ENERGY & GHG
– Level 1:
– GHG inventory project is not common, only some factories appointed third party consultants
to conduct GHG audit. Some factories made used of GHG protocol’s calculation tools
– No steam usage/measurement
– Level 2:
– Unable to calculate GHG targets and GHG savings
– Energy audit report not up-to-date (latest 3 years)
– Level 3:
– Lack of evidence in demonstrating energy saved
– Unclear about terms/concepts: GHG reductions not related to direct energy reductions
SECTION 3 - WATER USE &
SECTION 4 – WASTEWATER / EFFLUENT
Water & Wastewater
MAJOR TEXTILE PRODUCING LOCATIONS
MEDIUM TO EXTREMELY HIGH WATER RISK IS EVIDENT IN MANY LOCATIONS
– Textile industries in China, India and Bangladesh are
concentrated in areas with medium to extremely
high water risk.
– Although the commercial implications of water

scarcity are poorly understood at the local level,
which makes detailed risk assessment difficult,
many companies are beginning to include water risk
when making strategic decisions about a company’s
Shandong Baseline Water
geographical
Location focus inOverall
Country the future.
Water Risk Stress
Jiangsu
Zhejiang China Medium to high risk Medium to high
Zhejiang Jiangsu China Medium to high risk Medium to high
Fujian Guangdong China Low to medium risk Low
Gujarat Shandong China Extremely high risk Extremely high
Dhaka Guangdong Fujian China Medium to high risk Low to medium
Maharashtra Tamil Nadu India High risk High
Gujarat India Extremely high risk Extremely high
Maharashtra India High risk High
Tamil Nadu
Dhaka Bangladesh Medium to high risk Low
Source: WRI Aqueduct Water Risk Atlas: http://aqueduct.wri.org/atlas

KEY CONCEPTS - SECTION 3 WATER USE
• Demonstrating water savings • 3.3.1

Level 3
Demonstrating
improvements
Level 2 • Water target setting • 3.2.1 • 3.2.1.1-3.2.1.5

• Water audit • 3.2.2
Target setting and
planning
• Measuring water use baseline • 3.1.0, 3.1.1, 3.1.2 • 3.0.0.1, 3.0.1.1,

Level 1
3.1.1.1, 3.1.2.7, 3.1.2.8
Measuring performance and
• Water metering • 3.1.2.1-3.1.2.6
KEY CONCEPTS - SECTION 4 WASTEWATER / EFFLUENT

Level 3
Demonstra • Demonstrating wastewater quality • 4.3.1
ting improvement
improveme
nts
Level 2
Target setting • Wastewater quality improvement target • 4.2.1
and planning
• Wastewater production and • 4.1.0, 4.1.1 • 4.1.1.1-4.1.1.3, 4.1.1.6,

treatment 4.1.1.7, 4.1.1.10-4.1.1.13
• Wastewater treatment plant • 4.1.1.4, 4.1.1.5
contingency plan
Level 1 • Wastewater compliance, wastewater • 4.1.1.8, 4.1.1.9, 4.1.1.14-
Measuring performance and testing and BSR wastewater standard 4.1.1.25, 4.1.1.28,
demonstrating compliance 4.1.1.29
• Water & wastewater technology • 4.1.1.26, 4.1.1.27
investment cost – water withdrawal,
pre-treatment, post-treatment and
ETP
Water & Wastewater Level 1
SUPPLY CHAIN WATER CYCLE

Recycling
Water supply Processing Wastewater discharge

(Resource management) (efficiency and (Quality and quantity
• Water intakes from optimization) control)
water body • Manufacturing • Different level of
• Common sources in processes that require pollution between
Asia include municipal water as the media, industrial and domestic
water supply, river, heat transfer and wastewater
underground water treatment • Treatment method
• Pre-treatment is • Dyeing, washing, would be determined
usually taken due to cooling, electroplating, by the characteristic of
manufacturing and cleaning, the wastewater (e.g.
process requirement • Some of the processes toxicity, acidity, organic
(e.g. water hardness require water as part content)
sensitive). of the material, e.g. • Physical, biological and
• Recycled water could food processing and chemical treatments
be applied subject to brewing • Cost is a concern
quality requirements
Water body
River, vapor, lake, ocean, rain, underground water, etc.
Water & Wastewater Level 1
WATER MANAGEMENT – BASELINE THE SYSTEM

