Climate protection in production
In the global textile and apparel industry, CO2 emissions are mainly generated in the cultivation and production of textile fibers as well as during energy-intensive processing stages, like dyeing, washing, or bleaching. HUGO BOSS is conscious of its shared responsibility to protect the environment and the climate. The introduction and development of environmentally and climate-friendly processes at its suppliers is as important to the Company as the implementation of similar measures at its own production sites.
Environmental and climate protection matters in the supply chain are managed by the central department Global Sustainability, which is responsible for setting out internal guidelines and standards. In addition, the central Environmental Management Team, in close consultation with local managers, coordinates corresponding measures at the own production sites. The Managing Board is kept regularly informed about the progress made toward the achievement of the Group’s environmental and climate protection targets.
By signing the Fashion Industry Charter for Climate Action in 2018 under the aegis of the United Nations Framework Convention on Climate Change (UNFCCC), HUGO BOSS, together with other businesses, subscribed to the vision of a climate-neutral fashion industry by 2050.
HUGO BOSS works to protect the climate worldwide with numerous measures and initiatives both at its own sites and in its supply chain. In order to define suitable measures, as part of the Fashion Industry Charter for Climate Action, the Company engages with, amongst others, task forces dealing with issues such as “raw materials” and “energy efficiency and renewable energies in the manufacturing process”.
In line with the UNFCCC, the Company works together with its suppliers to sustainably reduce environmental impacts along the supply chain. Compliance with statutory environmental standards is an integral part of the supplier contracts. In addition, the Environmental Policy published by HUGO BOSS on its website describes a variety of environmental protection principles, both for the Company’s own production sites and for those of its suppliers. It reflects the activities and objectives pursued by the Company within the framework of the Fashion Industry Charter for Climate Action. HUGO BOSS also revised its Supplier Code of Conduct in 2020. It now includes even more comprehensive guidelines for complying with environmental requirements. In addition, HUGO BOSS sets binding sustainability criteria for the use and processing of textile fibers and materials for its suppliers in the form of a publicly accessible Responsible Product Policy.
As part of regular environmental audits, HUGO BOSS tracks the energy management measures put in place by its suppliers and the CO2 emissions of those suppliers. For this purpose, the Company uses external auditors. If any violations of environmental requirements are identified, the Company works jointly with the respective supplier to develop action plans whose implementation is verified in follow-up audits. The Company also carries out relevant training sessions to inform its suppliers regularly about environmental and climate protection measures and to work toward the establishment of standardized energy and environmental management systems. In 2020, due to international travel restrictions related to the COVID-19 pandemic and in order to ensure the protection of all parties involved, audits and training could only be carried out to a limited extent.
As a member of the Better Cotton Initiative (BCI), HUGO BOSS works together with other businesses to reduce the environmental impacts associated with the cultivation and processing of cotton. This is a matter of great importance to the Company, as cotton is by far the most extensively used material at HUGO BOSS. The BCI takes a holistic approach to sustainable cotton production that takes into account ecological, social and economic considerations.
The impact of the Company’s own production activities on the climate is relatively low compared to those of external suppliers, as the upstream value-adding stages in particular involve processes with high CO2 emissions. Nevertheless, the reduction of energy consumption and CO2 emissions at the own production sites of HUGO BOSS plays an important role. The Group continues to develop its Environmental Management in line with the international standards ISO 14001 (Environmental Management) and ISO 50001 (Energy Management). The site in Izmir (Turkey) – by far the largest of the Company’s own production sites – has been certified under both these standards since 2014. To further reduce CO2 emissions in its own production sites, the Company is investing primarily in energy-efficient technologies, modernizing technical facilities and increasing the share of renewable energies. In terms of the latter, due to the switch to green electricity at the Radom (Poland) site in 2020, HUGO BOSS now draws its energy from renewable sources at all of its own sites. The experience obtained through its own environmental management will help the Company work together with external suppliers to make further progress in reducing environmental and climate impacts in the supply chain in future.
As part of its work under the Fashion Industry Charter for Climate Action, HUGO BOSS has committed, together with other businesses, to deliver a 30% reduction in CO2 emissions by 2030 as a first step. In order to make this target more specific, HUGO BOSS has set itself the goal of reducing its scope 1 and scope 2 emissions from primary energy use and electricity supply by at least 51% by 2030 compared to 2018. A 30% reduction is planned over the same period for scope 3 emissions from logistics and the supply chain. The Company received confirmation in 2020 that these targets meet the strict requirements of the Science Based Targets initiative. The Company expects that in 2020, scope 1 and scope 2 emissions as well as scope 3 emissions from logistics will have again been reduced, partly due to the negative impact of the COVID-19 pandemic on the business of HUGO BOSS (2019: reduction of 18%). The progress achieved in 2020 will be published in the 2020 Sustainability Report.
