Climate action in production
In the global textile and apparel industry, CO2 emissions mainly occur in the cultivation and production of textile fibers and during energy-intensive processing stages, such as dyeing, washing, or bleaching. HUGO BOSS is conscious of its shared responsibility to protect the environment and the climate. The implementation and development of environmentally and climate-friendly processes at our suppliers is as important to us as the implementation of corresponding measures at our own production sites.
Internal guidelines and standards on climate action issues in the supply chain are defined by the central Group Strategy and Corporate Development division and implemented in close cooperation with the Sustainable Supply Chain Management department. In addition, the central Environmental Management team coordinates appropriate measures at the Company’s own production sites in close alignment with the local management teams. The CFO/COO is regularly informed about the progress made toward achieving the Group’s climate protection targets, particularly within the Sustainability Committee. In addition, the Group Strategy and Corporate Development division reports directly to the CEO.
As a signatory to the Fashion Industry Charter for Climate Action under the auspices of the United Nations Framework Convention on Climate Change (UNFCCC), HUGO BOSS, together with other companies in the fashion industry, is striving for net zero climate-damaging emissions by 2050. In fiscal year 2022, HUGO BOSS revised its climate targets, adapting them to the increased requirements of the UNFCCC. From now on, we will pursue the goal of effectively reducing our own CO2 emissions (scope 1 and scope 2) by at least 50% by 2030 (base year: 2019), and thus without additional offsetting. In addition, by 2050 we aim at achieving net zero along the entire value chain. The previous climate neutrality targets of HUGO BOSS by 2030 and 2045 have thus been replaced.
We are committed to global climate protection with numerous measures and initiatives at our own sites and in the supply chain. In order to define suitable measures, as part of the Fashion Industry Charter for Climate Action, among others, we are involved in task forces dealing with issues such as “raw materials” and “energy efficiency and renewable energies in the manufacturing process.”
In line with the UNFCCC, we work together with our suppliers to sustainably reduce environmental impact along the supply chain. In this context, compliance with legal environmental requirements is an integral part of all supplier contracts. In addition, our Environmental Policy published on the HUGO BOSS corporate website describes a variety of environmental protection principles, both for our own production sites and those of our suppliers. It reflects our activities and objectives pursued within the framework of the Fashion Industry Charter for Climate Action. Our Supplier Code of Conduct also contains comprehensive guidelines for compliance with environmental protection requirements. In addition, HUGO BOSS sets binding sustainability criteria for its suppliers with regard to the use and processing of textile fibers and materials in the form of its publicly available RESPONSIBLE Product Policy.
As part of regular environmental audits conducted by external auditors, we record, among other things, our suppliers’ energy management measures and their CO2 emissions. In the event that violations of environmental requirements are identified, we work together with the respective supplier to develop action plans, the implementation of which is reviewed in follow-up audits. In order to increase the transparency and measurability of the environmental impacts of our partners, in 2021 we teamed up with other companies to develop a Resource Efficiency Module (REM) aimed at enabling suppliers to record their consumption data and to support the reduction of harmful emissions. In fiscal year 2022, more than 50 suppliers were already connected to the REM. This number is to be steadily increased in the coming years.
We also carry out relevant training sessions to inform our suppliers regularly about environmental and climate protection measures and to work towards the establishment of standardized energy and environmental management systems. The publicly accessible web-based “Climate Action Training” developed by HUGO BOSS in collaboration with the UNFCCC and other organizations and companies was translated into additional languages in 2022. This means that it is now available in a total of five languages.
As a member of the Better Cotton Initiative (BCI), we work together with other companies to reduce the environmental impacts associated with the cultivation and processing of cotton. Cotton is by far the most used material by HUGO BOSS. The BCI takes a holistic approach to environmentally and climate-friendly cotton production that takes into account ecological, social, and economic aspects. In addition, in 2022 we entered into a strategic partnership with the Indian farming initiative Raddis, which contributes to climate protection and biodiversity by cultivating regenerative cotton.
The impact of our own production activities on the climate is relatively low compared with that of external suppliers, as in particular the upstream stages of the value chain involve CO2-intensive processes. Nevertheless, the reduction of energy consumption and CO2 emissions at our own production sites plays an important role. We continue to develop our Environmental Management in line with the international standards ISO 14001 (environmental management) and ISO 50001 (energy management). Our own production site in Izmir (Turkey) – by far the largest of our own production sites globally – has already been certified in accordance with both standards since 2014.
