Under “Respect for Human Rights,” HUGO BOSS addresses two key 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 our Supply Chain Sustainability 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 ombudsperson. In addition, the HUGO BOSS ”Speak up Channel” offers both our own employees and workers along our supply chain the opportunity to report misconduct and criminal offenses confidentially and anonymously. In the event of violations, the central Compliance & Human Rights 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.
Targets
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 throughout its value chain at all times.
Measures
We attach great importance to the careful selection of our partners, cooperation based on a spirit of mutual trust, as well as 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. It forms an integral part of contractual agreements. As part of the Supplier 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. In countries where the national statutory requirements fall short, the Code sets a minimum standard. 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 in 2023, with the update to be rolled out in early 2024. 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, respecting core labor standards, including the United Nations’ Universal Declaration of Human Rights (UDHR), the UN Guiding Principles (UNGPs) on Business and Human Rights, the ILO’s Core Labor Conventions, and the ten principles of the UN Global Compact. In addition, our Anti-Discrimination and Anti-Harassment Commitment and the Anti-Discrimination and Anti-Harassment Policy reinforce our dedication to fostering an inclusive, respectful, and ethical conduct, emphasizing respect for human rights.
Since 2023, the German Act on Corporate Due Diligence Obligations in Supply Chains (Lieferkettensorgfaltspflichtengesetz, “LkSG”) requires companies to conduct human rights and environmental due diligence in their supply chains and fulfill corresponding reporting obligations in a separate report. Also for HUGO BOSS, this means meeting the respective due diligence obligations for our own business activities, the actions of our contractual partners, and the actions of other indirect suppliers. To ensure monitoring and compliance with human rights and environmental due diligence obligations in supply chains, as well as compliance with the LkSG, HUGO BOSS initiated important measures already in 2022 and continued working on them in fiscal year 2023. The Company conducted an in-depth human rights risk analysis, among other things, as part of which both our own operations and all direct suppliers were assessed accordingly, while also including a large number of indirect suppliers. For this purpose, the existing self-assessment for checking the social standards specified by HUGO BOSS for suppliers was updated and supplemented with content on the LkSG. The self-assessment 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 additional preventive and remedial measures and implement them accordingly. In this context, the risk-based focus is placed on suppliers with a high or very high human rights risk according to the self-assessment. Due to the update of the self-assessments based on the LkSG requirements, the results of the assessments can be compared with those of previous years only to a limited extent.
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 appropriate 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. Our publicly available Health & Safety Commitment emphasizes the importance of this topic for our Company. group.hugoboss.com
HUGO BOSS regularly conducts audits to verify compliance with the social standards set out in the Supplier Code of Conduct and the regulations on occupational safety. In this context, reference was made to the new risk analysis in accordance with the LkSG for the first time in 2023. Based on new requirements of the LkSG, HUGO BOSS defined new criteria for supplier selection, focusing specifically on a risk-based approach to conduct audits. HUGO BOSS has implemented a Supply Chain Sustainability (SCS) program to systematically address all types of sustainability risks stemming from suppliers. The SCS program consists of the three modules social compliance management, environmental management, and governance, all of which are in alignment with our Supplier Code of Conduct. HUGO BOSS uses the Social Compliance Management module to check the extent to which the standards set out in its Supplier Code of Conduct are being complied with. As part of this module, the Company conducts regular social audits, requests self-assessment for review from suppliers, or accepts selected certificates in accordance with social compliance standards such as those of the Fair Labour Association (FLA). Social audits are carried out especially for finished goods suppliers. When conducting audits in its supply chain, 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 conduct social compliance trainings at our finished goods suppliers and support them in implementing the social standards. This training is mandatory for every supplier entering into a contractual relationship with HUGO BOSS. 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.
Performance indicators
In 2023, and unchanged to the prior year, own production was carried out at five production sites in five European countries. In addition, HUGO BOSS had an active business relationship with 267 external finished goods production facilities in 35 countries (2022: 233 production facilities in 29 countries). The increase compared to the previous year primarily reflects the further diversification of the supplier portfolio as part of the successful execution of the “CLAIM 5” strategy. During the reporting period, 58 audits were conducted in 55 existing finished goods production facilities, including the Company’s own production facilities (2022: 97 audits at 87 finished goods production facilities) whereas the decline in comparison to the previous year is related to a simultaneous increase in the number of audits at fabrics and trimmings suppliers. The validity period of the audits on which this reporting is based extends from January 2021 to December 2023. During this period, a total of 191 audits were carried out at 175 finished goods production facilities. Non-compliances identified via audits in existing finished goods production facilities in 2023 mainly related to the areas of social compliance management and working hours. The 56 existing finished goods production facilities that did not have a valid social audit carried out a self-assessment. Two certificates issued in accordance with the FLA standard were accepted in the reporting period. Sourcing and Production
By 2025, HUGO BOSS has set itself the target of sourcing all of its goods from finished goods suppliers (including its own production sites) with one of the two highest attainable social compliance performance levels (“good” or “satisfying”), verified by an audit, self-assessment, or certificate of an external social compliance standard. In 2023, the corresponding share was 86% (2022: 97%). The performance indicator for 2023 is only partially comparable with that of the previous year, as HUGO BOSS refined the definition in 2023 to make the different components of its suppliers’ social performance more explicit and transparent. Since fiscal year 2023, HUGO BOSS also no longer conducts Remote Risk Assessments (RRA) and has thus excluded them from the calculation. Due to the higher number of self-assessments of our suppliers carried out year-on-year, their results are reflected to a larger extent than it was possible in the previous year.
The Company has also set itself the goal of sourcing 80% of its goods from finished goods suppliers (including its own production sites) with the highest attainable social compliance performance level (“good”) by 2025, verified by audit, SAQ, or certificate of an external social compliance standard. In 2023, the corresponding share was 62% (2022: 52%), also relating to the population presented above.