– Water baseline nowadays is not just a number to tell how much was used in a year.
– The baseline should consist of qualitative and quantitative data and information about how water is
taken, used and discharge within the system boundary.
Water supply Processing Wastewater

discharge
- What is the water source? - Where and what are the
- How much purchased? water demands?
- What is the discharge
- What is the cost? - What are the process
requirements?
- Is there any requirements on water
- Legal or voluntary?
measurement? quality and quantity?
- Require a discharge
- By how? Any meter? - Is there any control of
license? How to maintain?
- What is frequency? water use in the
- Treatment is made on site
- Where are the records? processes?
or off site?
- Who is managing these
- What is the treatment?
records?
- It is effective?
- What is the quality
- Is there any control,
requirement if any?
monitoring and efficiency
tracking?
- How the wastewater
sludge is handled and
managed?
Water Level 1
WATER METERING
WHAT IS IT?
– Measure water consumption that tracks usage over time in aggregate or sub levels
– Measurement system capabilities vary from site to site—from almost none to complete sub-
metering with automated data management of individual items of equipment
– Metering coverage:
– Metering coverage is a description of the location and number of meters required. Coverage
is often described in terms of tiers or levels as follows:
- Level I representing main incoming supply and whole factory water consumption;
- Level II workshop water consumption; and;
- Level III water consumption at the major machinery (process) level.
– More sophisticated metering programmes will usually exhibit greater coverage as meters are
installed to monitor increasingly granular units of water consumption.
Water Level 2
WATER TARGET
– A formal target here refers to a quantified performance requirement of the site’s annual water
use of a particular water source (e.g., mains, surface water, groundwater, recycled water
etc.). A formal target must:
1) include a definite start date (i.e., "baseline") of target, the measurement unit, and the
baseline consumption (i.e. m3/year at 2010 baseline)
2) include an end date of the target, meaning the intended completion of the required
reductions; and
3) include an exact reduction quantity, expressed as a number (e.g. reduce by 1 million m3/
100K USD) or a percentage (e.g. reduce by 5%).
– 4) be relevant to reducing the site’s water use (e.g. focuses on the most significant water uses
at the site)
– Staff should be trained and made responsible for delivering the targets; and
– Typically, the targets are reviewed at least annually

Water Level 2
WATER AUDIT
WHAT IS IT?
– A water audit of a site is an assessment and analysis of the site’s overall water consumption,
with a view to identify opportunity to reduce water consumption and make water consumption
more efficient
– A water audit should identify for the site, savings (water and costs) and pay-back rates by
specific investment or action (e.g., investing $X in a water recycling project will save ___ L of
water annually, which equals $Z in savings and a payback of ___ months.)
Key processes in an water audit Example of water saving opportunity
Water Level 3
DEMONSTRATING WATER REDUCTIONS
– Factory needs to demonstrate normalized or absolute reduction of annual water use for at
least one primary water sources (e.g., mains, surface water, groundwater, recycled water etc.)
– Evidence shall be documented for reductions measures attributable to the water use
reductions
– Examples of reductions measures include:
– Rainwater harvesting
– Grey water reuse
– Repair water pipe leakage
– Cooling water/condensate reuse as feed water for boiler

Wastewater Level 1
WASTEWATER
– Wastewater may be generated from:
– process (or “trade”) effluents arising from various stages of an industrial, agricultural, or
commercial process;
– cooling wastewater or other non-contact wastewater (e.g., flushing chillies);
– blow-down (e.g., from compressors, boilers);
– stormwater run-off (sometimes referred to as surface water run-off) from roofs,

hardstanding areas, yards, car parks, vegetated areas, etc.);
– firewater;
– sanitary/ domestic wastewater (e.g., from toilets, sinks etc.)
– This would include all manufacturing and/or commercial activities within the facility site’s
footprint, such as industrial processing, lubrication, cooling, maintenance, cleaning, and
domestic use, as well as wastewater/effluent from dormitories (e.g., bathrooms, showers,
kitchens.)
Wastewater Level 1
WASTEWATER TREATMENT
WHAT IS IT?
– Wastewater from a facility can be treated on-site (at the facility) or off-site (at a centralized
wastewater treatment facility operated by local government or service provider). Common
methods of wastewater treatment include
Physical
Solid separation and
removal;
Flirtation
Biological
Organic content digestion
and removal
Chemical
Inorganic content removal,
neutralization,
detoxification, disinfection,
coagulation, oxidation
Ref: http://watertreatmentprocess.net
Wastewater Level 1
WASTEWATER TREATMENT PLANT CONTINGENCY PLAN

