Respect for human rights
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 key part of the sourcing volume of HUGO BOSS is attributable to finished goods produced by independent suppliers in less economically developed regions. In some of these regions, the political and social protection mechanisms for workers are relatively minimal. HUGO BOSS is aware of its shared responsibility for the employees in 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 Sustainability 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 system along with clearly defined processes and responsibilities. Responsibility for occupational health and safety in the Group’s own production is organized locally. The employees responsible at the various sites report at regular intervals as well as incident-related 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. 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.
Targets
HUGO BOSS endeavors to achieve compliance with statutory and internal company regulations 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.
Measures
HUGO BOSS attaches great importance to the careful selection of its partners, on cooperation based on a spirit of mutual trust and on 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. This 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 and the HUGO BOSS Human Rights Policy published in 2020.
To further develop industry standards, HUGO BOSS works in close cooperation with other businesses 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 2020, managing the impact of the COVID-19 pandemic was a key priority of the Company’s supply chain management. The Company was engaged in a continuous dialog with its suppliers about suitable measures to reduce the risk to health. In dealing with suppliers, the Company was guided by the guidelines for responsible purchasing practices developed by the Partnership for Sustainable Textiles in response to the pandemic. HUGO BOSS has also launched a Supplier Financing Program to safeguard the financial stability of its suppliers.
As a responsible employer, HUGO BOSS also attaches great importance to the occupational safety of its employees at work. This is especially reflected in the high standards of occupational safety at its own production sites. For example, 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 and 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 in 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 educated further in social compliance matters through regular training sessions. Against the backdrop of the COVID-19 pandemic, fewer in-person training sessions and courses took place in 2020 than originally planned.
Performance indicators
In 2020, the Group’s own production was once again carried out in four production sites in four European countries. In addition, HUGO BOSS was in an active commercial relationship with 185 external finished goods production facilities in 26 countries in 2020 (2019: 198 production facilities in 25 countries). During the reporting period, 76 audits were conducted in 71 existing finished goods production facilities (including the Company’s own production sites) (2019: 119 audits in 93 production facilities). The decrease compared to the prior year is mainly due to a reduction in the number of audits against the backdrop of the pandemic, and the associated lockdowns and travel restrictions. Infringements that were identified in 2020 related primarily to the areas of working hours and remuneration.
HUGO BOSS has set itself the goal by 2025 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. As at December 31, 2020, this proportion was 96% (2019: 93%).
