The Managing Board of HUGO BOSS officially commits to fair compensation in the supply chain. At HUGO BOSS, we understand that fair compensation among our global partners is not only the basis for long-term trust and partnership, but is also a prequisite for employees to live independent lives. For us, this also includes the payment of living wages by suppliers to their employees. For HUGO BOSS, this has been and will continue to be an essential aspect of a sustainable supply chain. That is why we are participating in the design of industry-wide standards and working together with other stakeholders on an individual compensation strategy for our suppliers' employees.
We are convinced that all employees, both at our own production sites and at those of our suppliers, have the right to receive regular and fair compensation for their work. At a minimum, the nationally applicable statutory minimum wage must be respected. In addition, all employees have the right to receive information on individual salaries, for example through detailed salary statements. Furthermore, HUGO BOSS recognizes the right to freedom of association, collective bargaining, and equal pay, and is committed to ensuring that these rights are granted to employees within its sphere of influence.
The work performance of a standard working week, as defined by respective national legislation and the Core Conventions of the International Labour Organization (ILO), shall be sufficiently remunerated by the supplier. The aim is to enable local employees and their families to have a decent standard of living. For HUGO BOSS, this means that the monetary means available must be sufficient to ensure the basic needs of food, water, housing, education, health care, transport and clothing for all members of the household. In addition, employees should have disposable income to build up reserves for unexpected events.
We are aware that the statutory minimum wage that has been set in countries we source from may not be sufficient to provide workers with the above-mentioned decent standard of living. Since we recognize fair compensation as a human right – and have also embedded this in our Supplier Code of Conduct – we work with initiatives such as the Fair Labor Association (FLA) to further promote this right. As part of this membership, as well as in the German Partnership for Sustainable Textiles, we are therefore also committed, among other things, to promoting political and economic framework conditions that enable a systematic improvement in the wage situation for workers in specific countries.
In addition, we continuously address our suppliers' specific compensation practices. To this end, we collect wage data from our finished goods suppliers in particular and analyze any wage gaps, among other things. For this purpose, we apply the FLA Compensation Dashboard. The dashboard is used to compare the average wage of suppliers with recognized benchmarks for living wages, in which we refer in particular to the wages specified by the Global Living Wage Coalition. If these are not available for certain countries, we refer to other reference values recognized by the FLA and the German Partnership for Sustainable Textiles. Based on the identified wage gaps, targeted projects can be implemented to gradually improve the wage situation. This is done in collaboration with a wide range of stakeholders, such as national and international NGOs, civil society organizations, trade unions or local legislators.
In 2021, we are developing a concrete strategy to strengthen the promotion of fair compensation in the textile supply chain. As a first step, HUGO BOSS has collected wage data from its strategic finished goods suppliers in Asia. These cover 72% of the volume of finished goods produced by external strategic partners. We prioritized the analysis of high-volume partners and countries where there is a high risk that living wages are not paid to employees. Subsequently, we have also started to collect wage data from suppliers in the other regions, mainly in Europe. Here, the initial focus is also on our strategic finished goods suppliers. In parallel, we are starting to analyze any wage gaps. The results of the analysis will then lead to specific pilot projects in dialog and cooperation with the relevant stakeholders along the supply chain. Our newly established task force, which will drive the issue of fair compensation in the supply chain internally and anchor it in the company, plays an important role in our various measures.
We are also aware that responsible purchasing practices enable suppliers to plan their production and working hours more effectively and pay workers fairly. For this reason, we have conducted a survey on this topic both internally and with our suppliers, and have defined action plans for implementing internal training and developing metrics for responsible purchasing, among other things.
To optimize our own practices and procedures, we are also working closely with the Partnership for Sustainable Textiles. In the future, we will continue to report regularly on the results of the analyses on wage differentials, on planned measures, and on progress already made by HUGO BOSS in the area of living wages.