Wastewater Level 1
WASTEWATER MONITORING
WHAT IS IT?
– The quantity and quality of the water discharged by the reporting organization is directly
linked to ecological impact and operational costs. As such, wastewater measurement should
track a set of relevant standard parameters
– Wastewater quality may be measured using many factors, such as suspended solids, reduced
biological oxygen demand (BOD) or chemical oxygen demand (COD), metals content,
oil/grease content, temperature, pH, etc.
– Wastewater quality can be improved through reducing strength/concentration of

contamination at the source of generation and should be considered top priority, before
targeting to reduce wastewater volume.
– Wastewater treatment volume and quality are tightly linked. It is important to not focus solely
on one without understanding how it affects the others. For instance, if you decrease your
wastewater discharge volume, you may inadvertently create wastewater quality that is
untreatable (on-site or off-site) and have a net-negative impact. Wastewater generation should
be compared between fixed periods so that unusual patterns in generation can be identified.
Wastewater Level 1
BSR WASTEWATER STANDARD
• BSR’s Sustainable Water Group’s Water Quality Guidelines (WQGs) are an industry best
practice as a minimum expectation for effluent quality.
• Local regulations should be followed when they are more strict than the WQGs.
• 5 Core Parameters of the WQGs:

Parameter Limit Value
Sampling:
Temperature ≤37°C
pH, Standard Units 6.0-9.0
Traditional Parameters:
Total Suspended Solids (TSS) ≤ 30 ppm
Biological Oxygen Demand (BOD) ≤ 30 ppm
Chemical Oxygen Demand (COD) ≤ 200 ppm
Source: BSR Sustainable Water Group Water Quality Guidelines (WQGs)
Wastewater Level 1
WASTEWATER QUALITY TEST

– Wastewater quality test report (Indonesian)
Wastewater Level 1
WATER & WASTEWATER TECHNOLOGY INVESTMENT – WATER
WITHDRAWAL, PRE-TREATMENT, POST-TREATMENT AND ETP
– Example of estimated cost in various types of technology investment examples:
Category Technology Estimated capital cost (USD)
Pulse Mechanical water meter $90-200
Electro-Magnetic Flow meter $1,700 - $4,200
Water withdrawal
Ultrasonic Flow meter $420 - $2,000
Flow Calculator $350 - $500
Compressible Media Filtration $0.06 - $0.09 per gallon of design flow
Continuous Deflection Separator $5,000 - $50,000 (site specific)
Debris capture and removal system $40,000
Flushing gate system to remove debris and
Pre-treatment $91.44 per square yard of gate area
sediments in retention systems
Bleach bath recovery system $80,000 (for small plant)
Recovering heat from hot rinse water to
$48,000 - $95,000
reduce effluent temperature
Microfiltration $1,700 (at 250 GPD flow rate)
Post-treatment Ultrafiltration $1,800 (at 250 GPD flow rate)
Nano filtration $2,400 (at 250 GPD flow rate)
ETP Shaft for activated sludge $3 - $5 per gallon of design flow
Source: U.S. EPA, Emerging Technologies for Wastewater Treatment and In-Plant Wet Weather Management
Texas Tech University, Review of Potential Onsite Wastewater Disinfection Technologies
DOE, Energy Efficiency Improvement Opportunities for the Textile Industry
Wastewater Level 2
SETTING WASTEWATER QUALITY IMPROVEMENT TARGETS