Responsible use of chemicals in production
HUGO BOSS is aware of its responsibility for the health and safety of the people who come into contact with its products, both as customers and during the manufacturing process. The responsible use of chemicals in production is an essential basis for safe products and production processes that are harmless to both health and the environment. Clear responsibilities, coordinated processes and comprehensive guidelines are targeted towards compliance with high safety and quality standards in the production processes. The Environmental Policy published on the Company’s website emphasizes the ambitions of HUGO BOSS in this area.
In the fabric and trimmings production processes of independent suppliers, chemicals are particularly used in so-called wet processes, which include for example dyeing, washing, bleaching and tanning. The same applies to the production of cotton, synthetic and recycled fibers. The release of chemicals during production processes can have negative impacts on water quality and the supply of water to local communities in the areas surrounding production sites, among others things. HUGO BOSS therefore requires its suppliers to handle chemicals responsibly and is working to reduce their use.
Environmental matters for the supply chain are managed by the central department Global Sustainability. Its guidelines for compliance with relevant environmental standards are implemented by the operational sourcing units, in close cooperation with suppliers. For example, the HUGO BOSS Supplier Code of Conduct includes comprehensive guidelines for compliance with environmental protection regulations. Adherence on the part of the suppliers is continuously reviewed by HUGO BOSS and independent third parties. The Managing Board and relevant employees are regularly informed about the outcome of the work.
HUGO BOSS aims to guarantee the safety of its products at all times. Also, the Company is committed to further reduce the environmental impact of wet processes on the supplier side. To achieve both targets, the Company aims at reducing the use of chemicals that are hazardous to health and the environment in the production processes.
HUGO BOSS pays close attention to strict product safety requirements being complied with along its supply chain. The Company expects its suppliers to comply with a Restricted Substances List (RSL) that meets the requirements of the Apparel & Footwear International RSL Management Group (AFIRM). The RSL governs compliance with laws on the use of chemicals and other substances that are potentially hazardous to health. The safety and environmental compatibility of the materials used by HUGO BOSS and its suppliers is monitored regularly by means of extensive product tests. If the tests reveal noticeable problems, a pre-specified escalation process is triggered, which involves all relevant departments and, in serious cases, also includes the Managing Board.
In order to reduce environmental impacts in the production process, HUGO BOSS is working closely with its suppliers as well as with other businesses in the apparel industry, for example as part of the Zero Discharge of Hazardous Chemicals (ZDHC) program. The ZDHC program’s audit protocol used by the Company enables HUGO BOSS to carry out a standardized assessment of the chemical management of its suppliers. At the same time, it is intended to help suppliers that use wet processes to improve their environmental performance. In order to further reduce the use of environmentally harmful chemicals, the Company included a ZDHC-based Manufacturing RSL (MRSL) as an integral component of its supplier contracts in 2020. The MRSL lists chemicals with defined thresholds and is intended to help suppliers to avoid using harmful chemicals or to limit their use to a minimum. In 2020, HUGO BOSS also required strategically important suppliers to submit wastewater tests in accordance with the ZDHC’s Wastewater Guidelines for the first time. The findings will be used to work together to further reduce the release of chemicals in the supply chain.
HUGO BOSS has the safety and quality of its products tested by accredited institutes using comprehensive tests for harmful substances. The aim is to minimize the share of products that do not meet market requirements while also ensuring that such products are rejected. In 2020, around 2,650 materials were tested (2019: around 3,950). In this context, substantially less than 0.5% of the tested products turned out not to be market-compliant and were consequently rejected (2019: less than 0.5%).
The Company also aims to ensure that by 2030, all of its suppliers that use wet processes are compliant with the specifications of the ZDHC-based MRSL, measured on the basis of the suppliers reports on wastewater values and chemicals inventory. All strategically important finished goods suppliers that use wet processes are to achieve this goal as early as 2025. Based on wastewater tests that HUGO BOSS conducted in 2020, already 20% of those suppliers proved compliance in regard to the Wastewater Guidelines of ZDHC. At the same time, given a still persisting lack of transparency, conformity of the respective chemicals inventories could not be conclusively assessed. Within the ZDHC program, and in close collaboration with its suppliers, HUGO BOSS will continue to work on further increasing transparency with regard to the wastewater values and chemicals inventory of its suppliers.