Under “Respect for Human Rights”, HUGO BOSS addresses two significant topics 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 the HUGO BOSS social compliance program and are therefore closely interconnected.
HUGO BOSS considers respect for human rights and compliance with applicable labor standards in its global supply chain to be integral parts of its corporate culture. A considerable part of the sourcing volume of HUGO BOSS is attributable to finished goods produced by independent suppliers in less economically developed regions. HUGO BOSS is aware of its shared responsibility for the employees along its supply chain. A commitment by the Managing Board to safeguard and respect human rights can be accessed on the Company’s website.
Respect for human rights is the responsibility of and managed by the central department Global Corporate Responsibility and Public Affairs in close consultation with the operational sourcing units. The results of the work are the subject of regular reports to the Managing Board. In addition, the issue of human rights is integrated into the Company’s risk management along with clearly defined processes and responsibilities. Responsibility for occupational health and safety in the Group’s own production is organized locally. The responsible employees at the various sites report at regular intervals and on an ad-hoc basis to the management of the respective Group companies, which is in close contact with the Managing Board.
In case of any indication of violations of human rights or labor standards, both the Group’s own employees and the employees of suppliers have recourse to a defined grievance mechanism through which they can reach out to the responsible contact person at HUGO BOSS directly, or an independent external ombudsman. In addition, a whistleblowing portal was established in 2021, which offers employees and supplier’s workers the opportunity to report misconduct and criminal offenses in the Company confidentially and anonymously. Any violations will be investigated, sanctions imposed, and action taken under the primary responsibility of the central Compliance department, which submits regular compliance reports to the Managing Board and the Audit Committee of the Supervisory Board.
HUGO BOSS endeavors to achieve compliance with statutory and internal company rules on both human rights and labor standards, both in its own production and that of its suppliers, while at the same time granting occupational safety for all employees.
HUGO BOSS attaches great importance to the careful selection of its 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 shared understanding and assistance in the further development of competencies to manage social issues plays an important role. HUGO BOSS imposes an obligation on its suppliers to comply with its Supplier Code of Conduct, which is the most important framework for compliance and improving social matters in the supply chain, and forms an integral part of contractual agreements. It is based on internationally acknowledged standards such as the Core Conventions of the International Labor Organization (ILO) and includes rules governing the observance of national legislation, working-hour restrictions, humane and safe working conditions, bans on child labor, forced labor and discrimination and the payment of reasonable wages. In countries where the national statutory requirements fall short, the Code sets a minimum standard. The Code is available in 23 languages on the Company’s website. The Group’s own employees are subject to the HUGO BOSS Code of Conduct as well as the publicly accessible HUGO BOSS Human Rights Policy. The latter was expanded in 2021 to include, among others, the topics of anti-discrimination and vulnerable groups, and is henceforth available in Turkish, Polish and Italian, in addition to English and German.
HUGO BOSS also created the position of Senior Human Rights Manager in fiscal year 2021 to further monitor and ensure compliance with human rights and environmental due diligence obligations in the supply chain. The duties of this position will also include monitoring company-wide compliance with the German Supply Chain Due Diligence Law (Lieferkettensorgfaltspflichtengesetz), which will come into force in 2023. In the past fiscal year, a cross-divisional project group carried out an initial legal assessment of the law and identified potential risks that are to be minimized accordingly until the law comes into force.
To further develop industry standards, HUGO BOSS works in close cooperation with other companies and organizations. For example, the Company is committed to 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, the performance-based compensation of hours actually worked, the right to collective bargaining and the prevention of pay inequality. 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 the 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 for employee rights and increased transparency in the global apparel industry.
As a responsible employer, HUGO BOSS also attaches great importance to the occupational safety of its employees. This is especially reflected in the high standards of occupational safety at its 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 training are an integral part of the onboarding process of industrial staff at the Company’s own production sites. The Health and Safety Commitment published on the Company’s website emphasizes the relevance of this topic.
HUGO BOSS regularly audits compliance with social standards set out in the Supplier Code of Conduct as well as occupational safety regulations. For this purpose, the Company also uses external auditors. If infringements of the social standards are identified, the Company works jointly with the respective supplier to develop action plans whose implementation is verified during follow-up audits. If no adequate improvement can be shown during the implementation of these corrective measures, as a last resort, HUGO BOSS will initiate the termination of the supplier relationship. To prevent any infringements of the social standards, HUGO BOSS attaches a high priority to the further development of the social compliance management systems of its suppliers. The Company regularly conducts social compliance training courses at its finished goods suppliers and supports them in implementing the social standards. The Company’s own employees are also to be made more aware of social compliance matters through regular training sessions. Both training measures are conducted predominantly online – also due to the ongoing restrictions in the course of the pandemic – while on-site training sessions are usually only held on an ad hoc basis.
In 2021, own production was carried out at five production sites in five European countries. In addition, HUGO BOSS was in an active business relationship with 169 external finished goods production facilities in 26 countries (2020: 185 production facilities in 26 countries). The decrease compared to the prior year mainly reflects strategic measures to continuously optimize the supplier portfolio. During the reporting period, 68 audits were conducted in 55 existing finished goods production facilities (including the Company’s own production sites) (2020: 76 audits in 71 production facilities). Infringements that were identified in 2021 related primarily to the area of social compliance management. Sourcing and Production
HUGO BOSS has set itself the goal of procuring 100% of its sourcing volume from finished goods suppliers (including its own production sites) with one of the top two performance levels (“good” or “satisfactory”) in the most recent audit by 2025. As at December 31, 2021, this proportion was 99% (2020: 96%).