–  Formal target, at least reviewed annually
(the following example is a absolute reduction target)
Reduce BOD level of wastewater discharge by 25% per garment by 2017 compared to a 2013
baseline
Wastewater quality indicator Quantifiable Unit Target year Baseline year

target
Target should be reviewed annually

Meeting legal standards
and accompanied by an action plan. are not a wastewater
quality improvement
target under Higg.
Action plan setting “Beyond compliance” is
expected!
Wastewater Level 3
DEMONSTRATING WASTEWATER QUALITY IMPROVEMENT
– Factory needs to document improvement in discharge water quality over time
– Wastewater lab test and quality monitoring records
– Evidence of reducing wastewater volume alone is insufficient. For instance, if you decrease
your wastewater discharge volume, you may inadvertently create wastewater quality that is
untreatable (on-site or off-site) and have a net-negative impact
COMMON CHALLENGES ON WATER & WASTEWATER
– Level 1:
– No wastewater production metering tracking
– Level 2:
– No water audit conducted by external professionals in order to identify savings

opportunities
– Not able to set water and wastewater improvement plan and targets
– Level 3:
– Lack of evidence in demonstrating water saved and wastewater quality improvement

SECTION 5 - EMISSION TO AIR
Air
EMISSION TO AIR
WHAT IS IT?
– Release of pollutants into the air; major sources in a factory setting:
Point source Fugitive sources
• From factory’s main activities and • Emissions arising from open tanks and some
discharged into air from a single point solvent applications
(e.g. chimney) • Commonly found on-site: refrigerant with ozone-
• Commonly found on-site: generators, depleting potential (ODS); solvent application
boilers, incinerators process (e.g. adhesive shoe production –volatile
organic solvent)
Air
KEY CONCEPTS - SECTION 5 EMISSION TO AIR

Key concepts Higg question
Level 3
Demonstrating • Emission reduction • 5.3.1
improvements
Level 2
Target setting and • Air emission target • 5.2.1
planning
Level 1 • Typical air pollutant and their • 5.1.1, 5.1.2

Measuring performance and sources
demonstrating compliance • Air emission inventory • 5.1.1
Air Level 1
TYPICAL AIR POLLUTANT

WHAT IS IT?
Important Note #1
• Greenhouse gas emissions (emission of CO2, CH4, N2O and other relevant GHGs*)are not
covered in this Section, but covered in Section 2 – Energy Use and GHG Emissions. Since
information on its performance, environmental objectives and goals are already covered in
Section 2, GHGs shall not be considered an air pollutant in Section 5.
Important Note #2
• Ozone depleting substance (ODS) are substances that damage and reduce the ozone layer in
the Earth’s upper atmosphere. ODS are commonly used as: refrigerants and refrigerant blends
(R-22 / HCFC-22), fire extinguishing agents (e.g. halons), certain types of chlorinated solvents
etc. A useful general source of information relating to ODS is the Ozone Secretariat of the
United Nations Environment Programme (http://ozone.unep.org/).
*United Nations reporting guidelines: CO2, CH4, N2O, HFCs, PFCs and SF6
Air Level 1
TYPICAL AIR POLLUTANT

–  Check whether there are

emission sources on-site (e.g.
boiler, generator, etc.)
–  Record of all the major
environmental pollutants and
their sources
Check whether
• e.g. EIA/air quality test report the test result is
from all emission sources in in compliance
with the legal
the factory or air emission requirement
inventory
• See example of air quality test
report:
Source of
emission
Air pollutants
from boiler
Air Level 1
AIR EMISSION INVENTORY

WHAT IS IT?
– Detailed list of the emissions and their sources, including
the following information for each emission source:(refer Scrubber
to EIA)
• the pollutants known or likely to be present;
• the quantity emitted (if known or estimated);
• Common unit of measurement: mg/m3
• the location of the stack, vent etc.;
• any control devices (e.g. abatement equipment)
installed;
• Scrubber, electrostatic precipitator, etc.
• frequency of monitoring; and
• Monthly, quarterly, bi-annually, annually,
• whether the particular emission is legally regulated.
• Any legal requirements or valid emission permit Boiler permit
(refer to FAC 1.1)
Air Level 1
AIR EMISSION INVENTORY

–  Example of air emission inventory
• Check whether these emission points exist and Check

located in the said location Check whether this is the whether
• Check whether there are extra emission points the
legally binding limit permit is
other than the ones listed in the emission inventory valid
Air Level 2
AIR EMISSION TARGET

–  Formal target, at least reviewed annually
(the following example is a absolute reduction target)
SO2 emissions from boiler reduced by 20% (in µg/m3) by 2017 compared to a 2013 baseline
Air Emission Quantifiable Unit Target year Baseline year

Pollutant source target
Target should be reviewed annually

and accompanied by an action plan.
Action plan - typical measures to reduce air emission

Installation of scrubber, fuel switch (coal to compressed biomass)
Air Level 3
AIR EMISSION - REDUCTION

WHAT IS IT?
– Reduction in the emission pollutants through application of emission control measures.

