Under “Respect for Human Rights,” HUGO BOSS addresses two key issues relating to the social impact in the supply chain (including its own production): human rights and labor standards along with occupational safety. In the following, the topics are covered together, as they are both part of our social compliance program and are therefore closely interconnected.
Respect for human rights and compliance with applicable labor standards in the global supply chain are integral components of our corporate culture. A significant portion of our sourcing volume is made up by finished goods produced by independent suppliers in economically less developed regions. HUGO BOSS is aware of its shared responsibility for the workers along its supply chain. A commitment by the Managing Board to safeguard and respect human rights can be accessed on our corporate website. group.hugoboss.com
Respect for human rights is the joint responsibility of the departments Compliance & Human Rights, Sustainable Supply Chain Management, and the central Human Resources division, and is managed in close exchange with the operational sourcing units. The results of the work are regularly reported to the Managing Board. In addition, the topic of human rights is integrated into our Company’s risk management with clearly defined processes and responsibilities. Responsibility for occupational safety in our own production is organized on a decentralized basis. The responsible employees at the respective sites report regularly and on an ad hoc basis to the management of the respective Group companies, which maintains a close dialog with the Managing Board.
In the event of indications of violations of human rights or labor standards, our own employees as well as employees on the supplier side have recourse to a defined complaints mechanism through which they can reach out directly to the responsible contact person at HUGO BOSS, or an independent external ombudsman. In addition, the HUGO BOSS whistleblowing portal offers both our own employees and supplier’s workers the opportunity to report misconduct and criminal offenses in the Company confidentially and anonymously. In the event of violations, the central Compliance Department is responsible for clarifying, imposing sanctions, and taking action. As part of the compliance reporting process, it reports regularly to the Managing Board and the Audit Committee of the Supervisory Board.
HUGO BOSS aims to comply with statutory and internal company requirements on both human rights and labor standards, both in its own production and that of its suppliers, while at the same time guarantee occupational safety for all employees at all times.
We attach great importance to the careful selection of our partners, cooperation based on a spirit of mutual trust, as well as to the establishment and maintenance of long-term strategic relationships. In this context, the creation of a common understanding and helping to develop competencies to manage social issues in the supply chain play an important role. We require our suppliers to adhere to our Supplier Code of Conduct, which is the framework for compliance and improvement of human rights and social standards in the supply chain and forms an integral part of contractual agreements. As part of the Code of Conduct, HUGO BOSS also demands compliance with human rights along the entire supply chain. Consequently, our suppliers are obliged to pass on the corresponding requirements to their upstream suppliers and partners and to monitor compliance in an appropriate manner. The Code is based on internationally acknowledged standards such as the Core Conventions of the International Labor Organization (ILO) and includes, among other things, rules on compliance with national laws, working time restrictions, humane and safe working conditions, the prohibition of child labor, forced labor, and discrimination, and the payment of appropriate wages. The Code was updated and supplemented in fiscal year 2022. In countries where the national statutory requirements fall short, the Code sets a minimum standard. It is available in 30 languages on our corporate website. The HUGO BOSS Code of Conduct applies accordingly to our own employees. In addition, the publicly accessible HUGO BOSS Human Rights Policy is mandatory for all our own employees as well as our partners. In fiscal year 2022, we also published a voluntary Anti-Discrimination and Anti-Harassment Commitment and an Anti-discrimination and Harassment Policy.
To ensure monitoring and compliance with human rights and environmental due diligence obligations in the supply chain and further compliance with the German ‘Act on Corporate Due Diligence Obligations for the Prevention of Human Rights Violations in Supply Chains’ (LkSG) HUGO BOSS initiated important measures in fiscal year 2022. For example, an in-depth human rights risk analysis was initiated, as part of which both our own divisions and all direct suppliers were assessed accordingly. For this purpose, the existing self-assessment questionnaire (SAQ) for checking the social standards specified by HUGO BOSS for suppliers was updated during the year and supplemented with content relating to the LkSG. The SAQ is used to identify and prioritize potential risks in the respective corporate divisions and on the supplier side. Based on this risk analysis, HUGO BOSS will derive preventive and remedial measures and implement them accordingly.
To further develop industry standards, we closely cooperate with other companies and organizations. For example, we are involved in the “Living Wages” initiative by the Partnership for Sustainable Textiles. For HUGO BOSS, the underlying principles of fair compensation include the regulated payment of wages, performance-based compensation of hours actually worked, the right to collective bargaining and the prevention of unequal payment. In addition, HUGO BOSS has been a member of the “International Accord for Health and Safety in the Textile and Garment Industry” since 2021, the successor organization of the Bangladesh Accord, of which our Company had already been a member since 2016. The International Accord is an independent, legally binding agreement between companies and trade unions working together to promote higher health and safety standards, support employee rights, and increase transparency in the global apparel industry.
As a responsible employer, we also attach great importance to the occupational safety of our employees. This is especially reflected in the high standards of occupational safety at our own production sites. As part of health and safety inspections and risk assessments, potential risks are identified and assessed at an early stage so that solutions can be developed. In addition, face-to-face training courses and workplace trainings form an integral part of the onboarding process of industrial staff at our own production sites. The Health & Safety Commitment, published on our corporate website and updated in the reporting year, emphasizes the importance of this topic for our Company. group.hugoboss.com
In the context of audits, HUGO BOSS regularly reviews compliance with the social standards set out in the Supplier Code of Conduct and the regulations on occupational safety. For this purpose, the Company also uses external auditors. If infringements of the social standards are identified, HUGO BOSS works jointly with the respective supplier to develop action plans, the implementation of which is reviewed in follow-up audits. If no sufficient improvement can be shown during the implementation of these corrective measures, as a last resort, and following repeated reviews, HUGO BOSS will ultimately terminate the supplier relationship. In order to prevent violations of social standards, we attach great importance to the further development of our suppliers’ social compliance management systems. For example, we regularly conduct social compliance trainings at our finished goods suppliers and support them in implementing the social standards. Our own employees are also to be further sensitized of social compliance matters through regular training sessions. Both training measures are conducted predominantly online, while on-site training sessions are usually only held on an ad hoc basis.
In 2022, own production was carried out at five production sites in five European countries. In addition, HUGO BOSS had an active business relationship with 233 external finished goods production facilities in 29 countries (2021: 169 production facilities in 26 countries). The increase compared to the previous year primarily reflects the overall pick-up in sourcing volume driven by the strong business development of HUGO BOSS in 2022. During the reporting period, 97 audits were conducted in 87 existing finished goods production facilities, including the Company’s own production facilities (2021: 68 audits at 55 production facilities). Non-compliances identified in 2022 mainly related to the area of working hours. Sourcing and Production
By 2025, HUGO BOSS has set itself the goal of sourcing all of its goods – measured by sourcing volume – from finished goods suppliers (including its own production sites) with one of the top two performance levels (“good” or “satisfying”) in the most recent audit. In 2022, the corresponding share was 97% and thus remained at a very high level (2021: 99%). Based on this, by 2025 the Company has set itself the goal of sourcing 80% of its goods – measured by sourcing volume – exclusively from finished goods suppliers (including its own production sites) that have achieved the highest level of “good” in the most recent social compliance check (verified by audit, SAQ or certificate of an external social compliance standard). In 2022, the corresponding share was 52%, based on a total of 224 social compliance checks at 213 suppliers (including own production sites). Due to the aforementioned update of the SAQ during 2022, this figure is not fully comparable with the previous year’s figure (2021: 68%).