Environmental matters

Climate protection in production

In the global textile and apparel industry, CO₂ emissions mainly occur in the cultivation and production of textile fibers and during energy-intensive processing stages, which can include 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. 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 of progress on the achievement of the Group’s environmental and climate protection targets.

Targets

HUGO BOSS aims to reduce the impacts of its business activities on the climate.

Measures

HUGO BOSS works to protect the climate with numerous measures and initiatives at its own sites and in its supply chain. 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. In order to define suitable measures, as part of this cooperation 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 reduce environmental impacts sustainably along the supply chain. Compliance with statutory environmental standards is an integral part of the supplier contracts. In addition, the Environmental Commitment published by HUGO BOSS governs many environmental protection principles, both for the Company’s own production sites and for those of its suppliers. The commitments are currently being developed further and will soon also reflect the activities and targets pursued by the Company under the Fashion Industry Charter for Climate Action. The Company is currently also reviewing its Supplier Code of Conduct, which also contains detailed rules on environmental protection. HUGO BOSS also aims to enshrine binding sustainability criteria for its suppliers in future in a Material Policy with regard to the textile fibers and materials used.

As part of regular environmental audits, HUGO BOSS takes stock of the energy management measures put in place by its suppliers and the CO₂ emissions of those suppliers. The Company also uses external auditors to do this. If any violations of environmental requirements are identified, the Company works jointly with the respective supplier to develop action plans whose implementation is verified during 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.

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. Of the materials used by HUGO BOSS, cotton is by far the most extensively used. The BCI takes a holistic approach to sustainable cotton production that takes into account ecological, social and economic considerations. It aims to reduce environmental and climate impacts, for example through more energy-efficient and environmentally friendly cotton cultivation.

Although the effects of the Company’s own production activities on the climate are low compared to those of external suppliers, the reduction of energy consumption and CO₂ emissions at the Company’s own production sites is nonetheless important to HUGO BOSS. The Group continues to develop its Environmental Management in line with the international standards ISO 14001 (Environmental Management) and ISO 50001 (Energy Management). By far the largest of the Company’s own production sites, the site in Izmir (Turkey) 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. The experience obtained through 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.

Performance indicators

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. To realize this target, the Company is currently working on defining corresponding targets for what are referred to as Scope 1 and Scope 2 emissions from its own primary energy use and electricity procurement, as well as for the Scope 3 emissions from logistics and the supply chain.

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.

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. If chemicals are released during production processes, this can have negative impacts, including on water quality and the supply of water to local communities in the areas surrounding production sites. HUGO BOSS consequently makes its suppliers aware of the need for the responsible handling of chemicals 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 cooperation with suppliers. Thus, for example, the HUGO BOSS Social Standards, which form an integral component of the contractual agreements, also include guidelines on adherence to environmental protection requirements. 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.

Targets

HUGO BOSS aims to guarantee the safety of its products. The Company also aims to further reduce the environmental impacts of wet processes by suppliers. To achieve both these targets, the Company aims at reducing the use of chemicals that are hazardous to health and the environment in its production processes.

Measures

HUGO BOSS pays attention to strict product safety requirements being complied with along its supply chain. The Company requires its suppliers to comply with a Restricted Substances List (RSL) that meets the requirements of the Apparel & Footwear International RSL Management Group (AFIRM). This 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 checked regularly by means of extensive product tests. If the tests reveal noticeable problems, a specified escalation process is triggered, which involves all relevant specialist 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. In 2019, the Company successfully completed its migration to the ZDHC program’s audit protocol, which is specially geared towards the wet processes. As part of the Global Social Compliance Program (GSCP) pursued by the Company, in future, the audit protocol shall allow for a standardized assessment for suppliers’ chemical management, in order to support suppliers that use wet processes in improving their environmental performance. To further reduce the use of environmentally harmful chemicals, the Company is also moving ahead with the implementation of a “Manufacturing RSL” (MRSL) based on ZDHC. This lists chemicals with defined thresholds, and is intended to help suppliers to avoid using harmful chemicals or to keep their use to a minimum. The Company is also pushing forward the application of the ZDHC Wastewater Guidelines, to prevent the release of water-hazardous substances in the supply chain. With the Environmental Commitment published on the Company’s website as well, HUGO BOSS aims to reduce the environmental impact in its supply chain.

Performance indicators

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 proportion of products that do not meet market requirements while also ensuring that such products are rejected. In 2019, around 3,950 materials were tested (2018: around 3,050 materials). In this process less than 0.5% of the tested products turned out not to be market-compliant and were consequently rejected (2018: less than 0.5%).

In 2019, HUGO BOSS presented the newly developed MRSL to all its suppliers, and at the same time queried their readiness to implement the MRSL. In 2019, readiness was at 91%. For the Company’s own production sites, compliance to the MRSL is mandatory. The Company’s objective is to ensure, through information and training, that all its suppliers can confirm that they are ready to implement the MRSL in the medium term.