The reduction in input causing the emissions (e.g. reduced production and hence
reduced input of coal to boiler) SHOULD NOT be considered as reduction in air
emission .
–  Latest and previous test reports showing a reduction (normalised or absolute) in
emissions for a particular emission source.
–  Proof of installation of emission control measure.
Installation of scrubber Fuel switch

SECTION 6 - WASTE MANAGEMENT
Waste
WASTE MANAGEMENT
WHAT IS IT?
– The management of substances that is

discarded, which can include materials
generated form manufacturing process.
• Waste hierarchy – on the priority of
management activity:
1. Avoid and minimise the generation
of waste
2. Reuse and recycle materials
3. Disposal and reduce the volume of
waste
Waste hierarchy
(Source: Environmental Protection Department,
Hong Kong)
Waste
KEY CONCEPTS - SECTION 6 WASTE MANAGEMENT
Level 3
Demonstrating • Waste reduction • 6.3.1
improvements
Level 2
Target setting and • Waste reduction target • 6.2.1 • 6.1.4.2
planning
Level 1
• Waste inventory • 6.1.1, 6.1.2, 6.1.4 • 6.1.3.1, 6.1.3.2
Measuring performance and
demonstrating compliance • Hazardous waste • 6.1.3, 6.1.5, 6.1.6
Waste Level 1
WASTE INVENTORY
WHAT IS IT?
– Detailed list of the all waste stream, including the following information for each:
– a description of the waste and its source
– the type of waste (hazardous/non‐hazardous);
– the quantity of waste disposed of/treated;
– the disposal/treatment method;

Waste Source of Annual Waste On‐site Department Approved Waste Disposal
Stream Waste Quantity Classification Treatment responsible Waste Route
(tonnes) (‘Inert’, ‘Non‐ (Biological, Contractor (Recycled,
Hazardous’, Chemical, Landfill,
‘Hazardous’) Physical) Incineration)
General Canteen, 300 Non‐ No Operations Company X Landfill
waste offices Hazardous
Wood Pallets and 1.2 Non‐ No Packaging Company Y Landfill
other Hazardous
packaging
materials
Glass Canteen, 0.8 Non‐ No Operations Company X Recycled
offices Hazardous
Waste Level 1
HAZARDOUS WASTE STREAMS DISPOSAL PROCESS

•  Proper management and disposal procedures for hazardous waste (with legal relevant legal
requirements as the benchmark)
1) On-site management
• Proper storage – closed, labelled drum stored inside with secondary containment
• Perform annual review on hazardous waste streams and keep record of all test reports
• Inspect all storage on a regular basis (e.g. leak, spill, damaged containers, etc.)
• Decontaminate and test for hazardous residuals before discarding containers
• Develop emergency plan for the case of leaks, spill, fire, or other situations
• Provide training for all staff involved in waste management
2) Disposal
• Schedule waste disposal ahead of time to prevent overloading storage capacity

• Ensure waste is disposed at a permitted treatment or disposal facility and in the method in compliance
with legal requirement
Source: Connecticut Department of Environmental Protection, Garment Care Fact Sheet - Hazardous Waste Management in Connecticut
Waste Level 1
HAZARDOUS WASTE STREAMS DISPOSAL PROCESS

•  Proof of segregation of hazardous and non-hazardous waste on-site
• Visit the disposal area of waste and recycable
Hazardous waste (light tubes, chemical containers) and non-hazardous

(off-cuts) waste are stored separately
•  Training of staff members responsible for handling hazardous waste

– Training materials (covering the key topics)
– Attendance record
Waste Level 3
WASTE REDUCTION TARGET

