Respect for human rights
Under “Respect for human rights”, HUGO BOSS lists what it identifies as three material topics relating to the social impacts in the supply chain (finished goods): Human rights and labor standards, occupational health and safety and fair compensation. An overall report is provided below on the three topics since they are all part of the HUGO BOSS social compliance program and are therefore closely interconnected.
Observance of social standards along the global supply chain is of crucial importance for HUGO BOSS. The Company attaches key importance to the careful selection of its partners, on cooperations based on a spirit of mutual trust and on the establishment and maintenance of long-term strategic relationships. The creation of a shared understanding and assistance in furthering skills to manage social issues plays an important role in this process.
A key part of the sourcing volume of HUGO BOSS is attributable to finished goods, which are finished by suppliers in less economically developed regions. In some of these regions the political and social protection mechanisms for workers are relatively minimal. HUGO BOSS therefore bears shared responsibility for the staff in its supply chain.
Respect for human rights in the supply chain is recorded and managed by the central Global Sustainability division in close consultation with the operational sourcing units. The results of the work are the subject of regular reports to the Managing Board.
The target of HUGO BOSS is compliance with statutory and internal company rules on human rights and labor standards on the part of its suppliers. In doing so, all staff of suppliers shall be granted safety at work, health protection and adequate compensation.
HUGO BOSS imposes an obligation on both itself and its suppliers to comply with the HUGO BOSS Social Standards, which represent the Company’s most important framework for compliance and improvement of social issues in the supply chain and are an integral part of the contractual agreements. They are based on internationally acknowledged standards such as the Core Conventions of the International Labor Organization (ILO) and include rules governing the observance of national legislation, working-hour restrictions, human and safe working conditions, bans on child labor, forced labor and discrimination, the payment of reasonable salaries, freedom of association and environmental protection. In countries where the national statutory requirements are only insufficiently developed, HUGO BOSS Social Standards set a minimum standard. They are available in 25 languages on the Company’s website. group.hugoboss.com
Compliance with the HUGO BOSS Social Standards is reviewed in regular audits. The Company also uses external auditors to do this. 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 in the case of infringements no adequate improvement can be shown during implementation of the measures, HUGO BOSS shall after several reviews initiate the termination of the supplier relationship as a last resort.
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. Since 2017, for example, the Company has been conducting social compliance training courses at its finished goods suppliers and has been supporting them by providing extensive documentation in implementation of the Social Standards. In the event of incidents, employees of the supplier have the option of using a defined grievance mechanism to directly contact the responsible contacts at HUGO BOSS or an independent external ombudsman.
HUGO BOSS is involved in designing industry-wide standards and is working on compensation practices for its suppliers’ employees. To this end the Company regularly collects and analyzes wage data from its finished goods suppliers. The work is based on internationally accepted standards such as those of the German Partnership for Sustainable Textiles and the Fair Labor Association (FLA). The Company has been an accredited member of the FLA since 2018. 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 2018, HUGO BOSS was in an active commercial relationship with 210 external finished goods production facilities in 28 countries (2017: 202 production facilities in 28 countries). During the reporting period, 153 audits were conducted in 123 existing finished goods production facilities (including the Company’s own production sites) (2017: 151 audits in 127 existing production facilities). Infringements that were identified related primarily to the areas of social compliance management, occupational safety and working time.
For 97% of the production facilities with which there was a working relationship in 2018 in the finished goods area (including the Company’s own production sites), there is a valid audit (2017: 84%), meaning that a (follow-up) audit was performed at those suppliers according to a results-based audit frequency of within 24 months. In 2016, HUGO BOSS set itself the goal of purchasing 90% of its sourcing volume by 2020 from finished goods suppliers (including its own production sites) that had good to satisfactory performance levels in their last audit in each case. As at December 31, 2018, this proportion was 91% (2017: 84%). The goal was thus achieved early. HUGO BOSS also aims to maintain the high level of this indicator in the future.