To further reduce CO2 emissions at our own production sites, we are investing primarily in energy-efficient technologies, the modernization and renewal of technical equipment, and increasing the share of renewable energies. For example, HUGO BOSS has been obtaining its energy from renewable sources at all its own facilities since 2020. In this context, in 2022, we commissioned a photovoltaic system at our production site in Izmir (Turkey). The knowledge gained as part of our own environmental management will help us make further progress in reducing the environmental and climate impact in the supply chain together with our suppliers in the coming years.
In fiscal year 2022, HUGO BOSS’ scope 1 and market-based scope 2 emissions calculated according to the Greenhouse Gas Protocol decreased by 7% to a level of 29,735t compared to the base year 2019 (scope 1 and location-based scope 2 emissions: 52,549t). This development primarily reflects a reduction in Group-wide energy consumption and an increase in the share of green electricity compared to the base year. Further information on the climate strategy and climate targets as well as the Company’s Scope 3 emissions can be found in the Sustainability Report 2022.
In light of the comprehensive environmental impact of the global textile and apparel industry, HUGO BOSS considers itself responsible for making a positive contribution to protecting ecosystems and preservation of valuable resources. We have therefore firmly anchored the topic of circularity in our sustainability strategy. In this context, the design of our BOSS and HUGO products, which is fundamentally geared towards durability, becomes even more important.
Due to its strategic importance to HUGO BOSS, the topic of circularity is managed by the central Group Strategy and Corporate Development division, which, among other things, defines and coordinates the future direction and objectives. Operational responsibility lies primarily with the design, product, and sales managers, who define and implement corresponding product-related measures. In addition, topic-specific task forces systematically drive the exchange of experience in the area of circularity. Within the framework of the Sustainability Committee, the CFO/COO is regularly informed on the progress in achieving the Company’s circularity targets. There is also a direct reporting line from Group Strategy and Corporate Development to the CEO.
HUGO BOSS is increasingly working on establishing a consistent circular business model. We have set ourselves the target of enabling 80% of our products to become circular by 2030.
Already in the phase of design and production, we set ourselves the goal of further extending the lifetime of our products, increasingly closing material loops, and promoting the use of high-quality, recyclable materials. The use of renewable and recycled raw materials is key in this regard. For example, we are targeting a steady increase in the proportion of recycled fibers in our products. Beyond this, the durability of our products is to be further improved not only by means of a timeless design, but also via the use of particularly resistant materials and corresponding processing steps. In addition, HUGO BOSS entered into a partnership with Swiss innovator HeiQ AeoniQ in early 2022. Together, we are working on the development and production of a cellulosic filament yarn, which is intended to be recyclable and thus a sustainable substitute for synthetic fibers. In this context, we launched a polo shirt developed on the basis of this technology for the first time in January 2023.
The know-how of our employees, especially in the areas of design, product development, and sourcing, is of particular importance in the development and production of circular products. For this reason, trainings represent an important measure to continuously expand knowledge about circular materials and designs and to ensure the application of circular design principles in main work steps. The current range of online presence trainings on circularity is to be replaced by virtual training courses starting in 2023 and, at the same time, expanded in terms of content. As a relevant guideline, HUGO BOSS also developed an internal Circular Product Policy at the beginning of 2022, the key components of which are also published on our corporate website. The guideline was developed on the basis of existing and expanded industry standards and includes important criteria to ensure circularity at the stage of design and development. As part of our Spring/Summer 2023 collections, we have developed and manufactured a range of products that fully meet the defined circular design criteria for the first time and labelled them accordingly for our customers.
In addition to developing and manufacturing circular products, HUGO BOSS is also putting a strong focus on establishing circular business models. In this context, already today we offer a Repair & Rewear service in selected own stores in order to extend the lifetime of products that have already been sold. In addition, we launched the online resale platform “Pre-Loved” in France in 2022, where customers are able to return and purchase used BOSS and HUGO products. In the coming years, we plan to roll out this platform also to other markets.
While parts of our BOSS and HUGO collections were developed and manufactured directly on the basis of the Circular Product Policy for the first time in 2022, we are currently working on reviewing the entire product range for compliance with the criteria set out in the policy. In doing so, this should enable us to report on the current status and progress made in increasing the proportion of circular products in the future.