•  Formal target, at least reviewed annually:
Disposal of general waste reduced by 20% (in tonnes) by 2017 compared to a 2013 baseline
Type of waste Quantifiable Unit Target year Baseline year

source target
•  Evidence of waste reduction initiatives in place
Segregation of Waste separation Poster - increase
hazardous and non- and recycling environmental
hazardous waste awareness of staff
SECTION 7 - CHEMICALS MANAGEMENT
Chemicals
KEY CONCEPTS - SECTION 7 CHEMICALS MANAGEMENT
Level 3
Demonstrating • Alternative assessment • 7.3.2
improvements
Level 2
Target setting and • Target and action plan • 7.2.1, 7.3.1 • 7.3.1.1
planning
• Chemicals Management Module • 7.1.1

Level 1
• Restricted Substance Lists (RSL) • 7.1.3 • 7.1.3.1-8
Measuring performance and • Chemical labelling • 7.1.4 • 7.1.4.2, 7.1.4.3, 7.1.4.4
• Chemical inventory • 7.1.2, 7.1.4 • 7.1.4.1, 7.1.2.1
Chemicals Level 1
RESTRICTED SUBSTANCE LIST (RSL)

WHAT IS IT?
– A list of chemical substances subject to a usage ban in the production process. Chemicals on an RSL
could include ingredients potentially used in cleaners, solvents, adhesives, stabilizers, paints, inks,
detergents, dyes, pigments, auxiliaries, coatings and finishing agents used for wet-processing,
maintenance, waste water treatment, sanitation and pest control. Different types of RSL:
Sector - American
Brand - H&M Chemical Apparel and Footwear International – ZDHC
Restrictions Association (AAFA) RSL MRSL
Chemicals Level 1
RESTRICTED SUBSTANCE LIST (RSL)

–  Process flow / standard operating procedure to identify hazardous substances on the RSL
–  corrective action plans is restricted substances are identified
–  Evidence of manufacturers may identifying and restricting substances of concern that are not
beyond any applicable RSLs
Chemicals Level 1
CHEMICAL LABELLING
WHAT IS IT?
– Regulatory requirements to label chemicals based on their chemical properties. Key elements of
chemical labelling based on:
• Materials Safety data sheet (SDS)
• Process chemical information (chemical name, trade name, and CAS number of chemicals used to
make a product);
• Chemical hazard data, human health and eco-toxicological characteristics of chemical ingredients
and chemicals used in making that ingredient, as well as their physical safety properties such as
flammability;
Chemicals Level 1
CHEMICAL LABELLING
Company information Chemical properties, toxicology information
–  Materials Safety data sheet (MSDS)
of chemical supplier
• Should be displayed in the chemical
storage whether the said chemical is
stored
• Information should be available in a
language that the staff member
responsible for handling chemical
understands
MSDS displayed in a
chemical storage Information of handling (e.g. personal
CAS number
protective equipment, spillage response)
CHEMICAL INVENTORY
Chemicals Level 3
TARGET AND ACTION PLAN TO IMPROVE CHEMICALS MANAGEMENT

WHAT IS IT?
 An action plan to improve chemicals management at a facility should have specific

guidelines to reduce the use of hazardous chemicals and improve scores on indicators in the
CMM. It could include information on:
• Results of the root-cause analysis;
• Measureable targets in improving chemicals management and reducing use of hazardous

chemicals, with performance indicator (e.g. CMM “suppliers” indicators);
• Actions to be taken and the resources needed;
• Timeline (start date and end date);
• Test reports or records showing the progress of targets (e.g. chemical substitution
reports).
HIGG - SOCIAL LABOUR FACILITY MODULE
HIGG INDEX SOCIAL MODULE STRUCTURE
Section 1: Facility’s Labor and Workplace Performance Management

Level 3:
Facility SL.F-1.1 Recruitment and Hiring Delivering
SL-F-1.2 Compensation improvements
Module SL-F-1.3 Hours of Work
SL-F-1.4 Worker Involvement and Communication
SL-F-1.5 Worker Treatment and Development
SL-F-1.6 Health and Safety Level 2: Setting
Brand SL-F-1.7 Termination and Retrenchment goals
Module Section 2: Facility's Labor and Workplace Performance Management for the
Value Chain
Section 3: External Engagement, Community Impact, Transparency and Public

