Respect for human rights

Under “Respect for human rights”, HUGO BOSS lists what it identifies as two material topics relating to its social impact in the supply chain (including its own production): human rights and labor standards, and occupational health and safety. An overall report is provided below on the two topics since 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 sees a shared responsibility for the staff in its supply chain here.

Respect for human rights is recorded 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. Responsibility for the key topic of occupational health and safety in the Group’s own production is decentralized. The employees responsible at the various sites report at regular intervals and when the occasion calls for it to the management of the respective Group companies, which is in close contact with the Managing Board.

If any violations of human rights or labor standards are reported, both the Group’s own employees and staff members of suppliers have recourse to a defined grievance mechanism through which they can contact 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 legal and internal company regulations on human rights and labor standards, both in its own production and on the part of its suppliers, while at the same time granting occupational health and safety for all employees.

Measures

HUGO BOSS attaches key 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. The creation of a shared understanding and assistance in furthering skills to manage social issues plays an important role in this process. HUGO BOSS imposes an obligation on both itself and its suppliers to comply with the HUGO BOSS Social Standards, which represent the most important framework for compliance and improvement of social matters both in the Company’s own business and 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, humane and safe working conditions, bans on child labor, forced labor and discrimination and the payment of reasonable salaries. 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. The Social Standards are supplemented by the Company’s own Code of Conduct and the internal Social Compliance Policy.

To further develop industry standards, HUGO BOSS works in close cooperation with other businesses and organizations. For example, the Company is 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, the performance-based compensation of hours actually worked, the right to collective bargaining and the prevention of pay inequality.

As a responsible employer, HUGO BOSS also attaches great importance to the occupational health and safety of its employees. This is reflected in high occupational health and safety standards 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. The Health and Safety Commitment published on the Company’s website emphasizes how much of a priority the matter is for the Company.

In the course of audits, HUGO BOSS regularly reviews compliance with the Social Standards and the rules on occupational health and safety. 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. 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.

Performance indicators

In 2019, 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 198 external finished goods production facilities in 25 countries in 2019 (2018: 210 production facilities in 28 countries). The decrease compared to the prior year is mainly attributable to the further strengthening of strategic partnerships. During the reporting period, 119 audits were conducted in 93 existing finished goods production facilities (including the Company’s own production sites; 2018: 153 audits in 123 production facilities). Infringements that were identified in 2019 related primarily to the areas of social compliance management, working hours and remuneration.

HUGO BOSS has set itself the goal by 2022 of procuring 95% 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, 2019, this share was 93% (2018: 91%).