Disclosure Level 1: Measuring
SL-F-3.1 External Engagement and Collaboration performance and
Product SL-F-3.2
Communi
ty Impact
Module SL-F-3.3 Transparency and Public Disclosure

SOCIAL MODULE SCORING
Scores Updated Automatically as Questions Answered
Assigned
To: Scoring Summary Actual Possible Weight Points
Section 1: Facility’s Labor and Workplace Performance Management 0 / 403 66.5% 0.0
SL.F.1.1 Recruitment and Hiring 0 / 70
SL-F-1.2 Compensation 0 / 43
SL-F-1.3 Hours of Work 0 / 54
SL-F-1.4 Worker Involvement and Communication 0 / 53
SL-F-1.5 Worker Treatment and Development 0 / 101
SL-F-1.6 Health and Safety 0 / 76
SL-F-1.7 Termination and Retrenchment 0 / 6
Section 2: Facility's Labor and Workplace Performance Management for the
0 / 125 20.6% 0.0
Value Chain
Section 3: External Engagement, Community Impact, Transparency and

0 / 78 12.9% 0.0
Public Disclosure
SL-F-3.1 External Engagement and Collaboration 0 / 13
SL-F- Community
0 / 27
3.2 Impact
SL-F-
Transparency and Public Disclosure 0 / 38
3.3
Total 0 / 606 0
GUIDE SUPPLIER FOR TIME EFFICIENT AND HIGH QUALITY HIGG SELF ASSESSMENT
– Guide suppliers on the right approach to Higg self-assessment

– Appoint Higg Index lead
– Engage the right staff  subject matter experts
– Follow guidelines – How to Higg, H&M Manual
– Understand data requirement
– Guiding on document preparation
– Be conservative, transparent, and right first time
– Answers should be detailed and justifiable
– When you’re conducting verification…
– Adjust score with justifications
– Provide feedback to suppliers
– If the factory has already got their score verified through different channel (e.g. 3rd party,
brand), check their verification information
HIGG
SECTION-BY-SECTION
SECTION 1: FACILITY’S LABOUR AND WORKPLACE PERFORMANCE MANAGEMENT
1.1 - Recruitment and Hiring
1.2 – Compensation
1.3 - Hours of Work
1.4 - Workers Involvement & Communication
1.5 - Worker Treatment and Development
1.6 – Health and Safety
1.7 - Retrenchment & termination

COMMON CHALLENGES ON SECTION 1
– Many of the answer options fits the facility but not many of the examples can be demonstrated
( may be because of lack of documents, lack of awareness within the different levels in the
facility)
– Fear of loosing score ( It is not about score, but rather about understanding where do you
stand today and BE HONEST TO YOURSELF)
– It is a tendency to fill in all answer options, REMEMEBR- All answer options will not fit all
facilities. Choose the one that you practice
– The objective of Higg is to understand the intent and vision of a company without only
referring to compliance, so it might be that in the beginning a low score that should reflect the
company policies and procedures. Every company will be different and will have different
routines.
HIGG.ORG – SOCIAL MODULE
– Refer to the documents that should be there in the facility or documents that demonstrate
functional systems/ practices in the facility
– We have created an extensive Guide that will help you understand the question and
expectation for an “Answer” and “collection support”
– In addition to this document list is also added that will help to keep & maintain the records
SECTION 2: FACILITY’S LABOUR AND WORKPLACE PERFORMANCE MANAGEMENT
FOR THE VALUE CHAIN
– How do you work with your sub suppliers and sub-sub suppliers?
– Do you know you work with sub – suppliers?
– If yes which ones?
– Do you have a full list of your sub suppliers?
– Do your sub suppliers understand what is Sustainability?
– Do they know about your Code of Conduct or business Principles?
– Do you know/ ensure that they do not use Child labour?
– Do they pay Minimum Wages to all their workers?

SECTION 3: EXTERNAL ENGAGEMENT, COMMUNITY IMPACT, TRANSPARENCY &
PUBLIC DISCLOSURE
– What is the level of Sharing and Partnerships that you engage with external organizations?
– What is the level of involvement for you in your community where you operate? Example-
participate in charitable programs, run camps in the community, fresh water etc, awareness on
HIV etc.
– Sharing of your facility Social Performance data ? Example – transparent in your annual
reports, sustainability annual reporting, in case of public listed declare results for your share
holders and stake holders.
COMMON CHALLENGES ON SECTION 2& 3
– Lack of understanding on Section 2 &3
– These are going beyond your own factory, this should be answered by the Senior management
– It is ok to say “NO” in the beginning and then rather work on setting realistic goals for yourself
REFERENCES
– How to Higg Social Guidebook that

supports you to find better
understanding to the questions.
KNOW THE LOGIC/STRUCTURE OF THE GUIDEBOOK
Key Definition Chapter Name

Question
examples that lead

to correct answer
Facility Module
2015 2016
H&M PERFORMANCE DATA
SOCIAL & ENVIRONMENTAL PERFORMANCE DATA
– The objective of gathering this data:
- To evaluate the functionality of the system
- Measure Progress over a period of time
- Bring more visibility to Facility Performance
- Help factories to get reports for better analysis
- We launch this in 2016
- Training and related material will come in October 2016

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SIPP: WHAT

Valid for all brands in H&M group

Sustainability Version 1.0

SUSTAINABLE IMPACT PARTNERSHIP PROGRAM – 3 STEP APPROACH

– Failing to meet the minimum requirements will generate a letter of concern.

– Repeated violations will lead to stop of production

– Stop production means no more production for 5 years.

– Violation on Business Practice leads to 2 Points

– Violation on Social & Environment Minimum requirement leads to 1 Point

– Repeated violation (of same type) leads to 3 points ( 3 times)

Supplier Letter of Concern Scoring

Case 1 BP 1 Child labor 2

Case 2 BP 2 Fake documents 2

Case 1 BP 1 Child labor 2

Consequence LC & Remediation 2

Case 1 BP 1 Child labor 2

Consequence LC & Remediation 4

Supplier Letter of Concern Scoring

Supplier Letter of Concern Scoring

SUSTAINABLE IMPACT PARTNERSHIP PROGRAM – 3 STEP APPROACH

Facility Environmental Facilities

Lacking Awareness and Measuring Performance and

Compliance Cost Reduction

Reduce environmental impacts

Measuring Performance and Setting Goals

Compliance Cost Reduction Continuous Cost reduction

Setting Goals Delivering Improvements

How to clearly understand Higg requirement?

Factory level staff/subject matter experts are not engaged

Over-estimate Higg performance

Understanding Higg verification process

– Phased process in improving Higg quality

For languages contact H&M

Step by step guidance with further

ENVIRONMENTAL MANAGEMENT SYSTEM (EMS)

– There are a number of international

– EMAS (Eco-Management and

KEY CONCEPTS - SECTION 1 ENVIRONMENTAL MANAGEMENT SYSTEMS OR PROGRAMME

Key concepts Higg question

• EMS audit (by 3rd party/ Internal auditor) • FAC-1.3.2

Level 2 • Environmental Management System (EMS) • FAC-1.2.1

Establishing an • Plan-do-check-act cycle (PDCA cycle) • FAC-1.2.1

• Environmental aspects and impact • FAC-1.1.1

ENVIRONMENTAL ASPECTS AND IMPACTS

• Use of freshwater • Drying of

SIGNIFICANT ENVIRONMENTAL IMPACT

 WHAT ARE WE LOOKING FOR?

– Significant environmental impact assessment – an internal evaluation of all environmental

SIGNIFICANT ENVIRONMENTAL IMPACT

Textile and Garment Industry DB44/26-2001 Grade 1 GB 4287-2012

BOD ≤20 ≤25

COD ≤100 ≤100

Colour ≤50 ≤70

TSS ≤70 ≤60

•  Environmental inspection report by the government departments

•  Test reports of emissions sources (e.g. boiler, wastewater treatment plant)

•  Social compliance audit report

COMPLIANCE – WATER EXTRACTION PERMIT

– Observe any use of groundwater &

– Obtain water extraction permit: Factory

1. Permit valid period (i.e. date of issue

2. Number of extraction points